As an investment management company, CWS’ investors naturally look to us to deliver compelling returns relative to the risk we are taking. Since the capital entrusted to us is deployed into businesses that we purchase (apartment communities) or create (the development of apartment communities), this requires us to make a large number of personnel decisions as we are responsible for managing those businesses.
Managing The Money
In addition, we have to make sure we have a strong, capable, and deep organization at the management company level to:
- Find the investments
- Capitalize them
- Conduct due diligence
- Acquire them
- Integrate them
- Account for them
- Report on them
- Manage them
- Train the people
- Ensure the safety of our people and adequate insurance through risk management
- Provide the Human Resources and Information Technology infrastructure
- Access the financing
- Manage the disposition of them
More goes into converting an idea to a well-executed investment, but the list above highlights some of our most important responsibilities. Since we do not deploy capital into tradeable securities, we have to be adept at talent acquisition and retention in our own business, and the ones we buy, in order to add value for our investors. We may have great insights about where we should buy properties and how they should be financed, but without the people to execute on these insights, then they may end up as good ideas that were not brought to fruition in a profitable manner. Thus, not only do we have to be adept at managing investments, we must be just as strong in the realm of human capital management.
One of the most important roles of a manager is to match the right people in the right jobs and then give them the guidance and direction to help them do their best while contributing to the overall goals of the organization. It is not always easy to get people to stretch, to go outside of their comfort zones, and hold them accountable, but this is a necessary part of leading people if one wants to achieve results. As legendary Dallas Cowboys coach Tom Landry said,
As legendary Dallas Cowboys coach Tom Landry said,
[tweetthis]Leadership is getting someone to do what they do not want to do, to achieve what they want to achieve.[/tweetthis]
One of the best pieces of advice I received from someone when making a hiring decision is to first determine what kind of outlook is required for each job. Is it a daily one, 30 days, 90 days, one year, multiple years? And then match the person with a similar outlook (and of course skills and cultural fit) to that job. One way of determining someone’s outlook is by the questions they ask. Daily outlooks are conveyed through questions about the specific tasks of the job, deadlines, responsibilities, etc. Longer-term thinkers, however, are more interested in the strategy, direction, and thought processes of the leaders. As a result, one does not want to put a visionary in the role of an accountant. One requires a daily focus and attention to detail and a visionary is looking out many years ahead to help steer the ship to avoid icebergs and to take advantage of opportunities.
What are some of the attributes I look for in people we hire and promote at CWS? Here are some of the most important ones that I came up with in no particular order.
Managing The People
Please note that some of these attributes are less important in certain roles and responsibilities and more valuable in other ones. This gets back to matching the right person in the right job.
- Team oriented
- They work well with others
- Collaborative bias. They seek out the opinion of others and to have others check their work
- Possess the capacity to build and manage teams if they are candidates to take on leadership roles
- Require very little external validation. They have healthy egos that do not seek or constantly need the approval or attention of others. They are internally driven in terms of measuring their effectiveness and performance.
- Effective communicators, both orally and written
- Take pride in their personal appearance
- Attention to detail or surround themselves with people who do have this if this is not their strong suit
- Curious and active mind. They read a lot and they want to be constantly learning.
- They care and are willing to be held accountable
- They meet deadlines and commitments
- They present the whole story, good and bad
- If they are involved in investments they focus on the downside first
- Recognize that outcomes are a byproduct of effective processes
- Love to dig into the nuances of cause and effect
- Systems thinkers that eagerly want to carry out error analysis to see what triggered the breakdowns
- They can hold a conversation and maintain eye contact
- They share our values and live them
- Internally competitive that leads to
- Mastery-oriented mindset seeking deep domain knowledge
- Continuous self-improvement and learning
- Receptive to constructive feedback
- Long-term oriented
- Requires flexibility
- Accept and be ok with uncertainty
- Money is a byproduct of adding value and from seeds that were planted in previous years
- They put our customers first ahead of their individual desires and needs. This is particularly true for investment professionals.
- They have a sense of humor
- Work smart but not afraid of hard work when it is necessary
- Take challenges head on
- Fearlessness – This does not mean they don’t feel fear, it’s just they don’t let fear get in the way of doing what needs to be done
- They speak their mind respectfully and from a place of commitment
- They find ways to make themselves indispensable
- They adhere to the Stockdale Paradox – They are realistic and optimistic at the same time
- Solutions oriented
- Creative when the job calls for it
- Ability to prioritize their time
- They can say “no”
- Seek to make a differences with outside causes
So there you have it; the secret to CWS’ success! Maybe I revealed too much. On the other hand, it’s easy to list a set of attributes and it’s another thing to find people who possess many of them, or the potential to, attract them to the firm, integrate them into the organization, manage and lead them, and grow them into A players. While by no means perfect, I do believe CWS has done a very good job of doing this at the management company level and on site as evidenced by our nearly 50 years in business and successfully navigating through many powerful business cycles during this time while still providing compelling returns.
Over to You
Now you know the secret to our success – compelling people providing compelling returns. Do you think that I may have shared too much?