The Words We Long to Hear: Well Done!
I have a confession to make: I am a people pleaser. Despite my analytical bent and time spent with other data-driven CFA charterholders, even a small compliment can do wonders to fuel my enthusiasm to accomplish a goal.
It turns out that in this competitive industry, I am not alone, at least according to the response to our latest CFA Institute Financial NewsBrief poll.
We asked readers whose recognition they valued the most when they accomplish something in their jobs.
Of the 679 respondents, 82% value recognition from others, while only 18% say internal satisfaction is what matters most. This is interesting since we tend to perceive contrarian thinking and going against the crowd as what creates the greatest investment gains, but that can be even more difficult when we seek the approval of others or if these investments take a while to create value. Similarly, in the book Originals: How Non-Conformists Move the World, Adam Grant reveals that even most entrepreneurs are people pleasers, contrary to what we might expect from innovators who chart their own paths.
Whose recognition is most meaningful to you when you accomplish something in your job?
So whose recognition seems to matter most? Our respondents said that praise from clients is most satisfying (37%), followed closely by praise from senior-level colleagues (32%). These findings align well with recent research the Future of Finance team conducted with the State Street Center for Applied Research on the motivations of investment professionals.
We surveyed 3,300 people on whether they see their work as a job, a career, or a calling. The 32% in our poll who most value approval from upper management are likely to be career-oriented, that is, motivated to move up in their organizations or receive other rewards, whether in compensation or authority.
In contrast, the 37% of poll takers who value client feedback most are likely to consider their work a calling: They are encouraged by seeing how their efforts translate into positive financial outcomes for clients, helping these investors retire comfortably or achieve other financial goals.
Our research, “Discovering Phi: The Hidden Variable of Performance,” showed that this sense of purpose is an important ingredient to producing better long-term results. A client-focused motivation, to which we assign the Greek letter “phi,” is associated with better long-term organizational performance, client satisfaction, and employee engagement.
It turns out that passion for the markets is necessary but not sufficient to achieve the most success in this industry.
It is also reasonable to adopt the philosophy, “If the client succeeds, you succeed.” This seems straightforward, and yet conflicts of interest arise that can misalign incentives. In fact, in the Phi research, we found that 36% of investment professionals said that acting in the best interest of clients means taking on career risk. One example of this is taking too little investment risk versus a client’s risk profile.
Our CFA Institute Financial NewsBrief poll showed only a small cohort (9%) most valued compliments from their peers with similar positions, even though these colleagues could likely best appreciate the efforts that translated into success.
Lastly, it seems that less-personal praise from the media doesn’t matter as much (only 1%), nor do we tend to value positive feedback from friends and family (3%).
For those leaders looking to improve their investment practice, it is worth thinking more about what motivates your team to succeed. When we consider incentives, we typically think of compensation structures, but our research indicates that money is not actually the main driver in the finance industry. While it is an easy way to keep score, and compensation is important, the Phi research found that only 20% of investment professionals say remuneration is what keeps them in the industry.
Hearing from a happy client or getting a compliment from firm leaders may go further than we think.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
4 thoughts on “The Words We Long to Hear: Well Done!”
It’s almost like Dale Carnegie was on to something.
Nice post Bill. It turns out investment pros are human after all, despite what you may have seen out of Hollywood!