Why are leaders, rather than bosses, central to investment success?
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Chris Stead, head of Melville Douglas International Portfolio Management, replies:
WHILE it is simple enough to measure the success of any investment decision by looking at gains made or lost, the process to produce that result is seldom simple.
Picking winners and avoiding losers might be a complex, technical process that relies on thorough analysis of a company’s financials and prospects, but there’s an even more important aspect that cannot be ignored.
At Melville Douglas, we rely on in-depth, in-house research to guide all our investment decisions. However, one of the most important indicators of a good investment is the quality of the management team and leadership. Only when we thoroughly understand the leadership culture and drivers of the investment opportunity do we decide whether to invest in it.
Poor leadership contributes to under-performance for several reasons. Chief among these is a lack of vision, common goals and intelligent direction to the organisation’s strategic intent. This can lead to mediocrity that is reflected in middle managers emulating their senior leaders’ style of managing people and business decisions. Ultimately, this contributes to low morale, lower productivity and high staff turnover, which mean the company is unable to meet goals, profits or customer demands.
Effective leadership, on the other hand, is able to influence, inspire and mentor people across the organisation by empowering them rather than simply delegating tasks. Good leaders are able to set clear strategies and cultures, are approachable and facilitate open and regular communication.
Most importantly, they are able to harness the talents of others to achieve a common goal. In essence, when assessing the management of a company we look for leaders rather than bosses.
These qualities reflect Melville Douglas’ own structure and approach to partnering with clients.
Preserving and growing your wealth is not just our job. It’s personal. Our promise to clients is exceptional service, delivered by highly skilled, highly-experienced investment experts. Our award-winning track record is testament to this approach and to our intense belief in the power of exceptional leadership.
Melville Douglas is a subsidiary of Standard Bank Group Ltd. Melville Douglas Investment Management (Pty) Ltd. (Reg. No. 1962/000738/06) is an authorised Financial Services Provider (FSP number 595). Melville Douglas is a registered business name of Standard Bank Jersey Ltd, which is regulated by the Jersey Financial Services Commission. Registered in Jersey No 12999. Standard Bank Jersey Ltd is a wholly owned subsidiary of Standard Bank Offshore Group Ltd, a company incorporated in Jersey. Standard Bank Offshore Group Ltd is a wholly owned subsidiary of Standard Bank Group Ltd which has its registered office at 9th Floor, Standard Bank Centre, 5 Simmonds Street, Johannesburg 2001, Republic of South Africa.
