December 13, 2015

The culture of sustainable investment performance

By Roger Urwin

Peter Drucker famously said: “Culture eats strategy for breakfast.” In the investment world, while investment strategy delivers performance it is the people and the culture that shape the investment strategy. It follows that culture is integral to the quality of investment performance and sustainability of investment organisations. Yet this little-understood ‘secret sauce’ of investment organisations is all too often under emphasised to the detriment of the organisation itself and those who trust it to manage their money. The following analysis, derived from extensive discussions with investment leaders in the recent past and over time, suggests a much greater focus is needed on this critical element of successful investment management.

What is Structure?

Culture is the collective influence from shared values and beliefs on the way an organisation thinks and behaves. In a strong culture, it aligns the values and beliefs of the individuals within the organisation and establishes a common set of expectations and trust.

Without doubt, the most important element of good culture is strong leadership. Culture is a reflection of leadership past and present. For culture to be influential, leadership must both be active in living its values and putting them into action.

Culture has uniqueness to it. Investment processes and strategies can look alike but culture is always distinctive. But this carries a big challenge to develop a culture that is effective in drawing focused and cohesive effort from talented individuals.

The reality is that many parts of culture result from the particular history of organisations, and are very often unplanned. Such results may not be optimal to sustainable investment organisations or their performance.

Download the full whitepaper (pdf , 65.37 KB)


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