The Dynamic Allocation Strategies team has always had deep conviction that a daily dialogue is critical to our success. Importantly, the manner in which this dialogue is structured is critical in ensuring its efficacy.
Daily Dialogue
Typically, the daily conversation is multi-dimensional, covering both a research topic set in advance (an update on Brazil, for example) as well as a discussion about recent and anticipated developments across the investment landscape.
Structured Process
This dialogue takes place via a team meeting held every day. It starts at 8:00 a.m. Chicago time and runs from anywhere from 60 to 120 minutes. All team members, wherever they are in the world, participate.
Avoiding Nonverbal Cues
Fundamentally, we believe the manner in which this dialogue takes place is paramount to its success. The structure of this dialogue is a daily call, meaning no matter where each team member is located on any particular day—be it in the same building or across the world—everyone dials in individually. We believe this is crucial because it eliminates the possibility that nonverbal cues unduly affect the conversation.
The alternative to this structure would be an in-person meeting and for those not on location, calling in. While we do find some merit in discussing a topic face-to-face, we also believe there are some material drawbacks. For one, any team has some degree of hierarchy and that can affect how much an individual will dominate the face-to-face conversation. And they can do that not just with his or her words, but even more so with his or her presence.
For example, if Brian Singer, the head of our team, were listening to another team member present some research and he happened to briefly yawn, that might signal to the analyst that Brian was bored with the analysis even though his action was unintended. The repercussions of this innocuous cue would likely involve the analyst (and potentially other team members) shrinking back and refraining from offering additional insights. While this may seem like an innocuous gesture, if this type of action and reaction were to occur on a daily basis it could potentially snowball into a systematic problem within the team.
As a new team member, this meeting format and structure can take some time to get used to. Indeed, some adjustments must initially be made, but we believe that the format allows for the best ideas to rise to the top, regardless of their point or location of origin.
Free-Flowing Ideas
We also believe that the nature of the discussion is as important as is how the dialogue is externally structured. This is important because while strategy is ultimately set by our portfolio managers, the entire team is involved in the formation of the strategy.
The dialogue is structured by having preset topics. We may revisit an established game theater as part of our geopolitical analysis or discuss general market developments. While the discussion is structured we ensure that it is kept free-flowing enough to provide the flexibility needed to flesh out the best ideas.
To arrive at and embrace the best ideas, we intentionally have built and maintain a cognitively diverse team. We believe that because we run global portfolios, we should be a global team—not just in regard to where we are located, but in regard to where we were born, where we were educated, the languages we speak, and the cultures to which we have been exposed.
Having cognitive diversity and input from the team allows for the best ideas and the best analytical capabilities to ultimately rise to the top.
John Simmons, CFA
Senior Investment Strategist, Dynamic Allocation Strategies Team
William Blair
