Monthly Archives: October 2015

Building Extraordinary Teams with Liz Uram, the Coach & Mentor Group

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-Chris Kelley, CFA

On Thursday, October 22nd Liz Uram presented on building an extraordinary team. Focusing on a topic different than the usual brought an eclectic group of leaders to the presentation, all of whom were interested in the soft skills of people management and leadership. Liz’s expertise in the industry as both a practitioner running teams at Wells Fargo and other financial institutions as well as her strong academic background resulted in a vibrant presentation that was very interactive with all the participants. Liz’s expertise in the industry as both a practitioner running teams at Wells Fargo and other financial institutions as well as her strong academic background resulted in a vibrant presentation that was very interactive with all the participants.  She touched on a variety different topics and industry research that showed a consistent level of employment dissatisfaction, even though billions of dollars has been spent trying to engage employees.

Liz touched on three basic take-aways that can eliminate the majority of the indecision and friction in most offices: 1) a 3 step process in setting goals that eliminates the noise of corporate bureaucracy. 2) Components for keeping performance feedback stress free and rewarding. 3) Surefire way to gain employee buy-in on strategic goals and direction of any firm large or small. Though not explicit in her presentation, my key take away is a classic 80/20 example. Taking a little more time and thought (20% more) can alleviate and eliminate 80% of your office and team issues and produce a more streamlined and well-run team. The presentation was informative and educational to all participants and I gained a great amount of value from it.

 

– Ildiko Hildreth, CFA

Liz shared the results of a 2014 Gallop Poll which found that 51% of workers are disengaged, 18% are actively disengaged, and only 18% are engaged. And, that this statistic has not changed much in recent decades. Wow! If that is not a reason to think that there is room for improvement in our work environments, I don’t know what is. After all, the more effectively we communicate, the better our teams function, and the better our performance.

So how does one foster more employee engagement? Liz discussed the importance of communicating goals and strategies to the team. Also, how listening is a key to employee buy-in. She laid out how a simple goal setting process based on a few key performance measures and behavioral standards can be tailored for each individual. And that when you let people know what is expected on the front-end, giving and receiving performance feedback can be less stressful.

I found the meeting to be thought provoking. In our profession, we all work and communicate with clients, portfolio managers, analysts, “the street”, and support staff. And, most, if not all, of these are teams in some shape or form. The trick is how to improve investment outcomes by building an extraordinary team.

If you are interested in a handbook that describes what Liz discussed and more, she invites you to request a copy by e-mailing her at liz@coachandmentor.net with the subject line ‘CFA handbook’. Additionally, Liz expects to release a book soon called Connected: Bridging the Gap Between Strategy and Execution.

A Letter from Your Society President

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Joshua M. Howard, CFA

I recently returned from the CFA Institute’s Society Leadership Conference, held this year in Hong Kong. This conference is for the Presidents and other Society leaders from all 147 global Societies to come together on an annual basis for conversation and idea generation. Along with a few dozen Institute staff we discussed Institute initiatives, shared ideas, learned about board governance best practices and networked with the global body of charterholders. Two to three representatives of each Society attended the conference; when combined with the Institute staff that were present over 500 people attended this year’s conference.

I wanted to pass along a couple takeaways to you. The first is that the new CFA Institute CEO, Paul Smith, is committed to working in partnership with local Societies across the globe.  He has already increased the flow to Societies of needed financial resources, educational materials, social media toolkits, speaker networks and IT infrastructure, and has demonstrated a strong desire to listen to our needs and concerns. He has made additional funding available to Societies that want to tackle new, innovative projects that the local Society cannot afford on their own, but that further the mission of the CFA Institute and can be replicated across the globe. If anyone in the CFA Society of Minnesota has an idea for a truly original program that could benefit our members and be replicated by other Societies, please share your thoughts with me.

The second takeaway was a reminder that we are a global professional organization, one of the few (possibly only) credentials that is the same around the world. All charterholders have passed the same rigorous exams, in the same language, and all adhere to the same code of conduct, whether we live in Minnesota, Montreal, Shanghai or South Africa. I had lunch one day with Society leaders from Kuwait, Bahrain, Austria and Pittsburgh, followed by a meeting with leaders from Beijing, Japan, Calgary, Korea and Spokane. I discussed annual economic dinner speakers with the President of the CFA Society of Nigeria and had a conversation about board recruiting with a Society leader from Vietnam.

While we all face different challenges in our local markets, the CFA Institute and local CFA Societies are all pursuing the same three goals – maintaining a strong body of knowledge and rigorous credentialing program, delivering member value, and working with employers and regulators to promote ethical behavior and market integrity.

In summary, it is good to remember that “CFA” does not just mean that you passed a series of difficult exams – it also means you are part of a global organization promoting ethics and professional standards around the world.

Josh Howard, CFA
President, CFA Society of Minnesota

P.S. Speaking of passing difficult exams – please join us in welcoming our newest charterholders at the New Charterholder Dinner on November 12th. More information can be found here.

Watch Me Whip

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Susanna Gibbons, CFA

As I was doing The Whip last night in my living room, my son covered his eyes with his hand and walked out with a disgusted “that’s just wrong.” I yelled after him “I don’t need your permission to do The Whip…hey, are you listening to me…? Anybody can do The Whip if they want to. Anybody!”

So much has been written over the past couple of years about the lack of diversity in the investment business. We’ve tried the mentoring programs, we’ve highlighted the performance benefits, we’ve taken the negotiation courses, but for all of the hand-wringing, it feels like we have gotten nowhere. According to the CFA society, we have in fact gotten nowhere. Focusing just on women, there are currently a lower percentage of women applying to take the CFA exam than there were 20 years ago. Most of the people I know in the business say they can’t find the diverse applicants they want to hire. And women in particular seem to be avoiding the business because of the lack of visible, viable career paths – there’s no one who “looks like us,” so how can we possibly imagine an investment career?

Last night, as my progeny turned his back on my dancing, I had a moment of clarity around this problem. We are all, always, seeking to affiliate. We have fairly rigid ideas about who can do what. In the investment business, we have collectively allowed this urge to overwhelm our rational judgment. We have become increasingly balkanized in our own affiliation groups, somehow unable to step beyond these boundaries to make the choices we know will result in better businesses and better careers.

For those in charge of the hiring, that means you have to stop thinking about diversity as simply a willingness to accept those who show up. You actually have to go out and build the pipeline, develop the networks, and find a way to reach the people who currently are not reaching you. Stop thinking about this as an altruistic burden; it will be a profitable investment in your business.

And for those among us trying to break in or move up – they ain’t going to give it to us, you gotta take it. Stop waiting for permission, stop expecting to find affiliation. Move outside your comfort zone and pursue the investment business because it is exciting, intellectually challenging, ever changing and rewarding. Even if you don’t end up where you initially intend, the journey will be amazing.

Take that, my little teenager. Watch me whip.

2015 Financial Compensation Survey Results

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CompSurvey2015_LargeWe’re excited to release the results of our 2015 Financial Compensation Survey, the 3nd Annual in-depth look at compensation levels in Minnesota and the Dakotas, conducted by CFA Society Minnesota.

Click the image at right to download, at no charge, this white paper summarizing high-level survey findings in an easy-to-read format. In return for the white paper or for deeper data requests, please complete the contact form below. Your feedback is welcome and appreciated.

This year we expanded the survey across the entire Midwest region to include the Chicago, Cincinnati, Madison, Milwaukee, Nebraska and St. Louis markets. Coming soon will be a consolidated survey report for all these markets, providing you a directional benchmark not only against other financial and investment professionals in the Twin Cities, but also across the region.

Thanks for your interest!

 

Performance & Valuation Prime: Decision-Changing Analysis, From Arcane Accounting to Economic Reality – Event Recap

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by Robert Boucher, CFA

Valens Credit Strategist Joel Litman presented to the Society on the topic of adjusted fundamental analysis and discussed some of the unique tools Valens Credit applies in their analysis. Mr. Litman began by taking the audience through a number of examples of how, in his view, GAAP, IFRS and IAS accounting—both in design and because of management’s discretion—fall short in consistently providing measures useful for fundamental analysis.  Specifically he identified pensions, rents, R&D, acquisitions and divestures as areas an analyst should focus on and should consider analytically adjusting to arrive at adjusted cash flow and income measures. Importantly the adjustments have implications for valuation of both equity and fixed income securities, as equity analysts project growth and apply earnings multiples or discounted cash flow models; and as credit analysts focus on coverage and cash flow leverage metrics. Mr Litman also described how differences in incentive structures help to explain some of management’s accounting choices, with earnings per share incentives driving different choices than a cash flow incentive or a return on assets incentive. Unfortunately for the analyst looking for a quick fix, Mr. Litman says the only realistic approach is to roll up the sleeves and start digging.

In addition to performing the time-consuming work of digging into individual company financials, releases and other printed material, Valens also attempts to glean important nuggets from earnings calls and other recorded presentations using audio forensics tools. Mr. Litman describes Valens’ use of electro audiogram scanning technology to “listening” for cues in the tempo, timbre, tone etc, and that, for example, depending on the context, a management team signaling confidence and excitement in its cues can give Valens added confidence in growth prospects.

Mr Litman closed by framing the current credit cycle relative to historic measures through the lens of adjusted fundamentals, showing similarities to market signals from a century ago. Valens’ research suggests the U.S. is in the back half of a first stage bull cycle, with strong corporate profits, easing credit conditions around the world, credit demand that hasn’t yet moved into the important new-investment stage, and strong asset returns. On an adjusted basis, forward price-earnings multiples are still shy of prior peaks and capex is supportive of additional growth.

Joel Litman was an energetic and deeply knowledgeable speaker and, judging by the level of engagement throughout the presentation, the topic was an important one to attendees.