Art & Science Archive
Investment managers often emphasize that they don’t follow the crowd when it comes to investing. Alas, most investment firms do follow the crowd, slavishly, in the language they use to describe their competitive strengths. There is an old Texas saying, “My brain rolled over and died” to describe language that is so predictable, so tired and over-used, that it not only fails to engage an audience, but actually shuts an audience down.
“We hit singles and doubles.” But you certainly aren’t going to hit any home runs in a presentation with this tired language. A consultant friend says she feels like just getting up and walking out every time she hears a money manager say this during a meeting.
“In today’s fast-paced global markets…” This breathy little catchall has served as the opening for 99% of the investment marketing literature written since the mid-1980s. Yes, the markets are indeed fast-paced, so much so that one is surprised by the relentless persistence of dreary clichés such as this one.
“What differentiates us is our people.” Consultant Jeff Slocum makes the following suggestion: “When we ask you to describe your sustainable competitive advantage, do NOT say, “Our people.” If your people were demonstrably smarter/better than those at other firms, they would be able to identify some competitive advantage to exploit systematically.”
“We invest for the long-term. We do not follow short-term fads.” Every investment manager says this. Every single one. Even the managers with significant portfolio turnover. We hear it so often that we sometimes capriciously yearn for an encounter with a faddish manager who invests for the short-term — just to hear something different. In reality, a long-term perspective has spelled success for many investment firms, especially those who stuck to a steady course in the late 1990s. But bringing the benefits of long-term investing to life requires fresh language and specific examples — as opposed to flogging the obvious.
“We kick the tires.” This is the ubiquitous metaphor for bottom-up research. We once heard a plan sponsor say that hearing this one time too many made her want to disqualify the offending manager from a search.
“We combine the entrepreneurial spirit of a small organization with the resources of a large organization.” There actually are firms for which this is a valid claim. Mostly, though, the claim falls flat because (1) one hears it so often, and (2) it is so often untrue (favored as it is by large organizations where bureaucracy long ago crushed anything like a spirit of entrepreneurship).
“We invest using a unique strategy with a proprietary model.” Those that got it don’t flaunt it! The truly proprietary models either don’t need the label or carry a far more descriptive, meaningful label. “Proprietary and unique are the two words that make my eyes glaze over immediately during a presentation,” says an influential chief investment officer. “What comes to mind when I hear this sort of thing, is ‘How, what, when, where and why? Also, Show me!'”
Long, meaningless acronyms. More obnoxious and potentially damaging than the combination of “unique” and “proprietary” is unique and proprietary saddled with the added burden of a lengthy, completely meaningless acronym. As in, “Our proprietary Quantitative Inference Adjustment Model (QIAM®) is an integral part of our process.”
Buzzword abuse. Suddenly, there you are, speaking to a room full of people you would like to impress saying things like, “thinking outside the box” or “raising the bar” or “at the end of the day” or “value proposition ” or some other lifeless consultant-speak. How did this happen? This isn’t a bad dream. It is real life and it is happening to you right now! Why? Probably because you have not made sufficient time to prepare, to deliver a customized, straight-from-the-heart presentation that addresses a prospect’s specific needs.
At the end of the day (sorry, couldn’t resist!), that’s the antidote to stale language: preparation. If you have prepared sufficiently, you will not need to rely on clichés or buzzwords. Keep in mind, too, that there is an exception to every rule. There are avid baseball fans for which the truism, “We don’t swing for the fences,” actually works!< If there are any topics that you would like us to explore on this site, or if you have any comments on this article, please let us hear from you.