2012

Consistency and Customization

Excess Returns

Monthly insights for investment marketing and sales professionals


	December 2012


	At every step along the path to asset growth – from introductory consultant meetings to client reviews – smart investment managers seek to communicate one set of consistent messages about their identity. But consistent communications fall under the heading of “easy to talk about, difficult to do.” This issue of Excess Returns considers how to avoid behavioral biases that compromise consistency. With best wishes, Liz Hecht Founder, Principal and Director of Research Print a PDF of this newsletter

Volume 2 | Number 7

In This Issue

Consistency and Customization

The Penalty Box

Custom Nation

Alpha Partners is an investment marketing firm specializing in research and presentation strategy. Our goal is to create alpha (excess returns) by helping investment firms win, keep and diversify assets under management.

Alpha Partners LLC
435.615.6862

www.alphainvestmentmarketing.com

Consistency and Customization

A few years ago I attended a presentation by a consulting firm during one of my client’s annual investor conferences. What immediately struck me about this presentation was that line for line, joke for joke, page for page, almost word for word, it was exactly the same presentation as the one that this same firm had given at this same client conference a year ago. I looked around the room and saw many of the same faces in the audience that I had seen the previous year – the same people, smiling and listening intently. Either this is really happening, I thought, or I am trapped in some awful déjà vu experience, a sort of Groundhog Day all my very own.

But it was really happening. I later checked the packet of conference materials from the prior year and the consulting firm was indeed giving the exact same presentation. And yet no one seemed to notice or, if they did notice, they didn’t seem to mind. I have thought about this experience for a long time and I still don’t know what to make of it. I do know, though, that it says something important about the delicate connection between repetition, sameness and consistency.

Behavioral Biases That Compromise Consistency

Everyone in the investment world agrees that consistency is a good thing. Consistent investment process implementation begets repeatable results and consistent communications beget loyal clients who understand the investment strategy. But there are inherent behavioral biases that make consistency difficult to achieve. Here are three that I constantly confront in working with investment firms as well as in communicating about my own company:

1.	The urge to start all over again. “There’s a big piece of business on the line! Let’s take a fresh look at our presentation and revise it … Let’s reconsider the key points we want to make about our competitive advantages.” The more important something is, the greater the human tendency to overcomplicate it. But the urge to work harder because the stakes are high often compromises consistency. In such cases, repetition is perceived as being stale and dull. But most often repetition is desirable, particularly when a firm already has defined a concise, truly differentiating set of marketing messages. Especially in a marketing context, repeating those messages in the same way, over and over again, is more beneficial than constantly trying out new messages or trying to communicate the old messages in a new way. Many people in the audience I describe above most likely had forgotten the main messages from that same presentation a year ago, just as you or I might likely forget the plot of a movie we loved and saw only, say, a few months ago. Instead of taking a fresh look at everything, a presentation team should rehearse customized delivery of the existing story.

2.	A misunderstanding of what it means to customize. When I say “customized delivery,” I mean that key parts of the same core presentation are customized to a specific audience, paying deference to their identity and their specific investment goals. It took me years to understand that by “customize” some investment firms meant customize the presentation to the personal preferences of different presenters within the same firm. I asked about this once: “You keep saying that you’ve ‘customized’ the presentation and yet there is not one page or even one bullet that addresses a specific audience?” “Oh, no,” I was told, “by ‘customize’ we mean create different versions of the presentation consistent with the preferences of individual presenters.” “Oh,” I said, too dumbfounded even to get on my soapbox and explain why this is such a bad idea.

3.	The inability to be concise. Verbosity makes it impossible for consistency to happen. Someone recently gave me a new business presentation for an investment firm that genuinely fills a niche. But the first page, rather than simply describing this firm’s singular competitive advantage, instead presented 6 bullets and 15 sub-bullets. Such visual and verbal clutter makes consistency impossible. To be consistent, one must first be able to answer the question, “Consistent about what?“

So is the consulting firm giving the exact same presentation practicing a desirable form of repetition, the kind of sameness that creates consistency? Or is it being lazy by repeating the same canned presentation? A bit of both, I suppose.

I do know that I tried giving the same Alpha Partners presentation to an existing client recently, reinforcing up front a set of key messages about our firm. It didn’t work. Or rather, it started off weak because we ultimately did get the business. But at first my client was bored. I salvaged the presentation by picking up on this quickly and shifting gears to focus on his specific project. But I should have customized a few more key pages of the presentation in advance so that it more directly addressed his needs, his experience and exactly what he was looking for … then and only then should I have briefly reiterated how Alpha Partners is different from our competitors.

Will I ever again give exactly the same presentation to the same audience? Tempting as it is, given a demanding schedule, the answer is no. I still believe it is critical to find just the right balance between consistency and customization.

The Penalty Box

The slightest sign of inconsistency – in investment process implementation, for example – and an investment firm might find itself in the penalty box with a given consultant for several years. In my experience, there are several areas where an investment firm may be vulnerable in this regard:

•	Inconsistent marketing literature. The RFP response, for example, might describe the investment process in terms that vary from the description provided by the presentation book.

•	Inconsistent responses during the Q&A. One member of the investment team might reveal a different intellectual slant relative to a teammate (e.g., a growth bias in a value firm or a different approach to portfolio construction). Such diverse perspectives may in reality be healthy for the investment process, but your firm still needs to present a consistent face to the world.

•	Misinterpretation. If not presented correctly, new information about the investment process (or even old information presented in a new way) might seem indicative of a major change to a consultant.

Consultants like investment managers who are relentlessly, even boringly the same. Building consistency with repetition and sameness is particularly critical given the importance placed on repeatable results. Investment marketers should weigh this carefully the next time they consider that fancy new process diagram.

Custom Nation

Of course I had to read this book: Custom Nation: Why Customization Is the Future of Business and How to Profit from It by Anthony Flynn and Emily Flynn Vencat. The book explores successful customization strategies employed by companies as diverse as Shutterfly, Chipotle and Procter & Gamble. It wasn’t only the penguins on the cover that drew me in; it was the following claim on the back flap: “What’s the secret of a successful 21st century business? Customization. For every industry and every product. Embrace it or get left behind.” Hmmm … Why can’t more investment firms successfully customize their communications with clients and potential clients – especially firms that already do a good job of customizing their portfolios to specific client investment objectives? As suggested earlier in this newsletter, maybe because “customization” sometimes still is confused with a lack of consistency.

Questions? Comments? Dissent? Click here.

Click here for other issues of Excess Returns.


© 2012 Alpha Partners LLC	Alpha Partners LLC Marketing for Excess Returns® 1062 Oakridge Road South \| Park City, UT \| 84098

You are receiving this newsletter as a member of the investment community. If you no longer wish to receive it, please respond to this email with “No More Penguins” in the subject line. To subscribe to this newsletter, send an email with your request to info@alphainvestmentmarketing.com. Your privacy is important to us. We will never rent, sell or share any information that you provide.

Know Thy Competitors

Excess Returns

Monthly insights for investment marketing and sales professionals


	November 2012


	Competitor intelligence can confer a decisive advantage in winning business — or it can prove to be a foundation for indecision and mediocrity. This issue of Excess Returns explores the uses and abuses of competitor intelligence by asset managers. With best wishes, Liz Hecht Founder, Principal and Director of Research Print a PDF of this newsletter

Volume 2 | Number 6

In This Issue

Know Thy Competitors

A New War Story

Rework

Alpha Partners LLC
435.615.6862

www.alphainvestmentmarketing.com

Thank You

We want to thank everyone who inquired about this newsletter over the past few months. We suspended publication owing to an unprecedented volume of work here at Alpha Partners. Thanks to the many inquiries we received, we are resuming publication with a renewed sense of purpose and dedication. Going forward, please let us know whenever we can address a topic that you may find of interest.

Know Thy Competitors

We were having coffee and some really nice pastries, my client and I, when he asked me this question: “Liz, you always place such heavy emphasis on us knowing our competitors. Why should we care about our competitors? Why shouldn’t we work as hard as we can to provide superior investment returns and excellent client service? How does studying our competitors help us do that?”

He went on to describe the attitude of a top chef he had seen interviewed recently. The chef proudly professed complete disregard for the culinary concoctions of other chefs. My client asked me if the chef was wrong.

At the time, I recall thinking, “Ahh, the investment professional as artiste.” But isn’t the investment world really more like sports, driven mainly by intense competition and all the numbers and statistics that go with that?

His question certainly did have merit, though. After all, it can be counterproductive to dwell on the competition.

Best Practices in Utilizing Competitor Intelligence

Whenever I start working with a client, I always ask about their competitors. Responses vary. One firm recently sent me a complete SWOT report based on analysis of its major and minor competitors. (SWOT stands for Strengths, Weaknesses, Opportunities and Threats.) Another provided a voluminous file. Sometimes I simply receive a well-organized list.

Very often, however, I am told, “No, we don’t track our competitors because (a) we don’t have time, (b) we have so many competitors that such information is not really relevant (this most often from value equity managers) and (c) the consultant won’t tell us who our competitors are so it doesn’t matter anyway.” And then, of course, there is this notion of the business professional as artiste, toiling away in his or her own private patch of excellence where nothing matters but getting it right for the sake of clients. This approach is validated by well-regarded marketing experts and is particularly well articulated by Jason Fried and David Heinemeier Hansson in their 2010 book, Rework.

I have thought about my client’s question for some time now, and I think I finally have a clear answer grounded in when competitor intelligence works (uses) and when it retards effective action (abuses).

Uses

Sharper competitive differentiation through awareness. Most investment managers look and sound alike. The investment manager who understands this based on a study of its competitors is in a better position to stand out — either through emphasis on genuine competitive advantages or through stronger storytelling or, ideally, both.

Confidence based on preparedness. Business can be won or lost given how an investment firm answers a question, and the questions may well depend on who is competing for the same slot. So why wouldn’t you want to know everything you can about your competitors’ identity, strengths and weaknesses? Such information may result in your being just that much sharper in answering a question. The main thing, however, is that simply by knowing as much as possible about your competitors, you are more likely to walk into a competitive situation (a finals, say) with a sense of confidence.

Understanding where your strategy fits in a portfolio. Along with the dictum, “know thy competitor,” I have also always preached, “know thy client,” and some of our industry’s most successful professionals operate precisely at the intersection of competitor and client knowledge. These professionals make it a point to know how their strategy can contribute to a client’s total portfolio. To know this, they must understand the competitive landscape and where their investment strategy fits within it. Is their strategy a core holding or a complementary allocation? Or could it be either, depending on the potential client’s specific needs? Investment firms often tell me that such knowledge by definition resides with consultants. As in so many other areas, this cedes too much power to consultants. Most consultants are smart, hardworking people, but it’s not their job to market your strategy effectively.

Abuses

Copycat interpretations. The biggest abuse of competitor intelligence is using it merely to copy. By “copy” I don’t mean studying what works and doesn’t work, seeking to learn from competitors’ successes and avoid their mistakes. I mean the complete lack of originality that expresses itself in the statement, “We want one … exactly like that!” — be it a web site or a presentation book or a thought leadership program. This desire to imitate may be why investment companies often use precisely the same imagery (gears, a globe, a chess board, Greek columns, people shaking hands, puzzle pieces coming together, a magnifying glass, compasses and other navigational devices) as well as the same language in their marketing literature. In brochures often entitled “The XYZ Company Difference,” client service always seems to be “unparalleled” while dedication to investment excellence almost invariably is “unwavering.” When confronted with such massive sameness, clients can be forgiven any tendency to make decisions based solely on short-term numbers.

Obsessing about the wrong things. Knowledge of competitors should serve as context. It should not become a distraction that takes focus away from what matters: meeting clients’ investment and service needs. At certain points in the evolution of your company as a business, for example, you might be better off researching investments than researching competitors.

Statements that cannot be proven. I counsel my clients to be ready with answers to any questions about competitors but never to mention competitors explicitly. My rationale is that in most situations investment firms cannot know everything about their competitors, so why risk an inaccurate or naïve statement. (A new war story in this issue, however, describes a new business win for a firm that aggressively positioned itself as the best solution relative to two specific competitors.)

Since considering my client’s question, I’ve had the good fortune to work with a number of former professional athletes. These professionals always provide me with a wealth of competitor intelligence. They see limited information or many different competitors as challenges to be met as opposed to a rationale for indifference. So yes, to a limited extent, I buy the concept of the investment professional as artiste. Absent the abuses noted here, however, the investment professional as athlete — securing every available piece of information to compete more effectively — makes a whole lot more sense.

A New War Story

Here is a true story told by one of our clients who manages a fund of funds:

“One of the managers in our funds recently won a significant mandate by demonstrating exceptional knowledge of its competitors. There were three firms competing for the business: Companies A, B and C. Our funded manager, Company B, was the second to present out of the three. Company B opened its presentation by saying, in effect, ‘We understand that you just heard a presentation from Company A. Company A told you this, this and that about its competitive advantages. Now here’s the part of the equation that Company A is missing.’ In closing, Company B said, ‘You are about to hear from Company C, who will tell you that, that and this. What’s wrong with Company C’s approach is the following … Our investment approach, by contrast, solves for the shortcomings of both A and C.’

The potential client, who had planned to split the mandate, decided instead to award all the assets to Company B. The client described Company B’s presentation as postdoctoral in its sophistication compared to preschool and elementary school efforts by A and C. By aggressively describing its competitive strengths, B demonstrated a more detailed, nuanced, in-depth knowledge of the asset class where it competes for returns.”

Would we recommend this exact approach to one of Alpha Partners’ clients? Not exactly. We recommend against specific references to competitors. We would, however, recommend that presenters tell a story so embedded in competitor knowledge that they get the same message across — sophisticated knowledge of the competitive landscape — without explicitly mentioning competitors by name.

For more about real-life wins and losses, please visit War Stories.

Rework

“Focus on competitors too much and you wind up diluting your own vision. Your chances of coming up with something fresh go way down when you keep feeding your brain with other people’s ideas.”

— From Rework, by Jason Fried and
David Heinemeier Hansson

I started reading Rework for its perspective on competition. But I finished reading it for many more reasons. Consistent with its title, Rework inspires readers to rethink old approaches to practically everything in business — from the need for a detailed plan to the dubious glory of workaholism. If you want to start a company, or if you simply want to work more effectively, Rework is a great read.

Rework provides inspiration for anyone who wants to be more effective in today’s business world.

Questions? Comments? Dissent? Click here.

Click here for other issues of Excess Returns.


© 2012 Alpha Partners LLC	Alpha Partners LLC Marketing for Excess Returns® 1062 Oakridge Road South \| Park City, UT \| 84098

You are receiving this newsletter as a member of the investment community. If you no longer wish to receive it, please respond to this email with “No More Penguins” in the subject line. To subscribe to this newsletter, send an email with your request to info@alphainvestmarketing.com. Your privacy is important to us. We will never rent, sell or share any information that you provide.

What Clients Want

Excess Returns

Monthly insights for investment marketing and sales professionals


	May 2012


	Inspired client service can delay terminations due to poor investment performance — possibly long enough for performance to turn around. Yet in their client presentations investment firms make the same mistakes they often make in new business presentations — with a few extra gaffes thrown in for good measure. This issue of Excess Returns looks at how investment companies can improve communications to their most important audience: existing clients. With best wishes, Liz Hecht Founder, Principal and Director of Research Print a PDF of this newsletter

Volume 2 | Number 5

In This Issue

What Clients Want

It Matters

A Field Guide

Alpha Partners LLC
435.615.6862

www.alphainvestmentmarketing.com

What Clients Want

The first time I ever heard a client service presentation, I thought it was a mistake. Approximately five minutes into the presentation, I leaned forward and asked, “You know this is supposed to be a client meeting, right — not a new business presentation?” “Oh yes,” the presenters assured me, “we know …” and on they went enthusiastically telling me about their philosophy, their process and all the new additions to their team. Where, I wondered, was the discussion of investment performance, top contributors and detractors, new purchases and sales? And when might they get to the rationale for current portfolio positioning?

This presentation team did finally get to the point … just as their time was about to run out. But it was too little too late, particularly as their performance at the time was weak. The entire presentation, in fact, seemed designed to delay focus on the real issue at hand: disappointing numbers.

Subsequently I have learned that this mode of presenting to clients is not at all unusual. Just as often occurs during new business meetings, performance and the portfolio are routinely sacrificed on the altar of philosophy, process and people.

Best Practices for Client Presentations

It doesn’t have to be this way. Here are a few key best practices for conducting effective client meetings:

Cut to the chase. Open with investment performance and the portfolio. Describe what went right, what went wrong, what changes your team has made to the portfolio and why. Then you can briefly touch on the investment strategy and any important news about your organization, always allowing extra time for questions before closing with a description of how the portfolio is positioned for the future.

Resist the urge to sell yourselves all over again. In our business, one often is advised that it is necessary to “resell the relationship” by reminding clients why they hired your firm. This certainly is good advice. Based on the many client presentations I have witnessed, however, investment companies follow this advice to a fault, in effect acting as if no prior relationship exists and reeducating clients from scratch every time they meet. A logical response is, “We know all that. We hired you already, remember? But what have you done for us lately?”

Reinforce your investment strategy — in the context of the client’s portfolio. Every client meeting is an opportunity to build fresh understanding. For example: “This is a classic holding for us as we invest in companies that meet three important criteria …” Or: “This recent underperformance can primarily be attributed to our underweighting of X and Y sectors. As you may recall, we avoid X and Y because performance is dependent on interest rate fluctuations and commodity price movements.” When performance is strong, remind your clients why it might not always be strong. When performance is weak, remind them why it is likely to turn around given the nature of your strategy.

Understand when exceptions are necessary. In certain exceptional cases, it will be necessary to resell the relationship. The arrival of an important new decision-maker, for example, may necessitate a synopsis of your firm’s identity and investment strategy. Providing such a synopsis will build understanding of performance patterns that may prove critical at some point in the future.

What clients want, ultimately, is straightforward commentary about what is going on in their portfolio. You should remind them why they hired you — but always in the context of what you have done for them lately.

It Matters

In planning this month’s newsletter, I researched the topic of client service on the Internet. What struck me is the number of current articles and research papers that still pose the question, “Does client service matter — or is it really all about performance?” Long on data and short on insights, many researchers with impressive credentials seem to have spent a great deal of time and ink providing the obvious answer that yes, it matters. Oh good, so glad we got that established. Now let’s reconsider the many commonsense reasons why it matters:

Time to turn around when performance is subpar. Depending on the asset class, you may only have a few quarters to turn performance around prior to termination. Strong service generates understanding of the investment strategy, which in turn can create a climate of tolerance around performance disappointments, at least for a while — and a while may be all you need to get back on track.

The fan factor. Strong service can make the difference between clients who are card-carrying fans and thus will tolerate a few seasons of disappointment and — at the other end of the spectrum — clients who loathe your organization and will jump on any excuse to see the back of you.

Cross-sales and referrals. Fans also generate cross-sales and referrals. By contrast, clients dissatisfied with service are unlikely to refer your firm or buy another product — even when you have hot dot numbers. And how many managers outperform with such unfailing consistency that they can afford to deemphasize service? Precisely. Yet investment firms continue to commission research proving the need for compensation programs rewarding client service professionals. This represents a huge opportunity for companies that innately get it.

A Field Guide

What Clients Love: A Field Guide to Growing Your Business, by Harry Beckwith, is a classic filled with inspiration for marketers and client service professionals. I keep it on a reference shelf and refer to it as I would a dictionary — or a bible. Mr. Beckwith’s pithy approach (a typical chapter is one or two paragraphs long) makes this book a highly desirable alternative to the many tomes written on the same topic by Ivy League PhDs who, sadly, cannot write a clear sentence. In a chapter entitled “Ask Questions Like a Priest,” for example, Mr. Beckwith writes, “To get the truth, use phone interviews by independent third parties. Like the priest behind the screen, those third parties will get candid answers and you will get more accurate insights into your customers and prospects. To get the truth, get on the phone.” To which I can only say, Amen!		What Clients Love is a classic filled with wisdom for investment company marketers and client service professionals.

Questions? Comments? Dissent? Click here.

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© 2012 Alpha Partners LLC	Alpha Partners LLC Marketing for Excess Returns® 1062 Oakridge Road South \| Park City, UT \| 84098

The Rewards of Discipline

Excess Returns

Monthly insights for investment marketing and sales professionals


	April 2012


	Virtually all investment companies define “discipline” as a strength or even a competitive advantage. This issue of Excess Returns considers an important manifestation of discipline — being systematic — as it applies to all aspects of running an investment firm, from portfolio management and client service to sales and marketing. With best wishes, Liz Hecht Founder, Principal and Director of Research Print a PDF of this newsletter

Volume 2 | Number 4

In This Issue

Tillie

Special-Ops Editing

The Power of Habit

Alpha Partners LLC
435.615.6862

www.alphainvestmentmarketing.com

Tillie

The story I am about to tell happened a long time ago, but I remember the details vividly. I was in a cab on the FDR Drive in New York City on a brutally hot day when I saw a Doberman/Rottweiler mix sitting by the side of the highway, panting and looking distressed and disoriented. There was nothing in sight but fast-moving traffic, asphalt … and this dog. She was wearing a bright-red harness. I got out and went up to her. She sniffed my hand, then let me lead her by the harness while the two of us hailed another cab. She had no tags and none of the New York shelters I checked had anyone looking for her, so I set about finding her a new home.

As part of my volunteer job a few weeks later, I happened to be confirming information about all of the animal shelters in our area for a flier put out by our local dog owners association (“What to do when you find a stray dog?”). I thought I had called all of the New York City shelters, but in double-checking found there was one I had missed. I was tired at the time and the following craven thought crossed my mind, “Ahh, I don’t really need to double-check everything. The information is probably fine as is.”

But I am a systematic soul by nature and I have long worked in the investment world, where discipline is critical. So I called this shelter and while checking its phone number thought to ask, “Hey, you didn’t have anyone come in looking for a Doberman/Rottweiler mix lost a few weeks ago, did you?” “Oh my God, yes!” said the woman, “Was the dog wearing a red harness?”

How Investment Companies Can Be More Disciplined

Usually the rewards of being disciplined are not as immediate as helping a family find their lost dog. But recalling this experience makes me think of the many ways in which discipline matters in my field:

Investment process description and implementation. Does your firm document the investment process step by step in writing and does the investment team follow the process consistently as documented? Does the team adhere to portfolio diversification guidelines or is a certain fuzziness occasionally allowed? Does expediency sometimes trump discipline? Does the sell discipline provide a true framework for action or is it merely a series of generic reasons for sale, entirely subject to personal interpretation — “we find a better idea,” “valuation is realized” or (my personal favorite) “fundamentals have deteriorated.” Who does what when and are these actions really performed systematically?

Results measurement and analysis. When the investment process does not work, does the investment team know why? Or are they twisting in the wind? I have spent many hours over the years crafting credible answers to questions such as, “Why are you underperforming and what do you plan to do about it?” and “What have you learned from your investment mistakes?” I can usually tell when the answers make sense or when they consist mainly of hope with a dash of spin. Real answers tend to come wrapped in research and analysis — systematically measuring where performance comes from — and the firms that tend to measure results in one area (investing) also tend to measure results in other areas (client service).

Information sharing. A portfolio specialist once told me that salespeople and client relations professionals at his firm did not receive bonuses until they had updated their notes in the company’s database. “Wow,” I thought, “this is treating them like children — as in, ‘You can’t have any ice cream until you do your homework.'” The reality, though, is that many client-facing professionals do not update their company’s database routinely or in depth. Our company frequently asks for database notes about a specific product. Sometimes, the information we receive is stellar — detailed observations, insights and feedback that provide a valuable history of market interactions. Too often, though, what we get is unintelligible and/or completely lacking in information value.

Editorial standards. Does a professional proofreader review every document your firm sends to clients, consultants and prospects? Does your company follow a style sheet to ensure accuracy and consistency? (See Special-Ops Editing for more on the importance of a style sheet.) Are all facts checked in every document? In my experience, rare is the investment company that can answer “yes” decisively to all of these questions. There are many different categories of people who are likely to be annoyed by shoddy and inconsistent editing: (1) people who care about language, (2) people who make their living as teachers (think decision-makers at university endowments and state teacher retirement funds), (3) people who despise verbosity (which usually results from nonexistent or sloppy editing) and (4) people who value quality and consistency and are offended (whether consciously or subliminally) by its absence. Hmmm … that sounds like just about everyone, doesn’t it?

The dog’s name was Tillie and her owner had been calling her local shelter frantically for several days after Tillie ran away en route to the vet. The owner and her entire family (mother, father, sisters, brothers and even a few cousins) came to bring Tillie home. There was much hugging and weeping and they gave me a sizable contribution for our dog owners association.

If I had not checked that one fact in that one document (while feeling tired and not wanting to be bothered), Tillie most likely would have been placed in another home, never to be united with her family. But as I give myself a pat on the back for this one disciplined action, I also start thinking about all the different ways I can become more disciplined in running my own business and in helping my clients to do the same.

Special-Ops Editing

A friend who always sends me cool Internet links recently provided an excerpt from an email sent by author Robin Sloan about his editors at Farrar, Straus and Giroux. Mr. Sloan describes the use of a style sheet to ensure accuracy. A time line is created. Character descriptions are cross-referenced. Inconsistencies are culled or corrected. Here is how Mr. Sloan describes the rigor and efficiency of his editorial team:

“FSG’s copy-editing team is like a special-ops squad. Clear the area! Check for bombs! Here’s the map! Go go go! I’m the timid informant being shepherded to a safehouse by this super-competent crew, and once I’m inside, safe from harm (and spelling everything consistently) they’ll head right back out into the firefight.”

The intense discipline described here underscores the need for higher editorial standards in the investment world. All investment companies should have an updated style sheet that serves not only as a guide to editorial consistency but also as a guide to consistency of the story. For instance, the special-ops editors at Alpha Partners might discover that the same quantitative investment model is sometimes described as a “relative value model” and other times as an “intrinsic value model.” At best, prospective investors are confused by such inconsistent labeling and at worst they may suspect (probably correctly) that the investment process is not implemented consistently.

The Power of Habit

In The Power of Habit, Charles Duhigg describes how changing one habit can create “a chain reaction, starting a process that, over time, transforms everything.”		The Power of Habit: Why We Do What We Do in Life and Business, by Charles Duhigg, explores the role of habits in creating change. I love this book for several reasons. It shows how researchers reinterpret their findings to shift strategy, turning a product with disappointing sales into one that earns a billion dollars a year. It tells the story of how changing a “keystone habit” revitalizes the culture and earnings of a major corporation. Perhaps best of all, it provides invaluable guidance for individuals seeking to replace bad habits (smoking, drinking, overeating or nail biting) with good ones. My favorite part of the book is the section describing how “small wins fuel transformative changes.” If you are serious about creating change, in yourself or in your organization, you should read this book.

Questions? Comments? Dissent? Click here.

Click here for other issues of Excess Returns.


© 2012 Alpha Partners LLC	Alpha Partners LLC Marketing for Excess Returns® 1062 Oakridge Road South \| Park City, UT \| 84098