“Our firm is kind of like a teaching hospital,” said Kim Shannon, President, Founder and CIO of Sionna Investment Managers. The second part of her presentation to the CFA Society Toronto at the National Club on March 5, 2014, described what she looks for in her employees, and how the team works. Below are eight insights on selecting and retaining top talent.
Grow their own – Shannon noticed early on that the most successful investment firms grew their own talent, namely, they hired junior employees and trained them over a period of years for senior positions.
Greed is not good – “We don’t take on interns—but we don’t pay a lot,” said Shannon. Her goal is to keep greed out of the work culture. Early on, she noticed the best investment managers were motivated by curiosity and interest. They weren’t interested in switching from one shop to the next for higher pay; they wanted to do high-quality analyses and solve problems.
“Lunchability” is big – When hiring, she looks for curiosity and a breadth of exposure to all areas of life. Is the person interested in enough things to make them a stimulating conversationalist at lunch?
So is backbone – You need people who are willing to go against the crowd, because value investing means being able to spot the diamonds in the rough, and the future stars that other analysts are slagging off. So pick people who are comfortable with being different from the crowd. As a side note, Shannon’s book, The Value Proposition, describes an early life where she was often an outsider at school.
Boring does not stay – Shannon said that potential hires are asked to write a research report and present it to the investment team during the interview process. If the research report is boring and hard to digest, the prospect is not hired. After all, the team needs analysts who must constantly write and read each others’ reports—and how appetizing would that be if, from the start, you knew someone wrote boring reports?
How green is my trainer – The newest hire is trained by the most junior person at the firm. “This is a good way for [the most junior person] to realize how much they have absorbed, even though they might think they haven’t got it all.”
Birdie go splat – When the time comes, the new hire must write and present a report to the team. It’s tempting to push them out of the nest too early to see if they can fly, but “we don’t want to see them hit the ground.”
Well-rounded is over-rated – Shannon referred to Tom Rath’s book Strengthsfinder, which helps identify individual strengths. She does not care to find employee weak spots, and somehow make them stronger in these. Rather, she wants to find employee strengths and build on them.
Thus concluded Kim Shannon’s lively and frank comments on the selection and development of her winning team at Sionna Investment Managers.ª