How Hedge Funds Can Still Build And Maintain Team Cohesion During The Pandemic
The COVID-19 pandemic continues to have a huge impact on the world in so many ways. In the business world, it has caused huge disruption and forced organisations to make drastic changes to the work they do and how they do it. Many companies have been forced to make significant redundancies, some have had to radically change their business models and most teams have shifted to working remotely.
The COVID-19 virus struck with alarming speed. The exponential spread across the globe, enabled by global travel and supply chain logistics, meant that the requirement for business to adapt was overwhelming and very sudden. The initial period was one of adrenalin and firefighting; we scrambled to cope with the imposed lockdown restrictions. There was an energy that came as a result, and the novelty factor of working remotely kept people engaged and motivated.
As time has passed, it has become increasingly apparent that this disruption is going to go on for some time. As the world moves through second and third waves of the pandemic, social distancing requirements have meant teams continue to work remotely and will do for the foreseeable future. The initial adrenalin fueled period of react and adapt has passed and we are now experiencing more apathy, frustration and disengagement with the remote working experience.
Imagine a runner who goes off the blocks fresh and at a sprint, only to find themselves settling into the tired gait of a long-distance runner. One of the problems though is that the runner cannot see where the finish line is, so must just keep going without knowing what pace they need to go at. Teams within hedge funds are now in the slog of the back straights, with no end in sight. Heads go down, morale dips, and energy is depleted. This could happen to investment and support teams before COVID-19 when they were working conventionally and face to face. Working remotely has exacerbated this effect.
Over half (55%) of hedge funds surveyed recently by KPMG and AIMA said they were worried about diminished team building and firm culture. In their 2020 COVID-19 special edition, KPMG/AIMA found that regardless of the size of the hedge funds, this was the key consideration for fund managers. It is not surprising to find other personnel-related issues – e.g. retaining talent – were also at the forefront of fund managers’ minds.
The COVID-19 experience for work teams in many industries, including hedge funds, can be plotted along the Kubler-Ross change curve. The initial period of shock and denial has led to frustration and now depression, where people lack energy, clarity, and a desire to keep going. There is a paradox at work, where technology has enabled us to work remotely and connect more widely than ever before, and yet we are experiencing greater isolation, loneliness and disengagement. We have yet to move through this period to the level of acceptance and successful integration.
One of the problems is that hedge funds jumped quickly into remote working without consciously designing how they would work together. Simple things like ‘should my camera be on’? ‘Why aren’t they letting me ask my question – I have my hand up’? cause confusion and frustration because no one has had a discussion to agree what is OK/not OK about virtual meeting etiquette. No protocols and standards have been agreed about how to work virtually.
Teams are also underutilizing the platforms available. We all picked up these new tools without being trained on how to use them, both on a technological level but also a behavioural level. While hedge funds are being supported by some very sophisticated technology when it comes down to price feeds or risk analytics, interaction with other members of the team, with key service providers, and even strategic investors can be challenging.
Do we fully utilize the technology like break out rooms, chat functions and screen sharing? Are there too many virtual meetings which our brains are not equipped to deal with, and are they too long?
Parkinson’s Law states that work expands to fit the time available for its completion. If we set up a Zoom meeting for an hour, we tend to use the full hour when perhaps we could have got the job done in 30 minutes. This is a problem that existed with meetings before COVID-19, but it is magnified now by the remote working experience. It is also about making the best use of the meeting time. How often is valuable meeting time spent doing things that could have been done individually beforehand? For example, how many meetings are spent looking at data? Endless PowerPoint slides take up precious time. Could those slides not have been distributed beforehand for people to absorb the data at their own pace and allow for reflection, so that the meeting time could be spent on constructive debate and decision making? Could you halve your meeting time as a result?
One of the key things that teams need and now miss by working remotely is those undefined but precious relationship building interactions that happened in snatched, unplanned moments during the workday. It can be as simple as a quick hello and enquiring about how someone’s weekend was in the elevator ride to your floor, or those coffee conversations where problems are shared and advice given. Social occasions like conferences or just going to see clients provided the opportunity to interact with other people in ways that are not possible now. The same goes to the people you used to work with in the office. When working remotely, we join a meeting and get straight into the work. Teams are missing all those really valuable touch points that happen organically when you are rubbing shoulders with each other in the pre-COVID-19 conventional, face to face existence.
Human beings are social, tribal animals and we are hard wired to work and live in social groups together. This is why, when it comes to incarceration, we use solitary confinement as one of the worst forms of punishment because we know it is hugely damaging and is therefore a massive deterrent. As much as we are lucky to have the ability to see and talk to each other relatively easily, it’s just not the same as being face to face. We all know that we are far more effective communicators when we are in the room with people, and everyone is missing the opportunity to be physically present with their team.
What needs to be done? Firstly, teams must accept that this is not going away anytime soon. COVID-19 continues to spread and even if an effective vaccine can be launched, it will take months if not years to inoculate everyone. In his book ‘Good to Great’, Jim Collins talks about The Stockdale Paradox, named after the United States vice-admiral and aviator who spent 7 years as a prisoner of war in North Vietnam. When asked who didn’t make it out of captivity, Stockdale said that it was the optimists. People who thought they would be out by Christmas became more disappointed when they weren’t, and as it went on and on, they were more and more crushed by the experience.
Stockdale’s experience taught him that you do have to have unshakable faith that you will get through it in the end, but you also must confront the brutal facts of your current existence.
Hedge fund teams that are struggling with the remote working experience need to consciously address the issue. The first step is to talk about it within the team. Conversations need to take place about how everyone is doing. What are their fears? What is preventing them from succeeding? How can you help each other deal with things?
Once your teams know where they are and what’s going on, they need to consciously and intentionally design how they are going to work remotely. This is not only about the nuts and bolts like when it is OK or not to have the camera on, when do we do meetings, how long are they and what is the content or agenda of the meeting, but hedge fund firms also have to design ways of still doing all of the unplanned and unspoken things that contributed to the team’s relationships, engagement and culture before COVID-19 came along. Now, you have to make time to do these things that previously happened organically.
Great teams are ones that succeed because they proactively and consciously do things in support of their relationships, morale, engagement and culture rather than leaving it to chance. This was true before COVID-19 and is even more true now that the ways that teams were built unintentionally and organically are not as common or are missing completely now. Teams need to focus time and energy to create new rituals and rhythms in these remote working times in support of their teamwork. Things like spending some meeting time not talking about work but instead, building relationships and getting to know how each other is doing, helping each other out and solving problems – work related or otherwise.
This is especially important if your fund has been growing since the pandemic started, as some have, and you have added more personnel to your team. While growth it good, new hires need to feel involved and part of the culture. A common complaint among new starters in hedge funds since March has been the lack of opportunity to ‘be in the office’ to interact with new colleagues. It can be very daunting.
No one asked for COVID-19; it has been forced upon everyone. Many teams have been damaged and hurt by the experience, and they are finding it hard to get out of the fog that has settled upon them. But there’s a level of comfort knowing that we’re all in this together, and it is togetherness that will get us through it.
Andy Fieldhouse is Team Coach and Founder of The Team Space.
© The Sortino Group Ltd
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