Collaborative intelligence – part 1
Why you want to increase the CQ rather than the IQ of your investment team
At Lestrade Investment Liaison, we operate in world full of experts. I was deeply intrigued by reading an article explaining as to why hiring a team full of stars can be a pitfall on the road to success. A multiplicity of highly knowledgeable individuals may not contribute to achieving the team goals if experts do not coordinate how the team can work together efficiently (Woolley et al., 2008).
The reason is two-fold: 1) experts like to take over the process, and 2) experts are inclined to overrule other people’s opinions. In turn, other team members overestimate the quality of the expert’s input and do not speak out their own perspectives. As a result, the team eventually misses out on valuable data and information the non-experts might have shared in absence of experts (Reilly et al., 2002).
‘Collaborative Intelligence’ (denoted by CQ, like IQ) is the measure of to what extent a heterogeneous group of people is capable of finding intelligent solutions through collaboration and interaction. Hence, CQ might be moderate in a group of experts. However, CQ increases in presence of team members with strong interpersonal skills, who are capable of encouraging others to share their perspectives.
At Lestrade Investment Liaison, we have been focusing on development of CQ in teams at our clients for years. Yet, at first instance, most clients want to find out to what extent we are able to sift out and tackle the (quantitative) complexities encountered in our field. The quantitative aspects are familiar to our clients, hence they are more comfortable to have a conversation about these topics. Furthermore, we observe that discussing interpersonal skills and collaboration is often considered to be ‘soft’ and ‘weak’. The status quo in a team is often regarded as irreformable, i.e. a fact one has to deal with. In our opinion however, aspects like intelligence, knowledge, and experience are more likely to reach steady states at some point of time in the careers of professionals. We suggest that the key to future success might be found in further development of communication and collaboration skills.
“a Liaison is a facilitator of communication and collaboration in teams & organizations”
Based on our experiences with many different investment teams at (institutional) asset managers, pension funds, and insurance companies, we believe that 1) the best performing teams consciously discuss and improve the collaboration process, and 2) too many experts in one team can be an obstacle for efficient collaboration. Following this believe, as coaching consultants we focus on communication and collaboration in the investment process of institutional asset managers, in addition to our content-related expertise in investment operations.
Is outsourcing of asset management (to foreign parties) by definition bad then? The answer to this is no, but it does bring a different dynamic for asset owners and a different set of skills. There are relationships (RuM) that must be managed. Outsourcing to (foreign) asset managers not only increases the importance of ODD, but also the importance of focusing on the objective of ODD activities. From our point of view, for example, ODD can be a means for:
In the coming months, we will address different methods to contribute to the CQ of your team through a series of articles.
- Woolley et al. (2008). Bringing in the Experts: How Team Composition and Collaborative Planning Jointly Shape Analytic Effectiveness. Small Group Research 2008; 39; 352.
- Reilly et al. (2002). The role of personality in new product development team performance. Journal of engineering and technology management. 2002; 19; 39-58.
- LaFasto and Carlson (2001). When teams work best.
- Joyce (2007). Teaching an Anthill to fetch; developing collaborative intelligence at work.