Thursday 6 September 2018 11:57 amCFA Institute Talk

The power of appreciation

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These are articles written by professionals for investment professionals. They are contributions from external subject matter experts who do not work for CFA Institute, but may be a CFA charterholder as well as a member of a CFA Society. All are experts in their field and strive to deliver useful insights that help investment professionals make better decisions.

Appreciation is a greatly under-utilised tool in the leader’s toolkit. The simple act of appreciating your staff will pay huge dividends. Appreciation can simply be the act of paying close attention to someone. Appreciation means the full awareness or understanding of something. So, you could practice appreciation by simply asking a staff member how their work is coming along. And then — this is the key — paying close attention to their response. The skill of “active listening” — paying very close attention to someone — is based on appreciation. And active listening can take a grand total of 30 seconds. It requires no artificial flattery. Just give your people full attention. Simple.

Other ways to show appreciation?

  1. Words of Praise: You could say, “That was a great meeting. The way you framed the meeting at the outset was excellent, and the way you fielded their questions — especially the one on performance — was great.” Of course, words of praise must be sincere, and specific.
  2. Acts of Service: After a colleague hosts a great client meeting, you could say, “That was a great meeting, let me take care of the follow-up to show you how much I value your work.”
  3. Gifts: Using the same example, you could say, “That was a great meeting, let me buy lunch to show you how much I value your work.”

Appreciation is a powerful cultural tool for positive change. As investment professionals, we’ve all been deeply immersed in the “problem-solving” paradigm. We are good at analysing situations, and then extracting the problems. But there is another, more effective approach. It is called “Appreciative Inquiry” and has been researched and practised for several decades. And it works.

The big differentiator is the focus of attention. Traditional problem-solving homes in on the defects, on what’s wrong. Appreciative inquiry focuses on the successes, on what’s right.

As logical as it sounds — to focus on the positive — we experience great resistance from investment teams because they are SO conditioned to solve problems.

Let’s be clear: If you want to fix a flat tyre, you focus on the flat tyre and find a new, functional tyre to replace it. the mistake comes when you treat people — or teams — as machines or parts of machines, as the tyres, for example.

So, use a different approach: the appreciative one. Instead of dragging in the “elephants” and slaying them one by one, work with the appreciative approach: What’s working? What successes has the team/company experienced? What are you most proud of?

So, if the appreciative approach is so much more effective than traditional problem solving, why isn’t it used more often? One explanation is that traditional problem solving makes us look more intelligent. And don’t we love to look smart!

Studies in this regard are telling. A researcher asked a control group to read Broadway theatre reviews. Critical reviews were considered “clever” while complimentary reviews — “your family will love this show . . . It is a really feel-good experience” — were put in the not-so-clever pile.

Here’s the catch: All the reviews were written by the same person! We look more intelligent when we are being critical.

We also resist the appreciative approach to change because it smacks of “polyanna-ish” thinking. How can we solve the hard issues, when we are simply rolling around in this positive fluff? Don’t ignore tough issues; acknowledge them and resolve them.

Further, don’t confuse this approach to improving team dynamics with the critical thinking that helps with investment decisions. That sort of critical thinking is vital in the analysis of investment decisions. The trick is to turn off that critical thinking when you move to interpersonal issues. You won’t help a team perform better by criticising them. And you won’t help an individual raise their game by dwelling on their flaws.

Try it. You’ll like it.

If you liked this post, don’t forget to subscribe to the Enterprising Investor. This blog post was written by Jim Ware, CFA

All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.