If You Think Worst Is Over, Take Benjamin Graham's Advice, the offering in Jason Zweig's Intelligent Investor column in The Wall Street Journal print edition of May 23, provides some thoughtful guidelines to managing an investment portfolio in uncertain times. Interestingly, and perhaps inadvertently, the same guidelines hold for managing a leadership portfolio in all times. And truthfully, what times aren't uncertain? In today's economic upheaval we are simply more aware of the same uncertainty that exists in "good times." So read this with an expansive mind, with an eye to leading health care organizations today....and tomorrow.
From Here to Eternity
Zweig's column chronicles the lessons of Benjamin Graham, the "father of value investing" and both the teacher and later investment mentor of the legendary, Warren Buffett. Graham's acumen in predicting markets emanated from his ability to simultaneously maintain immersion in the moment and sufficient detachment to maintain perspective on the broader environment:
Mr. Graham's last wife described him as "humane, but not human"... His knack for inverting emotions helped him see when markets had run to extremes"... Mr. Graham's immersion in literature, mathematics and philosophy, he once remarked, helped him view the markets "from the standpoint of eternity, rather than day-to-day."
Isn't the same true of health care leadership? The distinction between management and leadership lying in the ability to toggle between the moment and the long run - or as Graham put it, eternity. In order to be successful, health care leaders today must be able to both appreciate and act upon the intricate and immediate consequences of events and situations (be they sentinel events, negotiations with payors or providers, ethical lapses, or budget crises) and simultaneously stand at a distance - studying context and possibility - and make decisions that are not only viable in the present but durable and strategic for the future.
To do so, similarly to Graham, they must maintain an appreciation of things beyond health care operations - philosophy, ethics, politics, social issues, human behavior, statistics, probability, history, you name it.
Emotional Inversion
Graham was uncanny in his ability to predict markets and investment strategies. According to Zweig, Graham: "...almost invariably read the enthusiasm of others as a yellow caution light, and he took their misery as a sign of hope...His knack for inverting emotions helped him see when markets had run to extremes." By which, as I understand it, he means that Graham was able to make decisions that transcended conventional wisdom" and both the emotional and "rational" sense of the crowd.
Effective leaders must be sufficiently grounded that they do not see individual adverse events as crises while at the same time not missing crises that are evolving from apparently isolated and yet ominous events. In health care this is particularly tricky. To do what we do requires substantial emotional awareness to remain connected to our mission - yet leaders must maintain that awareness in partnership with sufficient detachment to avoid being swept into judgments or decisions that are primarily emotionally driven and not strategic.
Mission Intelligence
Zweig reports that Graham described the challenge required to obtain results from the investment strategy of dollar cost averaging - buying through thick and thin and selling at advantageous times only - as that of the "intelligent investor:"
Asked if dollar-cost averaging could ensure long-term success, Mr. Graham wrote in 1962: "Such a policy will pay off ultimately, regardless of when it is begun, provided that it is adhered to conscientiously and courageously under all intervening conditions." For that to be true, however, the dollar-cost averaging investor must "be a different sort of person from the rest of us ... not subject to the alternations of exhilaration and deep gloom that have accompanied the gyrations of the stock market for generations past."
In order for health care leaders to maintain integrity and achieve long term success, most decisions must also be made by adhering to immutable, mission based, guiding principles. It's hard, but not impossible, to be Graham's "intelligent investor" who sticks to investing principles despite the pressure to do otherwise. But it's that investor Graham is convinced will do well. His protégée, Warren Buffet, seems to have succeeded.
The "intelligent health care leader" may also be the one who maintains mission focus and integrity through both calm and tumultuous environments - at times with less than 100% support from his or her peers.
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