Behind every successful business there’s a great CEO. These CEOs know that the secret to success lies beyond physical or financial resources. Their best-kept secret is how they work with their teams.
To understand how different management styles affect my clients’ portfolios, I discussed this issue with Liz Wiseman, author of Multipliers: How the Best Leaders Make Everyone Smarter, on my radio show, Goldstein on Gelt. She explained that multipliers are defined as leaders who “amplify the intelligence of the people around them.” She told me that the best kinds of leaders are the ones who encourage other people to figure things out for themselves. Contrast that to “diminishers,” who hoard resources and work on the assumption that no one can do anything without them or their superior intelligence.
As any office worker can tell you, working with a diminisher can make you feel incapable and hamper your performance, whereas a multiplier can raise your morale and encourage you to reach your potential. In fact, Wiseman told me that after much research, she discovered that diminisher leaders manage to use 48% of the potential productivity of the people around them, while multipliers utilize 95% of their workers’ capabilities. (To learn more about measuring potential, download the podcast of the interview.)
How does a great CEO help my bottom line?
This concept of team management and multipliers can be applied to the financial world. When researching a company to invest in, consider its leadership, as management styles influence productivity. And, if you are searching for a financial adviser, don’t look for a “diminisher,” someone who want to take everything out of your hands. The best kind of adviser may be the one who seeks your input, and asks you the right kinds of questions to help you reach your own fiscal decisions. Rather than imposing opinions on you, a “multiplier” will work with you as a team to find out what really is best for you.
Using a “multiplier” to oversee the companies you invest in, as well as a financial adviser, may be the best move you can make in order to maximize your profits. Before you make any financial decisions, consider the strategies of successful CEOs and choose to become a multiplier.
(The opinions expressed on the Goldstein on Gelt show are those of the guest, and not necessarily my opinion or the opinion of Portfolio Resources Groups, Inc.)
Douglas Goldstein, CFP®, is the Director of Profile Investment Service, Ltd., which specializes in helping people who live in Israel with their US dollar assets and American investment and retirement accounts. He helps olim meet their financial goals through asset allocation, financial planning, and using money managers.
Published October 28, 2012.