SAC Capital psychologist in-residence Ari Kiev has a new book out. In Hedge Fund Leadership, Kiev shares the tools all leaders must line their arsenal with in order to inspire peak performance in their traders and money managers. It’s based on the principles he’s put into practice up in Stamford, which have made what started out as a 2-bit boiler room into the powerhouse fund it is today.
Tool #1: I tell all my patients that pecs are good but breasts are twice as nice. Having taken the Hippocratic Oath, I cannot in good faith write prescriptions for estrogen without meeting with you or your employees first, but I can tell you that there are ways to get around this. Many of my patients have done so.
Tool #2: Traders are like children and dogs. Reward them when they do something good and they’ll make every effort to do something good again, such as make you money. The actual treat is up to you, I just like to tell people to tailor it to their personalities. One of my more notable patients likes to give out deep fried Oreos when his people execute profitable trades. They seem to enjoy it (probably because he has a fryer in his office, so they come out piping hot).
Tool #3: Let your dysfunction work for you. If you were born paranoid as shit, instead of shying away from it, embrace your psychological disorder. Turn your fortress mentality into a sport, and demand that your employees follow suit. For instance, one patient of mine has built a ‘funnel cake tower’ that surrounds his desk. He encourages others to do so as well, with the proviso that he is allowed to ‘lay siege’ to the fortresses at his will.
Tool #4: Nicknames. I find these are a great way to foster camaraderie, not unlike like the kind of camaraderie you’d find in a fraternity house or on an ante-bellum slave plantation. If you run a company whose size renders individual nicknames impossible, you can modify this tool to work for you. One patient who’s made me a wealthy man many times over working through his cornucopia of neuroses manages a firm with over 800 employees. Therefore, everyone is referred to by the same moniker: Shemale. It’s a little less personal, but I find it still gets the job done.
Tool #5: Crank up the energy level in your organization. Some managers like to use amphetamines, other methamphetamines. One favorite patient of mine uses what he calls a “holistic approach” to energizing the troops. Apparently it boils down to an hourly injection of high-fructose corn syrup. As a doctor, I find this somewhat unhealthy, but he says it gets results like no other. Said this patient: “Outsiders think in-depth research/a top-notch ability to get information first is our edge, but, really, high-fructose corn syrup is the engine that drives this firm.”
Tool #6: Hire the right people for the job. Don’t focus on pedigree or training; they can come from anywhere. One patient who’s spent a lot of time on my couch hired the actor Gary Busey after meeting him at a holiday party, which Gary was catering. GB now heads up one of this patient’s most profitable portfolios.
The Hedge Fund Edge [Forbes]