You Missed
You get your feet in position, lightly rock back and forth, adjust your grip, lock your elbow. Your form feels good, so you swing… and miss. The golf ball still sitting unbothered on the tee between your feet. What’s terrific about this situation is feedback… immediate feedback. (I still get this exact form of feedback when I play golf).
In this regard, the world of sports is unlike some businesses where you may not know if you have a viable product or what your cost of goods is for a long time. Think the development of new drugs or the sale of asbestos insurance. Stephen curry knows he did something wrong on a 3-point shot and needs to make an adjustment about 2 seconds after releasing the ball, whereas a production studio can’t know for sure if their movie is a dud until lots of money has been spent.
Thoughtful, critical feedback is an expensive and valuable gift. Expensive because it can cost its giver a relationship, valuable because it’s rare. To withhold giving thoughtful criticism is selfish but understandable. To dismiss receiving it is understandable but indefensible.
Some investing forms, including ours, can have long feedback loops. You determine the future value of an asset that has many inputs, some of which don’t materialize for years. Recognizing the value of feedback received as early as possible we set up mechanisms to capture it and tie that information to the original decisions and thinking that created it so as to be able to make timely adjustments. In our context we create internal variance reporting to catch specific income or expense items that differ, whether good or bad, from the original plan and then start down the road of answering why. We track so called “box scores” of the marketing efforts of apartments. We track the achieved premiums from different versions of an interior renovation. We follow utility consumption against expected levels. We discuss internally how effective our different communication styles are in different situations. Feedback is a loving spouse to the serious competitor.
When the outcomes matter, to not mine areas of potential feedback, even the kinds that are arduous to unearth, is unwise. To ignore credible feedback that is freely offered up to you is a form of tragedy. I’ll guess that football teams that spend time reviewing recordings of their plays perform better, on average, than those who don’t. I’m also pretty confident that investment firms that value feedback perform better than those who don’t, particularly when a macro tailwind stops blowing.
Partnering with you in Excellence.
