Moneyball Human Resources Strategy

Ashby Monk

I just left the Rotman ICPM / World Bank conference, and it was a remarkable three days of learning and networking. I give all credit to the organizers for putting on an enjoyable event. And thanks for including me.

Anyway, one discussion I found particularly interesting was on how sovereign and pension funds can attract senior managers and executives into public sector jobs in remote locations (i.e., frontier finance 101). In short, the 100+ pension and sovereign executives in the room (with a handful of us academics) set out to describe the ideal type of individual to fill senior roles at these plans.

As one person in the room commented, we were basically asked to find a “Moneyball” solution for the pension industry (i.e., find the talent the funds required to be successful with severe constraints).

Anyway, here is, generically, what we came up with. A budget-constrained fund on the frontier should look for…

  • A person with a common identity or affinity with the organization (i.e., the candidate is from the same town or country).
  • A person that has already achieved success (e.g., a banker or financier from London or New York that has made his or her share of money and is now keen to return home and “give back” to his or her community).
  • An individual with a diversity of experiences in a variety of asset classes.
  • A strategic thinker that can assess, for example, whether to invest in-house or through external managers.
  • A person that is motivated by mission driven investing.
  • A person looking for a certain type of lifestyle, as the fund on the frontier can offer a way of life not possible in London or New York.
  • Someone not (entirely) motivated by money — In fact, funds may want to keep wages at the median to weed people out who will use the pension as a launch pad to make more money in the private sector.
  • A person that has experience with failure.
  • A person that has confidence but no ego.

Anyway, that was our (15 minute) attempt at Moneyballing the pension industry. If that describes you, then you may have just found your new calling!

2 Responses to “Moneyball Human Resources Strategy”

  1. 1 Marc October 19, 2011 at 2:48 pm

    Ashby – while I believe all the factors you have identified above are key to attracting and retaining talent to non-traditional locations, it is a slight misreading of the ideas espoused in Moneyball. While the Oakland A’s were operating under severe financial constraints, they countered that by utilizing non-traditional metrics to identify undervalued talent (thereby manufacturing wins). What the ideas above advocate is finding the same talent that everyone else is trying to attract, but is differentiated by their willingness to take a pay cut to be in a certain location/give back/etc. It seems to me that while those ideals certainly describe an ideal candidate, it doesn’t really address the issue of attracting talent to remote locations (at some point, it’s a numbers game – there will never be more than five people who want to go home to North Dakota*, the odds of one of those five being a successful senior manager strikes me as incredibly slim).

    A better Moneyball analogy would be to examine the underlying factors that contribute to successful pension management – say, and this is entirely hypothetical, great mid-level auditors. Since there are a lot more mid-level auditors running around than there are senior managers (and their contributions to the success of the fund are undervalued compared to the senior managers), it would be a much easier (and cheaper) plan to attract those individuals.

    Since the fundamental challenge is attracting people to a place they don’t necessarily want to be, for less money, you have to find the people who are undervalued by the market who you CAN compete on salary for, not rely upon goodwill.

    *Perhaps a slight exaggeration. Though the state did suffer a net loss in intrastate migration between 2005-2007.

    • 2 Ashby Monk October 19, 2011 at 2:54 pm

      Wonderful comment, Marc. Spot on. And, to give my fellow conference attendees more credit than I deserve, some did mention something along those lines — looking into the community of professionals for people that might make more sense. Actually, along these lines, see my post hiring project managers. Thanks for your thoughts (and clarifications). Cheers, Ashby

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This website is a project of Professor Gordon L. Clark and Dr. Ashby Monk of the School of Geography and the Environment at the University of Oxford. Their research on sovereign wealth funds is funded by the Leverhulme Trust and The Rotman International Centre for Pension Management.

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