The Bond King + Bullying
I recently finished the Bond King by Mary Childs. This book was exceptionally fascinating, having been recently laid off from the investment industry.
Long Story Short
The book follows Bill Gross, the father of modern bond trading, as he rises to the top of the investment world. Childs puts Gross in an interesting light as this flawed character struggles through building and eventually being kicked out of PIMCO. While always presented as wanting to do right by his clients, the investors, this saga opens up the actual cost of getting that extra basis point for the investor. Gross' desire to be at the top inevitably leads his company down shady paths of manipulation, coercion, and potentially illegal activity.
Greed Rules the Day
The exploits that Childs uncovered showcase the culture that plagues so many companies, particularly those in the investment industry –– greed steers the ship. Whether you believe that Gross was simply trying to do the best for his clients or that it was an excuse when he was caught, the greed of wanting to squeeze out a tiny 10th of percent more – just to get a little bit more – seems to always end in inappropriate behavior.
Perhaps most shocking, as Gross increased his charitable giving in the last decade, he wrote in one of his letters an admission of sorts, essentially articulating that he had won big and which meant some people had lost big. He even seemed to feel bad about it. However, that realization didn't shift his attitude and erratic behavior as he finished his time at PIMCO.
In the end, it seemed he was clawing at what little he had left in the company he built, desperate to cling to any last bit of power and influence he held. However, eventually, the board worked toward pushing him out, which triggered him to jump ship.
A Bullying Enviorment at PIMCO
Putting the fascinating man behind the story aside, it was truly shocking how much bullying and coercion took place. Gross and his group relentlessly burned bridges with Wall Street, took advantage of the government bailout in 2008, and internally worked to control each other for "building a great company."
At the end of the book, Childs asks an important question: Was it the money that pushed Gross to do all these things? Or was it that he had this capacity, which allowed him to get all this money? Or, are we all like this, but you can't see it because we don't have the resources to make a show of it.
Ultimately, the author wants to know if we are capable of these things? It would seem the answer is "yes." I think anyone can put the company first. Everyone can decide to put others down to ensure they remain on top. However, this is a path that many choose not to take. Instead, many look to build great companies that people want to work for and want to stay working for. Many put profits second to treating others how they would like to be treated.
Many don't rely on bullying to get what they want.
Could PIMCO Reach Greatness Without Bullying
It could be easy to argue that PIMCO could not have achieved the heights it achieved without bullying others. If all other financial institutes are bullying each other, wouldn't a company lose if they didn't play the game?
The short answer is: probably.
Perhaps the more important question is not whether or not they would have been so profitable; maybe the real question is, how should a company define success? Is it clawing to the top of the profit charts taking advantage of everyone along the way? Is success that you are feared rather than loved?
Each company must decide what success looks like and what they will or won't compromise to get there. In the case of Gross, he ended his time at PIMCO as a divorcee, sued one of his sons, and burned most if not all relationships at the company he had built. Further, he created a toxic company culture – making it difficult for employees to find work in the industry after PIMCO because they were told to be ruthless with business partners.
Is that success?
Recently Musk Told Everyone They Had to Work In Office
On May 31, 2022, Elon Musk sent a letter to all employees.
According to Electrek, Musk's email states anyone who wishes to continue to work remotely must work in an office at least 40 hours weekly or "depart" Tesla.
Musk is perhaps the most recent billionaire king who refuses to see nuance to build his empire. There is no argument that Musk has accomplished phenomenal work through his different companies. Tesla is the symbol of electric cars, Space X: modern space travel, Boring Company: disruptive transit. However, at what costs? What is success to Musk?
Bullying ≠ Leadership
If a company needs to default to bullying, legal threats, defamation clauses, or the like to accomplish its mission, its culture is sour. Unfortunately, there are times when an employee may attempt to take advantage of a company, and therefore, the company must respond to protect itself and the other employees.
Protecting against fraud is not the same as systematic and commonplace bullying, which relies on the strategy for the company to accomplish its goals. If the company needs to bully its employees, competitors, or former employees, it will eventually burn through all of its bridges.
A More Sustainable Model is Human-Centric
To build a company that is life-changing, compelling to work for, and long-lasting, the business must focus on its most valuable resource – people. A company that can attract and retain top talent will go much further than a company using short-term tactics such as bullying. This strategy is human-centric. By putting the person first, the company invests and is ultimately banking on the employee producing great work.
Rather than bullying or even a neutral attitude, positive employee-centric tactics create loyalty which is a value that offers compounding returns over time. Even if that employee goes to work for another company, they will continue evangelizing for you if they genuinely had a positive experience. This culture creates a sustainable model over time, which matters if you care about the company you are building.
Un-bullying Is Really Generosity
Stop looking to the legal team to squeeze out every last moment of an employee's existence. Stop building a culture of fear and manipulation. Stop driving former employees away through tasteless tactics. Instead, consider taking an antithetical view of bullying – in other words, try making your company generous.
This strategy doesn't mean 20-hour work weeks or 60 days off a year. Instead, look to your competitors, find out how generous they are, and one-up them. Find the Bill Grosses of the world and refuse to use them as a lowest common denominator – "I just won't be as bad as Gross, then I will be fine." Instead, build a culture that knows your employees and their needs and believes that the generosity will pay back unforeseen dividends in the future.
It seems that both bullying and generosity have unknown future costs. Bullying may seem to help your bottom line today, but will inevitably catch up to you in the future. Likewise, generosity will affect your bottom line today, but perhaps the payoff in the future will be more than you could ever imagine.
The reality is there is no way to know if generosity will ultimately pay. Instead, you must decide today what success looks like. If it is to impact your closest circle of people positively, then fully committing to that ethos despite the potential of short-term gains is critical.
