Future cash flows at investible companies are enhanced by things that don’t show up on a balance sheet, such as culture, brand, and leadership. Here’s how to identify them.

Video Transcript

Mike: I’m Mike Corcoran with Institutional Investor. We are joined again with Ken McAtamney. Ken is a partner and the head of the Global Equity Team and a portfolio manager for William Blair’s International Growth, Global Leaders, International Leaders, and Emerging Market Leaders Strategies. Ken has been telling us about how what a creative process it is, how important it is to have all the team members work together. Ken, just curious, how do you bring a discipline around the creativity and innovation that’s needed to succeed as a team?

Ken: First of all, having a very engaged collaborative socialized investment process, I think where we can share ideas with each other. That’s critical. Second is actually having those talented creative thinkers, and those great open minds, and the growth mindset that we’ve talked about. Third is actually to encourage prudent risk taking.

If we have all those elements that I mentioned, you want to have a process that can incorporate all of that. One thing that we’ve done is we’ve added a number of what I would consider workflow, group workflow sprints.

What that is, essentially, is we’re trying to solve a problem that we think could really be leverageable in our investment process. I think about the rise of importance of intangible assets in helping a company generate future cash flows. Tangible assets, things that you can count, quite easy to do from a financial standpoint. The intangibles—culture, brand, leadership, innovation—much harder to actually incorporate, but there should be a discipline around that.

So we actually will frame that problem, but it won’t be up to me to solve the problem. I’ll collect the group of individuals from the team, different levels of responsibility, different levels of seniority, and bring them together and task them to be thoughtful about that problem at hand. For several weeks, they will collaborate, they’ll do their own independent research, and they’ll come back to our leadership team with an answer, or a proposal, or a framework or something like that.

That does several things. First of all, it hopefully gives us an answer, at least advances our thinking in something that’s important to us, and leverageable across our investment applications.

But also, it gives it a great deal of agency to various members of our team that they’re not just responsible for whatever small job they have in the box that they’re in, but they’re committed to making us better. Making all of us better.

I think the sense of ownership, the sense of satisfaction that they get from solving big problems for us, really frankly gets them more invested and aligned with the bigger objective that we’re always working on, which are great investment results for our clients.

Mike: If you haven’t seen the earlier parts of this conversation, I encourage you to click on the links and make sure that you see the whole conversation with Ken. Ken, thanks so much for joining us.

Ken: Thank you, Mike