The Power of Teams
Why investment is an industry obsessed with individuals — and why the evidence suggests that the best outcomes come from genuine collaboration, not star culture.
An industry of individuals
The investment industry is built around individuals. Star fund managers have their names on the door, their faces on the marketing, and their track records treated as the product. When performance is good, the narrative is about one person’s genius. When performance is bad, the narrative is about one person’s failure. Teams, when they exist at all, are often treated as support structures for the star — not as the unit that produces the output.
This is at odds with what we know about complex decision-making in other high-stakes domains. In medicine, aviation, military operations, and software engineering, the evidence consistently shows that well-functioning teams outperform talented individuals. Not because teams are smarter, but because they are better at catching errors, integrating diverse information, and sustaining performance under pressure.
The investment industry’s obsession with the individual is a structural weakness. A team that genuinely collaborates — that challenges, supports, and learns together — is one of the most undervalued competitive advantages available.
What makes a good team work
Research on team performance — from Google’s Project Aristotle to Amy Edmondson’s work on psychological safety — points to a consistent set of characteristics:
- •Psychological safety: people can raise concerns, challenge ideas, and admit mistakes without fear of punishment. This is the single strongest predictor of team effectiveness.
- •Healthy conflict resolution: disagreement is expected and welcomed, but there is a shared mechanism for resolving it. Conflicts are addressed openly, not left to fester in private conversations.
- •Diversity of thought: the team actively seeks and values different perspectives — not just demographic diversity, but cognitive diversity. People with different mental models, backgrounds, and approaches are genuinely listened to.
- •Incentive alignment: the team is rewarded as a unit, not as a collection of competing individuals. When incentives are individually aligned, collaboration is the first casualty.
- •Leadership cohesion: the leaders of the team are aligned on direction, values, and culture. When leadership fractures, the team fractures with it.
- •Collective identity: people see themselves as part of a team, not as individuals who happen to share a desk. There is pride in the group, not just in personal performance.
When these conditions are met, teams produce something greater than the sum of their parts. When they are absent, even talented groups underperform — and the failure mode is predictable.
Inverting the problem: how to destroy a team
Charlie Munger was fond of saying “invert, always invert.” Instead of asking what makes a great team, ask the opposite: if you wanted to guarantee a team would fail, what would you do? The answers are instructive — and uncomfortably recognisable.
Split the leadership
Ensure the people at the top disagree on fundamentals. Let their relationship deteriorate in private. Watch competing loyalties form below them and politics fill the vacuum where direction used to be.
Reward individuals, not the team
Structure incentives so that people are motivated to optimise for their own performance, their own profile, and their own compensation. Make sure everyone knows that the money comes from a shared pool, so that one person’s gain is another’s loss. The collective identity will evaporate.
Avoid confrontation
Fill the team with decent, intelligent people — then never give them a mechanism for resolving disagreements. Let meetings run long without conclusions. Let conflicts fester in private conversations. Penalise directness by treating it as poor interpersonal skills.
Define ‘valuable contribution’ narrowly
Build a hierarchy of believability around one skill set and underweight everything else. Ignore network building, lateral thinking, and different analytical frameworks. Ensure that some of the sharpest people in the room are not the most listened to.
Make the process sacred
Treat a strong process as untouchable doctrine rather than a living system. Set the bar for change so high that adaptation becomes impossible. Close off new ideas by demanding an unreasonable burden of proof before anything can be tried.
Give freedom without accountability
Let people choose what they work on, how they work, and how they behave — but never call out the behaviour that undermines the group. Confuse freedom with a lack of standards.
Let divisive issues fester
When an issue divides the team, avoid structured debate. Let people retreat into opposing camps. Allow the disagreement to erode mutual respect rather than using it as a catalyst for better thinking.
Encourage siloes
Replace collective decision-making with one-on-one conversations. Let selective disclosure become the norm. Allow smaller groups to form, each with their own information, their own narrative, and their own agenda.
If you recognise any of these in your own team, it is not too late — but it will be soon. None of these factors alone destroys a team. But they compound. And by the time the damage is visible to everyone, the best people have already started planning their exit.
What this looks like
The radar chart below maps team health across eight dimensions. Toggle between a healthy team — where the conditions for collaboration are present — and a failing team, where the behaviours above have taken hold. Notice which dimensions collapse first, and which hold longest.
Team health: peak vs. decline
Eight dimensions of team health, scored qualitatively. Toggle between the team at its peak and the same team in decline to see which dimensions collapsed — and which held.
The findings
Inverting the problem reveals clear principles. A team that wants to sustain high performance should:
- •Invest in conflict resolution before you need it. The team that cannot disagree openly will be destroyed by disagreements that go underground.
- •Widen the hierarchy of believability. If only one skill set is valued, you are leaving the most interesting contributions on the table — and losing the people who could make them.
- •Align incentives with the collective outcome. When people are rewarded as individuals in what should be a team endeavour, expect them to behave as individuals.
- •Treat process as a living system, not a sacred text. The best teams are disciplined and flexible — they know when to follow the playbook and when to rewrite it.
- •Protect leadership alignment above all else. When the leaders fracture, everything downstream fractures with them — and faster than anyone expects.
Key Takeaway