A leadership style based on trust
John W. Rogers Jr. started Ariel Investments LLC in 1983, when he was 24. The firm, which specializes…
John W. Rogers Jr. started Ariel Investments LLC in 1983, when he was 24. The firm, which specializes in value investing, now oversees $4.6 billion in assets and has 76 employees.
Mr. Rogers serves as Ariel’s chairman, chief executive and chief investment officer. He also is a board member of Exelon Corp. and McDonald’s Corp., and serves as a trustee of the University of Chicago and as chairman of the University of Chicago Laboratory School.
FG: Is leadership an innate skill or can it be learned?
JR: I think it’s probably a combination of both. For me, some of it came from watching my parents and seeing their leadership skills. But I think I also learned a lot about leadership from the coaches I was around, particularly [Hall of Fame basketball coach] Pete Carril at Princeton. I learned a lot about how leaders have to think about their teammates first, not themselves.
FG: How would you characterize your own leadership style?
JR: I’d say it is a trusting style. I don’t like to have a lot of arbitrary rules. I’m not going to be watching the clock to see when people come and go. [My thinking is] “I believe in you and trust that you’re going to do the right things for our customers.” Trust is a really big deal.
FG: What is the role of a leader in an organization?
JR: A leader is the person who is the keeper of the culture. A leader is there to remind people of what’s important, what are the two or three most important, key themes that they need to be thinking about all the time.
FG: What kind of culture are you trying to foster here at Ariel?
JR: Well, like I said earlier, it’s a very trusting culture. We don’t have a lot of egos or drama. Hopefully it’s a very relaxed, low-key place.
FG: How is that conveyed through the design of your offices here?
JR: As you can see, we have all open windows here. As you walk through the offices, everybody can see everybody. We have no closed offices or locked doors. I want this place to be open. To me, it’s very important that people feel free to wander in and out. To me, that’s a big deal.
FG: Tell me about how you recruit leaders to the firm.
JR: Good hiring is always a work in progress. We do a fair amount of recruiting from the University of Chicago. We try to let the teachers and professors there know that Ariel is a welcoming place and that if a student is interested in investing, especially value investing, that they should come and interview. We also rely on interns. We think it’s important to test people out during summer internships.
FG: So, what qualities do you look for in a potential hire?
JR: I look for people who I think are going to be good teammates. I look for people for whom it’s not all about them. I look for people who aren’t always trying to dominate the conversation or show everyone around them who is the boss. I am also trying to get people who think independently.
FG: What do you mean by that?
JR: I am talking about people who just kind of naturally gravitate toward the lone perspective. I think it’s important to find people who don’t necessarily follow the crowd.
FG: How do you decipher whether someone is an independent thinker or just trying to draw attention by being contrarian?
JR: You can figure that out by listening for the conviction of their point of view and the reasoning behind it. You just have to listen carefully.
FG: On a scale of 1 to 5, how would you rate yourself as a listener?
JR: I think I am a very good listener. I’m not perfect, but I am probably a 5 most of the time. If I am feeling rushed or impatient, I probably slip to a 4.
FG: What other leadership skills have you developed over the years?
JR: I think I’m very good at what my father taught me to do, which is living up to the commitments I make to others.
FG: Talk about that.
JR: I think living up to commitments is a critical part of being a leader, especially a business leader. That’s because so few people actually do it. People make promises to each other all the time. They say they’re going to deliver this report or offer you this kind of bonus or promotion if you accomplish something down the road. Then, they find excuses not do it. Well, if I say I’m going to do something, I do my best to do it, and I don’t accept excuses from myself not to do it. Again, that’s part of looking out for your teammates.
FG: Where do you think you fall short as a leader?
JR: I think my teammates here would say that I am probably not direct enough when I am unhappy about something. Sometimes I can be a little less than direct. The other thing is that I can be impatient at times.
FG: How do you encourage your employees to deal with conflict?
JR: I try to remind people that it’s not about winning the conflict. You don’t always have to draw the line in the sand and say, “If you step over it, you know I’m going to do X and Y.” A lot of times, it’s OK to keep those lines kind of blurry.
FG: In cases where a conflict cannot be resolved, are you the tiebreaker?
JR: That happens very rarely. I mean, we do try to hopefully get to a place where people can make their own decisions and come to a consensus on their own. But, yes, there are times when I have to make a decision or judgment based on some core value that the firm stands for.
FG: Tell me about a time when you have faced real adversity in your career.
JR: Well, our style was out of favor two times over the past 29 years. While we always knew that our stocks were going to come back, it’s painful when people you thought believed in you call and say they don’t want to work with you any longer.
FG: How do you handle that?
JR: All you can do, really, is work — work harder than ever. You may think you can’t work harder, but you have to. You look to see if there’s something that we can learn from whatever concerns people expressed. There are always things you can do better.
FG: Tell me about someone who really influenced your life.
JR: My father was one of the Tuskegee Airmen (a group of African-American fighter pilots in World War II), so he was a very tough guy. He really came up the hard way. Both his parents had passed away by the time he was 12. He lost two sisters in high school to tuberculosis, and he lived with a kindly uncle as he worked his way through teachers’ college. He was someone who really drilled into me the importance of always telling the truth, always living up to commitments. He also taught me that there was no substitute for working hard. He worked seven days a week, even holidays.
FG: And your mother?
JR: She was a pioneer and an extraordinary woman who poured everything into me. She really made me feel that everything was possible. She was the first African-American woman to graduate from the University of Chicago Law School.
FG: Sounds like both your parents set some very high standards to live up to.
JR: Well, that’s true. But they were both down to earth and didn’t make like I was too special or that they were too special. So even though they were both very successful, it never felt like a burden to me.
FG: What did you learn from Coach Carril?
JR: Well, besides pounding home to me the importance of teamwork, he commanded precision to a level that was way beyond the normal boundaries of demanding excellence. If you threw a pass and it was six inches too low, he would stop practice and be very rough on you about your lack of attention to detail.
FG: There have been a lot of strong leadership role models in your life. Is that coincidence, or did you set out to find these people?
JR: You know, I’ve wondered about that. I wonder whether I went to play for Pete Carril because he had some similarities to my father. I wonder whether Coach Carril’s independent thinking, his willingness to teach basketball in an entirely different way than everyone else, was similar to the independent thinking of the University of Chicago that I talked about earlier.
FG: If your daughter were here, what do you think she might say if I said, “Tell me about your father — not the business executive, but the father.”
JR: She would probably say something about the fact that I always do what I say I’m going to do. She really appreciates that about me.
FG: Anything else?
JR: I think she also appreciates the fact that I have developed some really deep and long-lasting relationships and friendships over the course of my life. It’s kind of a neat thing. My daughter and I actually have fun together … We have a friendship, and I think she appreciates the fact that I have so much faith and trust in her.
FG: Would your colleagues here describe you as demanding?
JR: I think I am more demanding of some than of others. For example, I am very demanding of Mellody [Hobson, Ariel’s president]. She’s the No. 2 person here, and she’s been here 21 years. We have that kind of relationship where I can just be very, very demanding because she has such a huge and important role here. I really count on her to make sure the excellence is there and that whatever we do — whether it involves clients, the legal department, technology or new-business development — I want us to be the best. I can be honest with her when I’m disappointed.
FG: It sounds tough to be your No. 2
JR: The No. 2 person is so important to any leader. You really need to find somebody who has your back all the time.
FG: How do you encourage people to push back, to tell you when one of your ideas stinks?
JR: I keep reminding them that it’s very important for everyone to always say what they think. In our weekly performance management meetings, for example, I’ll go around the table and solicit everyone’s opinion. At the end of the day, after I’ve heard everything, I might make a decision that someone doesn’t like, but it’s so important that the other point of view gets out there.
FG: You are known for working seven days a week. Why?
JR: It’s just what I do. Frankly, there’s just so much to read. I get up Saturday mornings and I read the daily newspapers. Then I come into the office to read research reports and, sometimes, the monthly periodicals. I use the weekend to catch up with stuff I didn’t get off my desk during the week.
FG: You can really be found at your desk most weekends?
JR: I tell my people that if they want to talk, the weekends are the time to do it.
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