Doug Sieg, Part 2
Managing Partner of Lord, Abbett & Co.
You're not born being a leader, I just don't believe it. Leaders are made; they are forged in fire.
Summary
This week on “Leadership Matters,” Doug Sieg of Lord, Abbett & Co. makes his second appearance on the show, joining Alan once again to discuss his work at Lord Abbett, the challenges he’s faced as the head of the firm, and the leadership principles he’s developed over the course of his career.
Lord Abbett is no stranger to navigating challenging macroeconomic conditions — the firm was founded in 1929, just a few weeks after the stock market crash that initiated the Great Depression. In his conversation with Alan, Doug describes how the memory of that event is imprinted in the DNA of the organization. Doug emphasizes the importance remaining focused on the long-term and seizing the opportunities created during market downturns. As remote work and changing employee expectations revolutionize the modern workplace, he is also focused on investing in the firm’s young leaders. Building diverse teams that work as a cohesive unit is, in his view, the best way to ensure Lord Abbett is positioned for success well into the future.
Mentions & Resources in this Episode
Guest Bio
Doug Sieg is the Managing Partner of Lord, Abbett & Co. LLC and serves as President and Chief Executive Officer of the Lord Abbett Family of Funds. As the 10th Managing Partner in Lord Abbett’s history, Mr. Sieg is responsible for leading the firm. In this role, he oversees the firm’s efforts in drawing on the strength of its people, delivering relevant and superior investment strategies, cultivating meaningful relationships, and ensuring organizational stability.
During his 24-year career at Lord Abbett, Mr. Sieg has worked with virtually every area of the organization, including distribution, investments, human capital management, finance, digital, and corporate services. Prior to assuming his role as Managing Partner, he was in charge of client services, where he led a successful international expansion of the organization. He has worked in the financial services industry since 1992.
He earned a BS in business from The Pennsylvania State University and is on the board of Kent Place School, which has provided a superior education to young women from diverse backgrounds for more than 100 years.
Follow Doug Sieg on Linkedin.
Clips from this Episode
Episode Transcription
Alan Fleischmann
My guest today is an incredible executive, a dear friend, and a thoughtful leader who sits at the helm of one of the most venerable firms in the financial industry.
Doug Sieg is the managing partner of Lord, Abbett & Company — a private investment management firm with more than $210 billion in assets under management. Founded in 1929, it is one of the oldest money management firms in the United States and is consistently rated as one of the best to work for.
Doug is a remarkable leader and CEO who has guided Lord Abbett through some tumultuous times and macroeconomic conditions in our country and our economy. He has played a critical role in helping the firm expand its global footprint. Just this fall, the firm opened a new office in Singapore, and continues to expand its headcount to reach customers around the world.
Doug has joined us on the show once before, and we had such a great conversation about leadership. I'm especially thrilled to welcome him back today to dive deeper into his leadership philosophy, the remarkable work of Lord Abbett, and the advice he has to offer to leaders trying to strengthen their teams.
Doug, thank you so much for joining us again. Welcome back to “Leadership Matters.”
Doug Sieg
Thank you, Alan — great to see you.
Alan Fleischmann
Wonderful to be with you. Let's start with a brief introduction. For those who may not know or didn’t tune in the previous time, tell us a bit about Lord Abbett. I'm sure many listeners are familiar with the name Lord Abbett, but provide a bit of background about the firm and what makes it so special.
Doug Sieg
Sure, absolutely. And Happy New Year to everybody who's listening. And thank you for the kind introduction — I too enjoyed the last time we spent together.
If I had to say what differentiates Lord Abbett and what makes it a unique organization — and I'm a lover, as you I know you are, of history — it’s the first words ever spoken publicly by Lord Abbett, which are hanging in my office. It was Andy Lord and Leon Abbett, published in The Wall Street Journal in 1929.The Lord had a credo. And the first line said, “We believe an investment firm worthy of its name fosters a sound relationship between the house and the client.” I think that set the tone. I always say that leaders set the tone — it’s the first thing they do. And I think the tone was set on day one to do three things.
One, make sure the interests of our clients always come first. Second, the singular focus on the management of money. You see a lot of people complicating their businesses — changing them — when we simply manage money on behalf of other people. That's all we do. That's 100% of our time and focus. Every partner is active in the day-to-day management of the organization. And lastly, it really put the word “independence” in our vernacular, which I think is critical in the asset management industry.
And again, not saying it's better, but it's really important for us that independent thinking, independent focus, and independent structure are there. It allows for accountability of the owners on a day-to-day basis, and allows for incredible, incredible focus. And of the $210 billion that we manage, it is all focused around active management. It's all focused on teams collaborating and using risk to inform process. And it has a deep, deep belief in fundamental and data-driven research.
Alan Fleischmann
It's an amazing permanent touchstone. Amazing when you consider that it was founded literally right after the great economic crash in 1929. That's an amazing story. Talk about resilience, vision, and purpose. I don't think many firms were founded in that short period of time after the crash.
Doug Sieg
Yeah, it's pretty amazing. I was in the elevator the other day, and somebody said to me, “Wow, since you've taken over, there's been nothing but crisis.” And I didn't know quite how to take that. I laughed it off a little bit and said, “Well, if you went back to October/November of 1929, I guess we were born in a fiscal fire as an organization.”
It’s interesting to me that our biggest growth through the years has been in the toughest markets. And that's really a testament to our roots. It's the belief that money goes to where it's treated best. And while there are fads that happened in the industry — and you've seen that, whether it was the tech bubble in 2000, or the right before the global financial crisis in 2008 — people go back to the trusted organizations that they understand and that have deep roots. Being founded in 1929 had a big imprint on who we are as an organization and how we think as leaders and entrepreneurs.
Alan Fleischmann
Well, you've been at the helm for almost five years now. We’re going have to celebrate your fifth anniversary coming up this year. Has your firm changed? There have been uncertain times in the last several years, but I think you were built for these. I know you well, and you actually thrive during uncertainty, because it's when you really rally the troops. Has the culture of the firm changed over these last five years?
Doug Sieg
Sure, it's a great question. And you and I share a love of leadership. And I love to talk about leadership. We have 124 people leaders in the organization — and I remind them that the leader’s role really is to set the temperature in the room. If you want to set the temperature in the room to everybody competing against each other, maybe that's good for your business model — you can certainly do it. If you want to set the temperature in the room that people are going to collaborate — that they're going to push each other, think critically — you can do that as well. And the most important thing for a leader is to understand what you can and cannot do, and then react to the temperature in the room. It starts with critical thinking.
When I took over the organization, we certainly stood on an incredibly strong foundation. I have nine predecessors, as you mentioned: I'm the 10th Managing Partner. And the fact we're here and independent shows how good we were in the first 89 years of the organization.
But there were things that had to be contemporized, and I talked a lot to my predecessor about that. When you look at the organization, I felt it was important — given the complexity of our business, the competitive nature in our business — that we took a hard look at ourselves, and really thought that through with the partnership. We have 50 partners at Lord Abbett now. That number varies between 40 and 60 active partners sometimes. And I said to them on day one, “We have to ask ourselves, ‘why would people want to follow us?’” And we have to start with the vision of the organization. During the transition, I was able to sit down with every partner and ask them, “What do you think we need to do as an organization going forward?” A lot of them interestingly said things like, “I need a voice; we need to contemporize the organization.”
On day one, I was really playing back what they had said. I'm not a dictator — my job is to represent what the organization and the partnership needs to pass on to the next generation. We spent an enormous amount of time really, really thinking and talking about that. And I strongly felt that we needed to shift the dynamic. If you think about Wall Street 25 years ago, it was the time of the “Imperial CEO,” and there were a lot of comments like, “If they don't like it, they can leave.” We had to change that.
I asked a trusted right-hand person to come in and be our Chief Impact Officer to oversee human capital management and some other areas of the organization. And I said very specifically, “We need to be the best place to work in asset management, because we can't survive and thrive if our people like coming to work here — they have to absolutely love it.” They have to come here every day and believe this is the best place and understand this is a passion. They have to want to be part of the future at Lord Abbett.
And I recognize that isn't for everybody, and that's okay. But this business is hard; we need everybody moving in the same direction. So we needed to shift that dynamic from “if you don't like it, you can leave” to “our job, fundamentally, is to create an environment that allows people to operate with psychological safety and to bring their full selves every day.”
Investing money on behalf of others is a very difficult business. Active Management is a very difficult business. Let's not make it harder by having a tough culture. Let's make it easier by giving people what they need to make tough risk decisions. And I said, “We need to be the best place to work in asset management.” We've been on the best place to work in asset management list the last three years, which we're all very proud of — I think we were third or fourth this year. In a note to the firm, I said, “When I was growing up, nobody around my dinner table said, ‘Hey, let's go be fourth,’ right? They said, ‘Let's go be number one.’”
Our commitment is to make sure we're on the path to keep moving forward. And that's created a lot of change. That's moved us from a rules-based environment to more of a principles-based environment. I have a great benefit: I have one of the most highly educated workforces on the planet — highly motivated and working 24 hours a day. It's all about principles, not really rules, and they embraced that temperature change. People loved it. We put the suits away unless we're with clients and said, “Hey, let's come work; let's bring our best selves here. Let's think about flexible work. Let's think about free health care and implement it. Let's think about no working hours and implement it. Let's think about unlimited vacation; let's implement it.” And the team responded incredibly well to that.
Alan Fleischmann
What you were talking about is amazing. It's such a key part of the culture of Lord Abbett now. You’ve in essence democratized leadership. Traditional leadership is at the helm, facing top down. But as you described, you've made everyone understand that it's their role to step up. Each one of them is a leader as well, which has profound impact on a culture. Everyone feels that it’s no longer autocratic: it's democratized. It changes everything, which is so, so unusual, and obviously very impressive.
Since we had you on the show last time, the global economy has changed. We have some new challenges. We've obviously got a military crisis going on in Europe with Russia and Ukraine right now. There's inflation issues. Has that brought you more resolve? You went through the COVID crisis, which I would argue is hopefully a once-in-a-lifetime, intense crisis. And I saw how you rallied the troops, how you communicated — how you overcommunicated in a good way so that people didn’t feel isolated. The team wasn't in the office during that period, but it was as important as it ever had been to communicate. Do you feel that these challenges are equal to COVID? Or do you think that because we got through the pandemic, we can take on anything?
Doug Sieg
A couple things there. I think it's important for CEOs and leaders at every level of the organization to understand what a crisis is, and what a crisis isn't. And when you look at what a crisis is, COVID was a crisis. I hope I’m not leading anything when the next crisis comes, but if I am, we'll be able to identify it.
A crisis in my mind is when you look at 9/11. A crisis is when you look at the extended global financial crisis, which really did turn into a crisis. A crisis is COVID. When you think about a crisis, you have to remind people that there are some characteristics of a crisis that are really, really important to understand. And I told everybody — I think I mentioned this on the show last time — a crisis lasts longer than you think it's going to last. It hurts a little bit more than you think it will hurt. And it exposes weaknesses that you may not know you have.
You have to make sure that when you're in a crisis, you understand what your responsibility is as a leader. I say repeatedly, “A leader’s true responsibility is to give the team what they cannot give themselves.” And when you're in a crisis, many time the team cannot give themselves confidence, and resolve, and the ability to know it's going to be better when we're on the other side.
When we were out that first weekend in March 2020 — and I'm sure I'm no different than every other leader that was out there — we knew we weren’t coming back into the office. We were locked down and a lot of weird things were going on. What the team needed to hear, I believe, was, “Don't define yourself by this type of moment.”
We went into COVID at the maximum strength we'd ever had as a firm, and the biggest mistake we could have made was to think that we weren’t getting stronger. In reality, we were getting stronger. And we had to think about the other side. That's very, very different than a bear market. A bear market is an opportunity. A bear market is when excesses in the market get beaten out.
Now, I don't think anybody should have been too surprised that inflation kind of ran rampant. Last year, you saw the stimulus bills. I don't think people should have been surprised when Russia entered Ukraine. But suddenly, you had an energy crisis and things like that to start to happen that pushed up inflation. What did surprise everybody was the Fed’s stance that “this is transitory,” when I don't think it was. That said, the Fed has done a very, very good job hiking interest rates 400-425 basis points, getting out in front of it, and having the resolve to do what's needed. I do think our conversation is going to turn from inflation to recession: the question is going to be how deep and how long, or can they engineer a soft landing?
Everything I just said is not a crisis. It’s a buying opportunity. You're seeing fabulous technology stocks that are down 50, 60, 70 percent. You're seeing repricing in tech stocks, inflation in other areas. You're seeing things that were bubbles getting beaten out in crypto. That's a normal market environment. And there's a wise old investor I've always loved who says, “All the money's made in bear markets, you just don't know it at the time.”
And when you look at these bear markets, what our investors are really focused on — and why I'm so proud of them — is making sure they stay patient, understand what's happening, invest for the long term, and think about the long-term ramifications. I don't really know what's going to happen in the short term. Nobody does. But I do think that we're starting to feel bottom with the tech stocks. Some of the things that are happening feel like we're getting into a turn here, whether that's three months, six months, or nine months from now.
I bet we'll look back ten years from now and say, “This was a tremendous buying opportunity — not just in equities, but in fixed income.” We haven't seen interest rates this high in a long time. And that's exciting and a great opportunity for people out there. But it's very different. You have to make sure that you don't ever confuse a bear market with a crisis. Or you could turn that bear market into a crisis for your organization.
As a leader, those are critical elements.
Alan Fleischmann
You make such an important point, because you're right: every great fortune and every great company's best trajectory has happened in a bear market. It’s where the platforms were built, where new companies were started, and where other companies thrived. It's such an important point.
Going back to what you said about the talent pool, that message is obviously quite inspiring for your current employees to hear. And I imagine it puts you in a special position to grow and be well positioned in the future. It's not a pessimistic message: it’s quite a pragmatic and inspiring message.
Doug Sieg
Yeah. Unfortunately, we're in an industry where you can allow the ups and downs of the market to define your year. I've been doing this for 28 years, and I’m super fortunate. I've only had six down years in the S&P 500 as I've been in the industry. But I was just telling the team earlier — two weeks ago, right at the end of the year in a townhall — “don't assume down markets mean we didn't have a good year.” Yeah, earnings aren't going to be exactly where we want them to be. But in the long run, we're going to look back to the things we implemented. We're going to look back to the people we hired. We're going to look back to the process improvements we made. We're going to look back to the products that we launched. We're going to look back to the people that we added globally in private credit, equity, and fixed income. We're going to think about the work.
A year ago, I was saying that it's going to be a year of a grind — it's going to be just a lot of hard work. And you're not going to feel like you did a lot, because the market is going to be more difficult. And I wish it wouldn't have been that much of a grind. But I think that word was absolutely right.
Yet when you look at this year, it feels a lot more like all the hard work we put in is going to start to come to fruition — the execution, the ability to add alpha on portfolios, the ability to execute better on behalf of our clients. It feels like we started that turn. But I don't think anybody looking back would argue it didn’t feel a little frothy, when you saw the dotcom stocks running again, the meme stocks, and a lot of other things going on.
I think we did a good job of getting the organization to sense that it would be a harder year. That allowed us to have a better year than most. We'll see about this year. I feel optimistic, and I think our employee base does as well.
Alan Fleischmann
Well, you also have such an extraordinarily long view. It's almost as if we need to get through some of the pebble walkways to get to the clear path. And if you see where you're going, you can get through it, knowing that you’ll be there in the not-too-distant future. That gets to one of the things I've talked to you about before.
One of your goals when you took over at the helm of Lord Abbett was for the firm to be recognized as an outstanding workplace. This last year, you were once again named as one of Pension & Investments “Best Places to Work.” How did you go about executing that? I'm hearing the collaborative nature, the pragmatic vision…the inspiring vision. I’ve been to your office — I’ve been stunned when I come visit you. One day I sat outside your office and watched people walk in. Even as the pandemic was lifting, I came to visit, and I was stunned by the comments I was getting from people in the elevator who were just so thrilled to be back in the office. That’s something I have not seen among most other companies, even now. They were just so excited to be in person with each other. How did you get to do that? What are the things that you did to make this one of the best places to work?
Doug Sieg
Sure, I’ll credit Kristen Maple and her team — Brooke Fapohunda and others in human capital management — who just studied what makes great workplaces. And it's not a secret. Any leader can go out and find out; they have to think about what works for their business. You have to think about what maximizes productivity and work in your particular industry or area. It started with a piece of paper: “here are 20 things we could do to create a better environment for our workers.” And then you have to commit to implementing them.
I was at the firm for 25 years before I took over; it was a change for me as well. And there's these challenges — at dinner last night I wore a tie, and I hadn't had a tie on yet this year, and it felt kind of weird. But that's what people were starting to say: we were adapting.
And when you look at the benefits — free lunches, free health care, very basic ideas — it starts there. That's number one. You have to really get that. Second, I think you have to be able to define your culture. We defined our culture. I always hear in people in firms saying, “Our culture is incredible; our culture is differentiator.” And I say let's not talking about culture like it’s not really here…define it. We've defined ours very specifically: principles based. We favor principles over rules; people know what we need to do — just do your job, and we will be cool. Third is performance oriented. We live in a meritocracy; if you perform higher than others, you will achieve more at this organization. I am not afraid to say that to other people. If you're not achieving what you want to, let's go back and look at performance. That goes back to how we do reviews how we set goals for people — how we talk to people. And then fourth is purpose-driven. We manage money on behalf of others; it's not our money that we're managing. We have to understand that purpose and how critical it is for our people, our clients, and our world.
The foundation of all of those is leadership. On day one when we talked about the vision, our partners came back and said, “We want to be the most respected firm in asset management.” They didn't say, “We want to be the biggest.” They didn't say, “We want to be the most global.” They said, “We want to be the most respected.” And I remember looking at Jim Sansavero, who heads up communication here, and saying, “Alright, let's go. This is going to be great.” Because if they go and dream big — one of our principles is “dream big, work hard, have fun” — that is so critical. But if we're going to do that, we have to be better leaders. You're not born being a leader. I just don't believe it. Leaders are made. And they are forged in fire. Leaders come to sharpen steel, and you learn the little things every single day.
So I said that we’re going to have to be better leaders if we want to do this, because it's not going to be what I say from the mountain top. You're going to have to make better decisions. You're going to have to lead your team better. You're going to have to lead in a principles-based environment. It's very easy if you're the leader in a rules-based environment. If somebody says, “I have to go to the doctor today,” then you can say to him, “Well, that's a day off.” And they say, “Well, why is that a day off?” And I say, “That’s the rules. I didn't make the rules. He made the rules.” And that's not a good environment. If it's principles, you could say, “Yeah, you go do that. But let's make sure you have your job done, your team is covering it, and we're doing what needs to happen on behalf of the client.” That's a different environment.
We have to become better at leadership. We invested a lot in leadership. We invested in leadership development tools. We invested in an outside firm to come in and help us — the Leadership Institute from West Point came to teach leader intent…how to tell people what you want them to do and why you want them to do it, but to let them figure out the how. Let the leaders do the critical thinking of what they need to do in the organization. And they'll come back and they'll surprise you every day.
That’s what's been so exciting about the culture — that embracing of how important leadership is. I always say to people, “Leadership is a major responsibility.” People ask me all the time, “You have so much money under management; you have all these people. What keeps you up at night?” And that’s one thing. It’s 20 years from now when somebody comes up to me and says, “Man, I wish you would have pushed me harder. I really could have been something.” Because that's when you fail as a leader.
The most important thing as a leader is to understand the gravitas and importance of the role. You're not their friend. You're their leader, and they want to be told what to do and what they can do better. They want to be pushed; they want to be inspired. They want to know what the vision is — they want to know what your vision is — and that's a huge responsibility. I want to make sure every one of our leaders has the tools to allow them to do that.
And that defines that cultural element of “principles-based, performance-oriented, purpose-driven.” I get it. People say all the time, “But it's going to be a tough conversation.” I laugh and say, “That’s why they call it work, right? That's why you're the leader.” You have the responsibility. You have to go out and do it.
Alan Fleischmann
I love that — “that’s why it’s called work.”
Doug Sieg
Yeah, exactly.
Alan Fleischmann
I love that. When you talk about core mission, it's so different. A lot of other firms and companies will talk about core mission as a marketing team coming up with an idea and plastering it somewhere, and then you get to see it. With you, it feels like it's at the very core of the how the values align in the company. And it is true: when you walk the hallways at Lord Abbett, there’s a lot of inspirational signage up there. You're not going into some kind of HR booklet to find out where your values are and what you stand for as a company. You only have to walk down the halls and see it on the walls everywhere. The mission is alive; the vision is alive. And so are these very inspirational, values-driven quotes. Was that something that you added in when you became managing partner?
Doug Sieg
One of the things — when you talk about “principles-based, performance-oriented, purpose-driven” in today's environment of massive social media — is that people need to hear the message consistently and over time. We’re very deliberate and authentic in running the organization in a “principles-based, performance-oriented, purpose-driven” environment. We can do better for our clients that way.
And I go back to what I said at the beginning. As a leader, you have to decide the temperature you want to set in the room. There are businessmen — Vince Lombardi, Bobby Knight, think of some of the great leaders — who were disciplinarian. They were top-down people, and they had incredible success across the board. I would never disrespect that model; that just won't work in an environment where our investors come in every day. And if they get 55% of the decisions right, meaning 45% wrong, it's a home run. They're doing great on behalf of their clients. As a leader, you have to understand what will make your environment thrive. And if it was to be top-down, rules-oriented, we would do that. But I don't think that's going to motivate people to do the job that we need them to do.
Once you understand that as a leader, they can never hear it enough. You have to make sure you're allowing them to hear it — whether that's at annual meetings, at town halls, how you send emails out to the firm, how you engage everybody in the hallway, or how you talk in meetings, because everybody's going to look at you and what you hang on the wall. Put it on the wall — “these are the principles that we're going to focus on, and this is what it means to be a partner, or this is what our vision is as an organization.”
I remember that we said, “We're going to be the most respected asset management firm in the world.” I said to every partner, “That has to come out. You have to talk to people. What does that mean?” And I remember sitting with one of our partners now, Greg Sherman on the municipal bond team. I said to him, “How do you see cash?” It was early — about six o'clock in the morning — and I was trying to see how our operations and technology came together. He pulled up nine different ways to finally get to the number on how much cash there was to invest on behalf of the firm. I laughed at him, because it seemed like it took a long time. And it didn't seem like it was that hard to do. He looked at me and said, “I guess this really wouldn't be the way the most respected asset management firm in the world would pull up cash.” And I said, “No, it isn't.” He knew.
Suddenly, it became people playing it back to me to say, “It's okay if we don't do everything right.” We don't do everything right. We don't have 100% of the employee base say that this is the greatest place to work. And I don't think any company ever will. But we have to understand that we're trying to do it. They have to understand we're trying to be there. And I'd rather have people say to me, “This isn't how the most respected asset management firm in the world would operate.”
We evaluate people not only on what they did during the year, but how they did it. It's a direct tie to the values that hang on the wall: teamwork, collaboration, transparency. Those are all critical elements for every employee. It's not just that you did your job; it's how you did it across the board that’s so critical. And if you're constantly bringing that up — tying it to performance reviews, tying it to everything you do — that message will get out. And they will understand that. People will rally around it.
Alan Fleischmann
We’ve spoken previously about your client-focused approach to navigating work from home and the return to the office. How should organizations seek that balance? I know you have very strong points of view about culture and being in the office. Share a bit of that with us.
Doug Sieg
Yeah, I'd say the Sieg family always grows up with a strong point of view; that would not be our weak spot. But high conviction, more than willing to change over time would be the would be the approach.
The leader’s toughest question the last couple of years is what to do about the workplace environment. When we went out of the office, we very specifically didn't close the office. We recommended in March of 2020 that people not work from this location. We did not think it was safe. There wasn't a debate of open or closed. We were always open; we just told people not to come here. Over time, we embraced the fact that people could work from their home, and we have a business model where you can work on Zoom during a crisis. You can do that, and the information can flow — you can accomplish what needs to be done.
That was a big hurdle for every company. Think about all the resistance to change, and then think about how — in two weeks — we were able to have the entire economy work from home. It's incredible ingenuity and a study in change management.
Then it became really complicated. A lot of companies were coming out and saying, “We'll be back in July. We’ll reopen on August 1. We’ll reopen.” Everyone asked me what we were going to do, and I said, “I'm not going to tell anybody. Remember the principles of a crisis: it lasts longer than you think it's going to last. Therefore, we're just going to watch.”
We started to return when we felt it was safe, and we had a very risk-based approach. When the risk levels were lower, we opened — we allowed people to come to the office. What we realized along the way is that we are better together. The reason we were thriving apart was because of all the time we invested in relationships. Zoom is incredible for information, but it's not great for relationships. Relationships are built face-to-face, arm-and-arm together, working on the tough problems and talking to each other — the meetings in between the meetings and the conversations that happen in passing.
Everyone wanted to know if it would be three days per week, two days per week, or one day per week. And I kept saying, “Work where you do your best work on behalf of our clients. That's it. That's the only guidance I'm going to give you.”
I knew I was frustrating the population a bit. Everyone kept saying, “What does he mean by that? Give me how many times.” But if we said that employees can work three days a week in office, you can’t help but wonder, “Is that the best thing for the client?” Does the client really want to hear that we're only in three days a week? Or do they want us around each other?
And then you watched the numbers. When our leaders were in the office 40 percent of the time, the average employee was in the office 30 percent of the time. When our leaders were in the office 60, 70, or 80 percent of the time, the employee base was in the office 50 or 60 percent of time. When the partnership was in the office 90 percent of the time, the leaders got to 80 percent and the firm got to 70 percent. That's higher than pre-COVID levels. For most days, we are back to pre-COVID levels with people in the office, because they chose to come. Now there are some areas — like trading, risk areas, younger people coming into the business on sales desks — where you know their leader encouraged them to come back. And they should — that's incredibly important. Our clients need that. We have to do what's best interest of the clients.
As market volatility increase, our heads of fixed income said, “We are now in the office; we are now here.” And I respect that. They had to make that call. I let people know the “what” and the “why,” and each leader had to talk about the “how.” I think we're a better organization because of that flexible environment.
So we're back with much more flexibility than we had before I took over. On a Friday, absolutely. People can work where they need to on any day, and we're better leaders and people for it. I think it's a better work-life balance for people. It goes back to principle: we're just better together, and everybody saw that — you can't really argue it.
Now it's not really a dialogue for us. Everybody’s here as needed. It's actually performance based. Not everybody wanted to come back. Still, of 750 people, we only had six that really wanted to move. We tried to accommodate them — a couple worked out, and maybe a couple didn’t. But it was all centered on what's in the best interest of the client. If the client is sitting at home, and they've invested a considerable amount of money with us, they probably want us here working together, right? That's going to be the best spot. And I think that's what’s critical for us.
Expectations around the workforce have changed, and I respect that. People have come to me and said, “I can have this job where I’m able to work remotely five days per week, and I'm going to do that. I need more than just the flexibility you'll provide.” That’s fine. I respect that. But I really think in person matters. Some of the greatest friendships of my life are retired partners from the firm. A 22-year-old on the sales desk during COVID said to me, “This is going to be great. I'm going to come in two days per week.” And I said, “Isn't that you ruining future opportunity? What are you going to do, sit in Hoboken and make phone calls from your 600 square foot apartment? Come in, be around your team, and be around others.” Over time, people got back into that habit. And they're here now, which is exciting.
Alan Fleischmann
You're listening to “Leadership Matters” on SiriusXM, and at leadershipmattersshow.com. I'm your host, Alan Fleischmann. And I'm here with Doug Sieg, managing partner at Lord Abbett.
We’re discussing Lord Abbett and its remarkable culture, Doug’s leadership, and what leadership means to him. I always refer to you as [SEEG] not [SIG]. And I do that because I speak German. I'm also very struck by the word being victory in German. I think about everything you do, and you said it earlier: you’re not waking up in the morning to be number two or number three. You wake up every morning to make sure that we're number one. When I think about you and your brothers, and your mother and father, your late father was a remarkable leader himself. He and your mom obviously instilled something in the three of you, because you've done remarkable things. Back to your comment earlier — that “leaders are not born, they're made” — go a little deeper. Because it’s wasn’t easy. I’m thinking about it as a parent as well here. I love that message. Being a leader isn't easy, and as you said, “work is work.” When you go around your office, it's always about what's best. And remember the remarkable military victories that we've had, and some of the trials and tribulations in our history. That grip — where does it come from?
Doug Sieg
I’ll go back first to “leaders are made.” Period. End of story. If you go to academics, they'll tell you that it's 32 percent that are born with it, whatever that may be. I don't know if I buy that. Maybe some people have different skill sets that become better over time. But when you really look at leadership, in my mind, it's made.
You mentioned my brothers and growing up. I have a unique family situation. Andy's at Merrill Lynch and Phil's at JP Morgan. My father was a real estate developer and my mother ran the house — she was in charge of everybody, including my father, and we had dinner together every single night. My father would leave the office, come home, have dinner, and sometimes go back to the office, which we can't do in the New York area. But you could in Central Pennsylvania.
The discussion was always an adult discussion. I was the youngest, and he didn't bring the discussion down to the youngest level. He brought the discussion where he wanted it. It was about business, people, and relationships. It was about what it means to really succeed in life, and how you can succeed. He always used to say, “I don't care what you choose to do. I don't care if you're the worst or the best, just be the best you can be. That's what's most important.”
Looking at leadership — you mentioned the military, and I can go sports or military — people talk about the great victories. In sports, Muhammad Ali always used to say that he never won a boxing match in the ring. He won it in the hours, months, and days of blood, sweat, and tears training for that moment in ring. Thinking about the great athletes, what you don't see is the work ethic — you don't see what they do every day. And a lot of times they don't think about that as work. They think about it as what they love to do.
I have four daughters, and I tell them that life is about finding your passion and then learning over and over again. Every night at dinner I say that there are four Sieg rules. Always be kind, always tell the truth, always do your best, and — most importantly — always do what you say you will do. Keep those front and center, and life is pretty easy.
I’ve been fascinated by leadership in so many different ways. I've been listening to the podcast by David Senra on founders. David is a fabulous leader — a unique person whom I’ve had speak to the firm’s partners at an off-site. He reads autobiographies and then does an hour-long podcast. He’s done 286. I listened to one on Andrew Carnegie, but it’ll range from Estee Lauder to Gloria Vanderbilt, to incredible Silicon Valley leaders like Steve Jobs, Peter Thiel, and others, and you realize some of the commonalities that the great leaders have. There’s a great YouTube video of Bill Gurley, the great venture capitalist, speaking to a University of Texas class about what he's learned during life. And one of the things he hits on — which I think is so important — is the need to consume information. The greatest leaders are obsessive about the information. They talked about Thomas Edison, and how he went through the Detroit library when he was going to his first job. He was 16 or 17, and they asked, “What did you read in the library?” He said, “I read everything! I read every book.” He had insatiable ability.
You don't have to be the smartest or have the best skills. But one thing you can control is the amount of information you consume. And that is leadership. If you look at the Medal of Honor winners, most of the time, they aren't the people who were the biggest, strongest, bravest leaders. They're the individual contributors for whom the moment happens, and they rise to it because of their training.
When I look at so many leaders at Lord Abbett who thrived during the COVID crisis, or just leaders in general, it's usually the overnight success that took 25 years to happen. Because there’s no real substitute for experience. There’s a great podcast that David does on Steve Jobs, and one episode is about how Steve would say that 42-year-old Steve Jobs was so much better than the 22-year-old Steve Jobs. And think about 22-year-old Steve Jobs on the cover of TIME Magazine — at that age, to be given that much. Yet with the experience he had when he came back to Apple, he knew how to deal with people, how we changed, and how we evolved. Leaders need that time to groom, become stronger, and collect the skill set so that when the moment calls, they're ready for it.
Alan Fleischmann
I love that. One of the qualities that I think defines your leadership is a pragmatic optimism. You're very pragmatic, you hold people to task, and you have high goals. But it's inspiring, and you lead us to light, not to dark. And there are leaders who do look to the dark and look at the sunset, but not necessarily the sunrise. How does that positive but realistic mindset shape your worldview? And how do you how do you keep that going?
Doug Sieg
I always hear people say, “Oh, you're an optimist.” And I say, “Absolutely. I'll choose that every single day.” I have never seen the trophy lifted, or the bell rung at the New York Stock Exchange, or anything won by people saying, “I did this on the back of pessimism, Alan. I didn't think we could do it. I'm stunned.” No one ever says that. They understand what they want to be. They allow themselves to dream — very, very big at times.
One thing I’ve listened to is a podcast on Steven Spielberg. He was practicing his Oscar acceptance speech at the age of eight, and he knew that optimism. Now that's not blind optimism; you have to combine that with the brutal facts. And you have to allow yourself the comfort as a leader to say, “Hey, we were just not doing this well.”
In the last couple of days, I stepped in on a project that I didn't think was going well. It’s super important. It's super complicated, and there are a lot of people involved. I listened a lot to what people said — I love to talk, but I love to listen more. And I love to hear and digest different and diverse opinions. After listening awhile, I said, “Does anybody think this is working well?” And nobody really wanted to say it wasn't. But eventually they admitted, “Yeah, it isn't.” And I said, “Okay, now let's not dwell on why it's not working. Let’s dwell on exactly what we need to do to make this work well. What can we throw at this?” That’s so important.
As leaders, you can control a lot, but you can't control people's attitudes. When your two feet hit the ground in the morning, there's a choice, and it's a choice only you can make. That choice is what you want to do with your day. And if you get up and say, “Oh my God, the day is terrible, I hate my job, it isn't going to be great at all, we're not doing well,” that's going to send you in one direction. If you look at the other side, where people come out and say, “I am going to tear the world up today, and I'm going to dream big. I'm going to be something I never thought I could be. I'm going to push myself harder.” That's a different direction.
As an organization, that's what our clients want from us. They want us to be what we said we were in 1929: a firm that puts the interests of the clients first…being independent in our thinking, and staying in one business. Someone asked me today what we can expect in the 94th year of the firm, and I said, “The same, but with a ton of passion, and a ton of dreaming big.”
Alan Fleischmann
I love that. What are your favorite books that you'd recommend on leadership — quotes, biographies, some of your favorite things that you want to share?
Doug Sieg
I would throw out one — the David Senra podcast. He does an incredible job of synthesizing what it takes to be great at what you do, which I love. They’re 40-45 minutes and it's a lot of the similar messages. That's critical. Anyone around the firm can tell you that I’ve become a bit obsessed with that in the last couple of weeks.
Second, I would go back and study great leaders. Read biographies on leaders like Lincoln — Team of Rivals, one of the greatest things to read for any leader. Doris Kearns Goodwin wrote a book on leadership. Walter Isaacson wrote some of the greatest books on exceptional people — Leonardo da Vinci, Steve Jobs, and others. I just read Jeff Bezos’s book on all the shareholder letters that he put out, which are incredible and inspiring.
So, first is podcasts. Secondly, you always have to have a book in your hand. There's just a new Henry Kissinger book on leadership; I do not have it yet, but I'm dying to get it and look at it. I think those are all great things. Then, the last thing is being around great leaders. Go and find great leader. You’ll find that great leaders will talk about leadership. They love it, and they love to talk about it. Make sure you're constantly bouncing ideas off them, and that you’re not only thinking of things in your walk of life. You can go out and find incredible people who have done such extraordinary things in their lives that you can learn.
So, there are some books, but I don’t think it’s just books. A lot of it is being insatiable and trying to try to read and understand and get outside your comfort zone. I looked at the biography on Alexander the Great — and I don't really know a lot about Alexander the Great, but when I read it, I thought it was incredible. There's so much you can pick up from different leaders. If you’re really looking to be a great leader, that’s what you have to do.
Alan Fleischmann
Amazing. It's such an important message you're sharing here, because when you talk to people that are most admired as leaders, they almost always relay that they are avid readers. And they are normally avid readers of other leaders. They have an insatiable appetite for history like you. Certainly they want to know about great individuals, warts and all, over time. But they're reading about other leaders and learning from them through those autobiographies as well. That's, that's really important for anyone who is ambitious, has a type A personality, and wants to be number one. That’s a huge ingredient.
We’re running out of time here, which is sad, because I want to have more time with you. You've been named “Ally of the Year” by Women in Asset Management. You are known for being a mentor. As you said, what keeps you up at night is, “Have I failed to actually help others reach their promise?” It’s a huge part of your leadership and culture — and a big part of Lord Abbett’s culture. How important has mentorship been for you, and how important is being a mentor? I think that'll be a wonderful message to share with our listeners.
Doug Sieg
Sure, there's two things I've learned in 28 years of business here. The first is great things don't happen unless the strongest areas reach down and help the weaker areas up. That's number one. That is 100% mentorship. It's pragmatic, and it's good business sense.
The second is — hands down — a more diverse team is a better team. You mentioned my sports background. When I walked into locker room in college and looked at the diversity of that team — one of the captains was a linebacker from Miami, who happened to be Black, who happened to be from a very, very poor family, and the other was a quarterback from Stamford, Connecticut, from a very affluent family. I realized right away that more diverse teams are better teams. That theme always replays itself, whether it's diversity of thought, gender diversity, or ethnic diversity.
From there, I’ve looked at boards that we interact with, such as our mutual fund board. And it's one of the most diverse in the industry. You watch them, and they're just higher functioning. If you're a leader, the maximum goal is to take your area to an elite stage, no matter how large or small your area is. Many people, when they’re put in charge, think they just have to do more of what they’re doing. And that’s not the answer. You were given the keys to the bus, but that bus may be stuck in mud. You've got to think about where you want to take that bus. That's what they're asking you to do. It’s critical thinking, and you have to ask, “What's going to get me there?” And very seldom is it going to be a non-diverse team. I would argue never.
Our industry hasn't been great at that — and our firm has worked very, very hard to become a more diverse organization. I think we've done a good job. The numbers say that we're better at that. You have to start with being a more inclusive firm. You can get all the diversity hires you want, but if you're not an inclusive organization, everyone will leave.
You have to think through what it’s like to be a working mother. What it means to be a minority in the room. Or what it means when you are the underrepresented gender in the room. How do you help them bring their voices out? How do you make sure that they're talking? We have introverts and extroverts, and when they're all in a meeting together, you likely hear more from the extroverts. As a leader, you have to reach out and help the introverts along. You know that they're thinking something — help get them talking.
I was very proud. I don't think it was Doug Sieg that got “Ally of the Year” award. I think it was the partnership at Lord Abbett. It was people and the culture at Lord Abbett that got that award. I would love to live in a world where you never had to have an “Ally of the Year.” That would be awesome. I think the perfect moment would be when we know we've come to a very diverse team, and we respect those diverse teams. We respect that people bring different perspectives to the table.
We're in an industry that hasn't done well in that. And we've said that we want to be a leader there. And we have to be better. We've done really well in gender diversity; we have to have better ethnic diversity. So we've got to push ourselves and say, “How do we do that better over time?”
When I took over, one of our female partners said that we have to be 30 percent diverse in the partnership — we have to lead from the top. We're now 36 percent diverse four and a half years later. And one of the members of the Partnership Committee — which we formed to help vet the partners —explained to me when we met that it was impossible for us in five years to become diverse as a partnership; we could not hit the numbers we needed to hit. And I laughed, because you know how fluid business is and how much there are changes and opportunities where you can hire other talent. But I smiled and said that one of my favorite parables is the kid who went to the teacher. And the teacher said, “I'm gonna ask you a question. If you get it wrong, I'm going to hit you with a stick. If you get it right, I'm going to hit you with a stick. And if you choose not to answer, I'm going to hit you with the stick.” What did he do? He broke the stick. You grab that stick; you break it. We have to break the stick. I know it's hard, but we have to figure that out.
Suddenly, you're starting to see more diverse hires in the organization, and we are pushing for internship programs that allow for more diverse populations, younger populations. We thought differently about hiring practices and how teams come alive. That’s not me. That's leaders. That's the partnership; that's human capital management. That's others thinking about where we can move talent. As we think about the review process, is there an unconscious bias at the table? And if so, let's talk about it. It's not a bad thing. Everybody has it — let's talk about it, and let's move forward. That’s been great. But I would love a world where there is no award for “Ally of the Year.” That would be a great goal someday.
Alan Fleischmann
And the way you described it earlier, too — it's not just the “what,” but the “how.” There’s so much that we’ve talked about this last hour: culture and why Lord Abbett stands alone in so many ways. Living by certain principles, and certainly by living these axioms — these powerful principles of leadership that you, your colleagues, and your partners bring to the table every day — is truly special and inspiring. You put a lot of it down on paper. You share a lot with your employees. And I'm going to get you to put it out there more on LinkedIn so others can see it.
I certainly want you to come back on the show for a third time so we can talk more. We can dive into these great leaders in history together and share why they are so exceptional. And why their leadership matters even today, because we’ve learned a lot from the past and how we should go forward in the future.
You've been listening to “Leadership Matters” on SiriusXM and at leadershipmattersshow.com. I'm your host, Alan Fleischmann. We've been with Doug Sieg, managing partner at Lord Abbett. His last name is S-I-E-G, Sieg in German, which means victory. And I can see why Lord Abbett is so victorious. It’s because of these principles and values that you share every day. I am grateful for what you do and am looking forward to the next time you're on the show with us.
Doug Sieg
Thank you. Great to be here, Alan.
