How I Invest with David Weisburd
00:30:57 · David Weisburd
[00:30:57] S0: are essentially CEOs of their own position.
00:31:00 · Christopher Donahue
[00:31:00] S1: They are. They are. And that makes for longevity. The customers like it. Now, we bring people in. Nothing's perfect, and it works like that. But another one of the ones that I like is, since I did time in law school, that there's no dying for the wrong reason. My dad was a West Pointer class of 'forty six. There's no dying for the wrong reason. Now, dying for the right reason isn't all that good, but dying for the wrong reason is stupid. Dying for the wrong reason is messing up on compliance, or with the SEC, or doing some stupid deal that may turn a switch on for five minutes that you know down the road it doesn't work. When we do acquisitions, we do them for the long haul. We don't want to just spread pixie dust over the marketplace and say, Oh, this is this whoop de whoop. We're to live with it for a long time. So we want the cultural fit. And I'll tell you one more that's very interesting. When we bought Hermes in '18, they had a code that they... An honor code, a code that they agreed to. And they said, Well, you guys should have this. We said, We don't need no code. We're Americans. We don't need a code. Then we read it. So, we'll just read it. So, we read it. We go, Well, we agree with all this stuff. And so, what happens is over 95% of their people just sign up voluntarily, and we don't use it against them. It doesn't get weaponized. So he said, okay, we'll do it. But there's two things you you... We're gonna, comment on on that. Number one, you're gonna put the word fiduciary in your code, which it wasn't in there. We thought that was important. And the other thing is we're going let you spell behavior wrong with an IOUR. So that was our deal. And now we have their code as part of our deal. We have over 95% of our people looking at it, sign up, say, Yeah, that's kind of like what I do. And it and it is customer focus, be nice, dignity and respect, respect even the regulators, improve the community, improve your activities, be working on... You know, that that kind of thing.
00:33:09 · David Weisburd, Christopher Donahue
[00:33:09] S0: What's downstream of having employees sign the honor code? [00:33:13] S1: Nothing. It doesn't... Hopefully, it doesn't change anything. Hopefully, it's just an endorsement. They understand what the culture is at Federated Hermes and now they're part of it. They go, yeah. But we don't go after because they're, woah. Woah. Woah. Woah. Right here, says this. No. It doesn't get used like that. It's it's just part of the deal. [00:33:33] S0: Reminds me a little bit about how the North Vietnamese turned some of the captors against the Americans. Have you heard about this? No. Would have them... Every day, they would have they would have them just... They were starving, and they they would starve them. And then they would have them... They would give them food, which is very scarce, just for writing certain things, and they would say something. And they started very light. They would just say, capitalism is not a perfect system. And then next one, they would say, America is great, but not the best country in the world. And by then, they were saying, we are communists. Like, you know, several months later, sometimes getting people to do things that you want. Obviously, in this case, it's a very positive thing. But sometimes just having people sign something and write something is extremely powerful, powerful psychological. We call
00:34:24 · Christopher Donahue, David Weisburd
[00:34:24] S1: it repeat the sounding joy, repeat the sounding joy. And the things that are in there are not with the nefarious end. The other thing I would say about the prisoner of war camp is that there are things that happen, like when the markets shut down for an extended period of time on 09/11. Okay, or when 'eight happened or when COVID hit. And so everyone said, when is this gonna be over? And our attitude about it is we go day by day, we make it work, we do everything we can, but I can't give you a deadline. And this is what ruins guys inside prisoner of war camps. They make their own deadline. I'll be home by my daughter's birthday. I'll be home by spring. I'll surely be out by next year at Christmas. Expectations. And it's a revolution of rising expectations, and it diminishes your ability to survive. Now, today, we call that sustainability, but owner operators call it survival on account of we don't want to be dead. And this is the message, and and you brought that up about the prisoner of war camp that we try to preach when there really, really are difficulties. We're gonna do everything we can right now, but we're going day to day on this, and we're not gonna tell you when it's over. Oh, Chris, tell me it'll... When it'll be over. No. I can't tell [00:35:50] S0: you that. I don't know when this will be over. I could count on a small handful of companies in the world that the majority of people really love coming to work. How do you get people to love coming to work?
00:36:05 · Christopher Donahue
[00:36:05] S1: Exactly. It begins at learning. One of the other little articles of faith that we had was that when you are doing something new, you are motivated because you're learning something. If you're in the financial service business, you're doing new stuff all the time. You can't avoid it. It's always working. So you have an underlying impetus to be learning and to be motivated. But it also begins if your philosophy is that each human being has dignity and is demanding of dignity and respect long before any of this fancy stuff became part of government regulations. This was a very important part of how we function. And that's why I said before that, you know, you don't enjoy this. Can we fix it? Well, no. Then we have something else. Well, then maybe we're not the right place for you, and so we call that graduation. So that's really what's what's going on is you've you've gotta have it be where you respect the individual, let them paint their own painting like I've told you, and you've gotta have comp programs and pleasant things. You know, in Pittsburgh, you can be full executive running money, doing lawyer line. You could coach your daughter's soccer team, and it's not a problem because it's a twenty minute commute. You know? It's not gonna take you two hours in a train. That's an important thing. We get a lot of people who come, to work for us, even if they work somewhere else. They grew up in Pittsburgh, and they realize they wanna raise their kids or they wanna come back. And we are a warm and loving home.
00:37:47 · David Weisburd
[00:37:47] S0: When I hear somebody that's worked at a firm for over fifty years, to some people that might sound boring or uninteresting. To me, it's fascinating because to me, that's fifty plus years of compounding knowledge and compounding experience within a single context. I'm curious in terms of how the organization has evolved and what advantage has continued to compound after five generations.