Success By Ten

The father of pension fund management shares essential lessons to building a business

As the world's leading pension fund consultant, George Russell's advice has been sought by many of America's largest corporations. A pioneer in this business since the late 1960s, Russell has seen a lot. Now, he shares his experiences in this field with you, and provides valuable insights into what it takes to succeed in business today.

Broken down into ten chapters, Success by Ten describes significant moments in the origins and development of pension fund consulting and the institutional investment industry. This history is intertwined with Russell's own personal story and the innovations that his company introduced to the industry.

• Author George Russell is well known to many throughout the investment industry as the first pension fund consultant
• Each chapter represents a business lesson that Russell has learned during his career
• Outlines a people-centric approach to building a successful corporate culture

Taken together, the innovations outlined throughout these pages spurred the professionalization of pension fund management, with the potential benefit of improving financial security for everyone who is investing for retirement. In Success By Ten, Russell discusses the development of these innovations and reveals how you can apply them to build a better business.

Acknowledgment xi

Introduction xiii

Chapter 1 Non-Negotiable Integrity 1

Building Character 2

Reach for the Summit 4

Our Business is Based on Trust 6

Integrity is More Important than the Bottom Line 9

Do the Right Thing 9

Integrity Cannot Be Negotiable 11

Chapter 2 Persistence, Patience, and Cold Calls 13

Early Days at Frank Russell Company 14

Building a Retail Sales Operation 15

Harvard to the Rescue 17

The Cold Call 20

Paul Kaltinick’s Perspective 22

A Unique Selling Proposition 23

Evolving the Business Model 24

Compensation 25

Top 40 Hits: 1970–1974 27

Minimal Debt; Reinvest 28

Notes 29

Chapter 3 Hire People Smarter Than You Are 31

The Need for Innovation in Pension Fund Management 32

Peter Dietz and His Method of Performance Measurement 33

Helane Grill, Madelyn Smith, and Joan Sobba—The Three Musketeers of Manager Research 36

Creating a Universe 39

A New Process for a New Industry 40

Madelyn Smith Shows Her Style 42

Russ Fogler—Pioneer of Asset Allocation 43

Duncan Smith Asks the Tough Questions—and Answers Them 46

Don Ezra Defines the Right Way to Be a Fiduciary 49

The Best Investment I Ever Made 52

Notes 53

Chapter 4 Be Creative 55

The Treasurer’s Club: They’re Not Laughing Anymore 55

Blake Eagle Puts Real Estate on the Map 57

London Calling 60

Our Battle to Exceed Client Expectations 62

A Funny Thing Happened on May 1, 1980 63

The Only Difference is the Zeros 64

Making It Fly 65

FRTC’s All-Stars 67

From Wall Street to Main Street 70

Concentric Circles 73

Chapter 5 Work Hard 77

Setting the Tone 78

The 120 Percent People 81

Work is Only a Means to an End 83

Incentives that Worked 85

Growth and Change 88

Chapter 6 Share Credit 93

Getting Rid of Titles 93

Stars of the Investment Industry 94

The A Team 95

Our Biggest Mistake 98

Plenty to Celebrate 100

Sharing Credit—Globally 104

Sharing Ownership 105

Chapter 7 Recognize Luck 109

Are You a Decision Maker? 111

The Decision Factory 112

Decision Triggers 114

Kelly Haughton Builds a Better Benchmark 116

GM Starts with a Clean Slate 118

Crossing the Threshold 118

Testing the Concept 120

How Much is Luck and How Much is Skill? 122

A Grammatical Postscript 124

Note 125

Chapter 8 Plan Transitions 127

Hire and Train Your Replacement 128

The Apprenticeship of Michael Phillips 131

Mike Takes the Helm 133

Continuity of Culture 135

Selling the Company 137

Closing the Deal—Complementary Skills 139

Moving Forward 140

Chapter 9 Take Risks 143

New Opportunities 143

The Inspiration of John Mroz 145

The Opportunity of a Lifetime 146

Access Matters 148

Russell’s Venture in Alternative Investing 150

Asset Allocation is Rocket Science 152

The Final Frontier? 154

Chapter 10 Have Fun 159

Fun in the Himalayas 160

The Russell Sabbatical Program 161

Fun at Work 163

Transition to Philanthropy 166

New Adventures: Russian Puppets and Nuclear Waste 167

EastWest Institute 169

The National Bureau of Asian Research 170

The Pacific Health Summit 171

The Business Humanitarian Forum 173

One Nation Brings Together Americans of Different Faiths 175

A Child’s Right 176

Note 177

About the Authors 179

Index 181

"... The four decade history of Frank Russell Company (know today as Russell Investments) is intertwinded with Mr. Russell's matter-of-fact storytelling and insights. His anecdotes about non-negotiable integrity, hiring smarter people, recognizing luck and having fun at work are treasured lore for those who worked alongside him the past 40 years. Now Mr. Russell is sharing his favorite lessons at a time when many entrepreneurs, business leaders and civic-minded philanthropists are questioning what it takes to be successful during challenging times. ..."
FinanzNachrichten.de, 20.11.2009

GEORGE F. RUSSELL JR. pioneered the business of pension fund consulting in the late 1960s and was named in 1993 as one of the four most influential people in the world of institutional investing. He is the creator of the Russell 2000 Index and the visionary behind Frank Russell Company, one of the world's leading investment management and advisory firms, with offices in financial centers worldwide. George Russell received the Lillywhite Award from the Employee Benefits Research Council for outstanding lifetime contributions to enhancing Americans' economic security in 1998, the CFA Institute's Thomas L. Hansberger Leadership in Global Investing Award in 2008, and the Woodrow Wilson Award for Public Service in 2009.

MICHAEL SHELDON worked at Frank Russell Company from 1993 to 1999, writing marketing materials and helping George Russell draft articles and client communications. He cofounded XMedia Communications in 1999 to provide marketing, copywriting, creative content, and strategy to a diverse clientele. Throughout his career, George Russell–a pioneer in the pension fund consulting business and driving force behind Frank Russell Company–has gone about doing things his own way. Avoiding textbook approaches, Russell has innovated best practices for managing money, and for building a long-lasting business. Under his leadership, the company, today known as Russell Investments, has grown into one of the world's leading investment advisory firms.

Now, in Success by Ten, Russell shares his experiences in building a better business with you, and shows how the right corporate culture and the proper people can play an important role in this process.

Broken down into ten engaging chapters, each of which represents a business lesson that has helped Russell excel over the years, this reliable guide weaves Russell's own story with the insights of colleagues he has learned from along the way. And while the information and innovations outlined throughout these pages spurred the professionalization of pension fund management– with the potential benefit of improving financial security for investors–they are broadly accessible and can be applied to organizations of any type or size.

Success by Ten puts the essential elements of building a profitable business in perspective. The practical advice you'll find here includes:

• Integrity must be non-negotiable, because one slip can ruin the entire enterprise

• Bringing people together and sharing credit with them will result in dramatic improvements in productivity

• Creative ideas may be ahead of the market; they require patience and a willingness to ignore the bottom line while you wait for the market to catch up

• Continuing to take risks is essential, because your competitors will be doing their best to make you obsolete, irrelevant, and unprofitable

• Occasional breaks, like the Russell sabbatical program—for every ten years of service, you earn a two-month sabbatical—are great investments; they enhance productivity and seed innovation

It takes more than just spreadsheets and statistics to create and grow a business in today's competitive market environment. With Success by Ten as your guide, you'll quickly discover how the principles that have served George Russell so effectively can also benefit your company, your customers, and your employees.

Throughout his career, George Russell–a pioneer in the pension fund consulting business and driving force behind Frank Russell Company–has gone about doing things his own way. Avoiding textbook approaches, Russell has innovated best practices for managing money, and for building a long-lasting business. Under his leadership, the company, today known as Russell Investments, has grown into one of the world's leading investment advisory firms.

Now, in Success by Ten, Russell shares his experiences in building a better business with you, and shows how the right corporate culture and the proper people can play an important role in this process.

Broken down into ten engaging chapters, each of which represents a business lesson that has helped Russell excel over the years, this reliable guide weaves Russell's own story with the insights of colleagues he has learned from along the way. And while the information and innovations outlined throughout these pages spurred the professionalization of pension fund management– with the potential benefit of improving financial security for investors–they are broadly accessible and can be applied to organizations of any type or size.

Success by Ten puts the essential elements of building a profitable business in perspective. The practical advice you'll find here includes:

• Integrity must be non-negotiable, because one slip can ruin the entire enterprise
• Bringing people together and sharing credit with them will result in dramatic improvements in productivity
• Creative ideas may be ahead of the market; they require patience and a willingness to ignore the bottom line while you wait for the market to catch up
• Continuing to take risks is essential, because your competitors will be doing their best to make you obsolete, irrelevant, and unprofitable
• Occasional breaks, like the Russell sabbatical program—for every ten years of service, you earn a two-month sabbatical—are great investments; they enhance productivity and seed innovation

It takes more than just spreadsheets and statistics to create and grow a business in today's competitive market environment. With Success by Ten as your guide, you'll quickly discover how the principles that have served George Russell so effectively can also benefit your company, your customers, and your employees.