The Banality of Investment Process

Released in 2021, the Beatles documentary Get Back offered a captivating inside look at the creative process of the legendary group.  The director of the three-part film, Peter Jackson, used restored footage of sessions that took place more than half a century ago to capture the dynamics involved when the four lads from Liverpool came together to make new music.  Only a handful of years after the height of Beatlemania, the sessions showed a changed group little more than a year away from breaking up.

This posting about investment process borrows part of the title from an excellent essay about the documentary, “The Banality of Genius,” by Ian Leslie.

There are significant differences between the day-to-day gatherings of an investment team trying to outperform the market and a musical group hoping to capture the fancy of the listeners of the day (and maybe even stand the test of time).  The latter is seen to be a more creative activity, even though enduring success in each realm requires domain expertise, discipline, and a willingness to stand apart from what others are doing.

Aimlessness and alchemy

The documentary clocks in at around eight hours, but Jackson had more than six times that much raw material from which to choose.  The Beatles had provided unparalleled access to a film crew for a television special documenting the creation of an album.  Instead, some of the footage was used in the film Let it Be, which was released in 1970.

Most of the eight hours is the band working out songs, many of them played over and over and over.  Despite the banality of it all, Leslie wrote, “Somewhere on this seemingly aimless journey, an alchemy takes place.”  The genius is revealed slowly, as we get into their world just a bit:

That so little happens for long stretches makes the viewer pay closer attention to what is happening.  It forces us to become attuned to the microscopic level at which close relationships unfold; to read the densely compressed messages that can be contained in a look, a smile, an offhand comment.

Switching to the investment realm, sometimes those doing due diligence ask to observe a meeting of an investment team, in the hope that a promised alchemy can be observed.  But an hour of watching the interactions of a team doesn’t reveal much, since such encounters are more performance than reality.  The messiness of the process isn’t there — and it is in that messiness that the alchemy often takes place, where the connections, conflicts, confusions, and true underlying culture come to the fore.

Get Back provides all of that regarding the Beatles in a most unusual way, because they let the cameras roll.  Leslie observed that there were two founding principles that the group seemed to live:  “being themselves and staying themselves,” while “always moving on.”  The band’s incredible body of work rested on that combination.

Analogies

The film offers some perspectives regarding investment process:

That banality.  The day-to-day can’t be captured in a diagram in a pitch book or by witnessing a single meeting.  That presents problems for those evaluating asset managers and for the managers themselves, since the real process can’t be explained or understood.

The people.  John, Paul, George, and Ringo were different from each other in temperament and skills.  Each went on to solo success, but together they could really make magic — a lesson for investment teams, which are often made up of people with similar abilities (and shortcomings).

The dynamic duo.  Lennon and McCartney were the alphas that guided the group, but the film shows the relationship during a time of change.  (Leslie:  “John and Paul are talking to each other without talking to each other.”)  Even so, when they were making music, something clicked into place.  Similarly, the shifting dynamics among the members of a firm or a team is one of the hardest things for leaders to manage (and followers to manage/endure), and difficult to assess from the outside.

History.  The Beatles honed their craft by playing in front of audiences in Hamburg and Liverpool for hour after hour, day after day, month after month.  The importance of those formative times was evident from comments in the film and by how spontaneously and easily they could launch into songs from that period out of the blue (many of them written by others).  Whatever a team’s history, it is key to what it is today.

Environment.  The sessions started out in a large movie sound stage that seemed inappropriate for the task at hand, and the band was disconnected, at odds, and unproductive.  Then they moved to a proper studio and everything improved.  The environment in which a team operates matters — it needs to be conducive to the task at hand.  Organizational design should include consideration about what kind of spaces work (and why).

The presence of others.  The Beatles were not alone in either location.  With them were the camera crew, sound engineers, producers, the director of the putative television show, assistants, other visitors, and, always, Yoko Ono.  (Her presence was the topic of much commentary about the original film, which has continued with this one.)  For the most part, the Beatles were able to focus on each other amidst what often was a rather chaotic scene.  An investment team usually doesn’t have to deal with much of that, but it can happen, and over time it becomes evident whom they rely upon among those extras and who mostly gets in the way.

New blood.  Toward the end of the sessions, the keyboardist Billy Preston sat in and the effect was immediate.  Not only did his piano and organ work make many of the songs come alive, but his smile lit up the room and altered the mood.  In no time, Lennon said, “You’re in the group.”  Even a long-successful team can be taken to the next level with the addition of someone with skills or a human quality that have been lacking.  Getting both at once can be transformative.

The missing.  At one point, McCartney indicated that things hadn’t been the same for them since their manager, Brian Epstein, died suddenly two years before at the age of 32.  The absence of those who are no longer part of a group can haunt us in a variety of ways, especially if we have a hard time replacing what they brought to the team.  A departure can mark the beginning of the last chapter, even though it doesn’t appear that way at first.

Good work takes time.  Leslie reported that the Beatles played the song “Get Back” 43 times in one day.  In the film there is take after take of it and many others; the repetition allows you to see the discipline that is required for creativity, as well as how small changes can remake something you’ve been working on forever.  A good lesson in process.

Trust.  Despite things that weren’t as they used to be, the Beatles had each other.  They had lived in a crucible of public attention and made marvelous music.  There was a bond of trust between them that got them past most of the squabbles that they had had over the years — and they knew they made each other better.  Being in the groove together was where they really wanted to be.  That’s a special feeling, whether it is in a studio or a conference room.

The edit matters.  The 1970 film, Let it Be, was depressing, edited in a way that seemed designed to show the impending dissolution of the most iconic music group in history.  There is foreshadowing of that in Get Back, but the overwhelming impression is of the creative process at work, full of flaws and quirks and differences and boredom.  That’s really what human processes are all about if you look closely enough.

Up on the roof

As the allotted time for the project ran out, the planned television special was discarded.  The Beatles eventually decided to record a surprise concert on the roof of their building, several floors up in the heart of London.

It would turn out to be their last live performance.

The band played several of the songs they had been practicing in the studio.  The work showed — and some tunes we have known for fifty years were recorded during that rooftop gig.

It was cold and the conditions weren’t right for greatness, but that’s what the Beatles delivered.  There was a joy in the performance that harkened back to the humble confines of the clubs in Hamburg and Liverpool.  It was all about the music.

When a talented group comes together, there’s nothing quite like it.