Harvard Management CEO reveals keys to successful leadership

Jane Mendillo presented this year's President's Lecture.

Jane Mendillo presented this year’s President’s Lecture.

The Boston Red Sox’ dramatic victories in the World Series may have galvanized New England, but Jane Mendillo had another thought as she watched jubilant fans streaming out of Fenway Park after the clinching win. This team exemplified the leadership of its coach, John Farrell, who created a climate that allowed his players to excel and then deflected all credit to them once they did.

“He was the essence of a leader,” she said.

Mendillo, the president and chief executive officer of Harvard Management Company, delivered her remarks in the Nov. 14 President’s Lecture, “Personal Reflections on Leadership and Career,” held at Razzo Hall.

Mendillo oversees the investment portfolio for Harvard University, whose approximately $30 billion in value makes it the largest university endowment in the world. She previously  managed investments for Wellesley College.

Effective leadership, Mendillo said, is based on a variety of factors: a strong foundation, high standards, ethics and long-term thinking. A leader motivates his or her team to be better than they think they are, she said.

To illustrate, Mendillo called on another sports analogy, that of the American rowing team who performed far above expectations to earn a gold medal at the 1936 Olympics in Berlin. Mendillo recalled her first months on the job, which coincided with the market crash in 2008-2009, and how she and her team daily would assess the economic devastation and work on the next steps. Over time, it became apparent who were the most committed to “pulling on the same oar,” knowledge that enabled smart staffing decisions to bring in new energy.

“We had no room for passengers on this boat,” she said.

When you’re entrusted with investing other people’s money, strong ethics must always be the guiding force, said Mendillo, pointing to the cautionary tales of those who lost their grip on their moral compass, such as Bernie Madoff. There can be no leeway — no slippage — when it comes to doing the right thing, she said.

Long-term thinking is crucial when you’re overseeing funding for Harvard, she said. Her management team is constantly looking for opportunities that short-term thinkers might not see, for instance with key investments in timberland and natural resources. The Harvard portfolio exemplifies good risk management and diversified investments that allow the annual delivery of approximately 35 percent of the university’s operating budget, which equated to $1.5 billion in fiscal 2013, she said.

Mendillo’s personal journey took her from her undergraduate days as a Yale English major to a job as a management consultant (her interest in finance was sparked by a student job in the Yale investment office). Her desire to have more of an impact then led her to the Harvard position, where “my decisions, good or bad, are right there in the portfolio for all to see.”

During her lecture, Mendillo advised students to move beyond their comfort zones, take risks, and not be afraid to stand up for themselves when they “get pushed in the sandbox.” Her own comfort level is challenged all the time, she acknowledged, and it can be daunting “to show the courage of your convictions even when the major indicators and prices are moving against you.”

Ensuring that your mission is clear and consistent with well-defined goals will keep your team engaged and directed, Mendillo insisted. “When the world is falling apart, it is the mission that will give focus to your team and to you.”

During the question-and-answer segment, Mendillo explained that Harvard’s portfolio is more global than most other endowments, and her staff scouts international opportunities, assesses risks and meets with potential partners. The strategy pays off, she said, noting that one of her staffers spent a year in China and emerged with a clearer understanding of the legitimacy of investment partners in that country, one of many factors driving strong long-term returns.

The Clark University President’s Lecture Series was established in 2002. The series consists of several lectures each year by eminent speakers in the sciences, arts, humanities and international relations.

 

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