When your business no longer feels aligned, trust your instincts to make a change. The required pivot may be disruptive and risky, especially if the current model is commercially successful, but your internal wisdom is the most reliable guide for long-term fulfillment and integrity.

Drawing on Charlie Munger's wisdom, investment management problems often stem from misaligned incentives. Instead of trying to change people's actions directly, leaders should redesign the incentive structure. Rational individuals will naturally align their behavior with well-constructed incentives that drive desired client outcomes.

WCM realized its intensely caring culture risked becoming too soft, potentially enabling underperformance. They consciously implemented a practice of 'truth-telling'—having direct, difficult conversations about performance—as a necessary counterbalance to maintain high standards and ensure accountability.

While long-term focus is a virtue, investment managers at WCM warn it can become an excuse for inaction. During periods of significant market change, blindly "sticking to your knitting" is a liability. Recognizing when to sensibly adapt versus when to stay the course is a critical and nuanced skill.

When introducing a disruptive model, potential partners are hesitant to be the first adopter due to perceived risk. The strategy is to start with small, persistent efforts, normalizing the behavior until the advantages become undeniable. Innovation requires a patient strategy to overcome initial industry inertia.

When driving major organizational change, a data-driven approach from the start is crucial for overcoming emotional resistance to established ways of working. Building a strong business case based on financial and market metrics can depersonalize the discussion and align stakeholders more quickly than relying on vision alone.

Economic pressure forces leaders to prioritize immediate, bold actions over incremental gains. This creates a stigma against continuous improvement, which can be perceived as slow or lacking strategic impact. The mandate is for massive, transformative change, not small, sustainable steps.

Instead of starting from a textbook, WCM developed its effective culture by identifying the negative traits of its original founder's regime—control, opacity, and stinginess—and deliberately doing the opposite. This 'inversion' method provides a powerful, practical template for cultural transformation.

When WCM refreshed its portfolio, the new holdings initially lagged behind the old ones as the market snapped back. This created a "lonely" period of intense self-doubt and internal questioning. This highlights the emotional difficulty of sticking with a process change before results validate the decision.