The Investment Philosophy of Abigail Johnson: Insights from Fidelity’s Trailblazing CEO
Abigail Johnson, Chairman and CEO of Fidelity Investments, offers a unique perspective on leadership and business strategy, drawing from her extensive experience in the financial services industry. In a recent online event hosted by the Tufts Financial Network, Johnson shared her insights on maintaining a dynamic and innovative business, the value of diverse strategies, and the importance of adapting to change. Her discussion, moderated by Tufts trustee Diane Hessan, highlighted key principles that have guided her successful tenure at Fidelity.
A Legacy of Leadership
Johnson’s journey at Fidelity began in 1988, when she joined the firm founded by her grandfather in 1946. Over the years, she has risen through the ranks, demonstrating exceptional leadership and strategic foresight. Since becoming CEO in 2014, Johnson has overseen Fidelity’s impressive growth, with the firm managing $9.8 trillion in assets and executing 2.2 million trades daily. Her leadership has been instrumental in steering Fidelity through an evolving financial landscape.
Embracing a Culture of Innovation
At the heart of Johnson’s investment philosophy is the concept of “scan, try, scale.” This approach encourages managers at Fidelity to continuously scan the industry and societal trends, experiment with new ideas, and scale successful initiatives. Johnson emphasizes the importance of trial and error, noting that not every idea will succeed. However, those that do are tested on a small scale before being expanded, allowing for flexibility and innovation in a rapidly changing market.
Johnson shared an example of Fidelity’s exploration of Bitcoin and blockchain technology around 2012. The initial investigation led to the development of a crypto custody business for institutional investors—an outcome that was not part of their original 52 use cases but proved to be a successful venture. This adaptability highlights Johnson’s approach to finding and capitalizing on emerging opportunities.
Advocating for Women in Financial Services
Johnson also discussed the importance of increasing female representation in financial services. Reflecting on her own experience as an analyst, she highlighted the autonomy and responsibility inherent in such roles. She encouraged women to consider careers in finance, emphasizing the independence and control that come with the job, as well as the potential for significant impact and leadership.
The Value of a Liberal Arts Education
A strong proponent of liberal arts education, Johnson sees it as a valuable foundation for careers in finance. Fidelity’s program for liberal arts graduates underscores the firm’s belief in the value of critical thinking, communication, and continuous learning. Johnson argued that liberal arts students bring a dedication to learning and an ability to ask insightful questions, which are essential skills in the financial industry.
Essential Leadership Traits
Johnson outlined several key traits that define effective leadership at Fidelity. Being “customer obsessed” is paramount, with a focus on delivering the best outcomes for clients. Accountability, cross-organizational thinking, and the ability to embrace candid debate are also critical. Johnson believes that taking smart risks and prioritizing progress over perfection are vital for leadership, along with coaching and empowering team members to reach their full potential.
In summary, Abigail Johnson’s investment philosophy and leadership principles reflect a commitment to innovation, adaptability, and inclusivity. Her approach to managing Fidelity Investments and her emphasis on diverse strategies and perspectives offer valuable lessons for leaders across industries.
