Tammira Philippe: A Modern Leader (Season 3, Episode 6)

Welcome to Take the Long View with Matt Hall. This is a podcast to reframe the way you think about your money, emotion, and time. The goal: helping you put the odds of long-term success on your side. I want to introduce you to a person and a company I admire. Bridgeway is the name of the company and Tamara Philippe is the CEO and the person. What's in it for you? An inspiring set of stories all connected to paving a unique path, making your own choices, and Bridgeway and Tamara are both originals, and I'm excited for you to know more about both. Tamara Philippe is president and CEO of Bridgeway Capital Management. She is a member of the firm's board of directors, president of Bridgeway Funds, and serves on various internal committees. P.S., there aren't many female CEOs of mutual fund companies in the world. Bridgeway is a leader in relational investing, a statistical evidence-based approach that unites results for investors and returns for humanity by innovating in asset management and donating 50% of the firm's earnings to organizations making a positive impact on the world. Prior to becoming president, Tamara led strategy and operations projects at Bridgeway for 5 years and headed the client service and marketing groups for another 6 years. She's also a CFA charterholder, which is no small feat. And prior to Bridgeway, Tamara worked in strategy consulting with McKinsey and Company. She earned an MBA from Stanford's Graduate School of Business and graduated summa cum laude with a BS in computer science from Texas A&M University. Beyond Bridgeway, Tamara has vast board experience. For example, the Stanford GSB Management Board and the Investment Committee of the Terry Foundation Foundation, a scholarship provider that supported her undergraduate education. She is passionate about promoting education and social justice, two areas that are fulfilled through her professional work and volunteer service. Tamra lives in her hometown of Houston with her French husband and two teenagers. Welcome, Tamra Philippe.

Thank you, Matt. You know, I'm excited to be here. It's great.

Well, I think your story, your personal story and Bridgeway's story will really provide inspiration for our listeners. Let's go back to sort of where your journey started well before the resume and talk to me about Channelview, Texas. That's where you're from, right?

That's right. And it's exactly what it sounds like. It's a small suburb right outside of Houston, Texas, with a view of the Houston Ship Channel. And I love that you referred to me as original because What's interesting about that is I've never really felt like I fit in anywhere. And a lot of people like me, one part of my story is that I'm the first in my family to go to college. And a lot of people like me have what's called imposter syndrome. So my whole life I've felt original. It felt like I never really fit anywhere, that I've straddled a couple of different worlds, uh, in Channelview. I was born to a 19-year-old mom, the second of two children. I'm one of three. I have two brothers. And, you know, my earliest memory is that I wanted to become the first woman president of the United States. Because when I found out that there hadn't been one, I just thought there had to be one. I don't know that there are any other people from Channelview, Texas who at one point wanted to become the President of the United States, but that was me.

I haven't been to Channelview, and I haven't even been to Texas A&M, but I don't know how many people from Channelview and from A&M end up working as McKinsey consultants. How did that happen? How did you tell yourself, or even going back to when you chose computer science as an undergraduate degree, how'd that happen?

Well, in my life, everything has just been a series of, like, making the best choice that I could with the information available to me and just trying to pick something that would move me forward to the next goal. So early on, like I mentioned, I thought I needed to become the first woman president. So I thought that meant that I better do, like, the best I possibly could in school. So that's what I did. Around high school, I realized that probably my dream wasn't to become the first president. My interests were in other areas. And in fact, just last month I was talking to my mom about this and trying to get her help to remember, like, when did I first have this dream and what was it about? And what do you remember about it, Mom? And she's like, oh yeah, I always knew that you wouldn't actually choose to become president because you were always too principled for that. So fast forward, I got to A&M. I, like I said, was the first person in my family to go to college. I picked my major very simply. I wanted to do the hardest thing available, but I wanted to do something that I was interested in. I had liked chemistry in high school, so I wanted to be to do engineering 'cause I'd mainly heard that that was the hardest thing and I thought I could do it 'cause I'd done well in math in high school and English too. But I picked chemical engineering and then I took chem labs, multiple ones first semester, and then I didn't like it at all. So I was like, oh, we gotta pick a different major. And my blinding brilliant insight at that point was computers are gonna be important in the future and I like doing things with computers. So, I'll switch to computer science and engineering.

Hmm. McKinsey, I think, is known as one of the most selective consulting firms in the world. How did you find yourself there?

So everything just follows from, like I said, the first choice. So I chose computer science. Even when I chose computer science and engineering, I never thought that I would end up working in that field, but I didn't know what I was going to do later. I just, again, thought, let me do the hardest thing. So fast forward, it's junior year, and I needed to get an internship because that's what people told me I needed to do. And I heard about consulting as a career. Of course, that was the first I'd ever heard of that. But because I was studying computer science, I spent my summer working for what then was called Andersen Consulting, which is now called Accenture, doing programming. But that's when I had the consulting bug, and the idea was you get to work on a lot of different things. And in fact, in my mind, it was you work on a lot of different things, you probably get to travel, and you don't actually have to choose what you're going to do for the rest of your life until you figure out more things. So I, I had this idea going into my senior year in college that I would be a consultant. And McKinsey came on campus, and in fact, I ended up being the one person that they hired out of 40,000 or 50,000 students at Texas A&M that year. And, you know, that's how I ended up at McKinsey. I wanted to travel. I wanted to work on a bunch of different things and learn as much as I could until I would have to figure out what to do with the rest of my life.

When you think back about your experience with McKinsey, what do you remember, or how did it impact the way you think?

Well, there's so many interesting aspects of working at McKinsey that are still a big part of where my life has led today. One is also central to why I studied computer science, which is I just really love solving problems. And what McKinsey taught me is it gave me a great set of tools and skills that I still use every single day today to solve problems. It also was very big picture and strategic, which has always been sort of a natural skill set of mine or a natural interest of mine, which is how do you see the reality of the present but make that connection to the future and be able to think further out and take the long view like you talk about on this podcast. And so that, that's something that I've always been innately good at is being in the present, but seeing these connections to how we can go from the present to the future and then being able to kind of make that happen.

Because both of us work in money but in different ways, did you ever think about the cost of your MBA and the return on that investment as you imagined yourself going to business school?

That is such a good question. And in fact, I still interview students that are considering going to Stanford today. And it seems like at the end of the interview, they get to ask me questions. And that's one of the most common questions. But putting myself back there, at that point, I had worked with several people who had worked for a little while, gone to get their MBAs, and then come back to McKinsey or come to McKinsey for the first time in many cases. And none of them had any doubts about their experiences in terms of whether their MBA was worth it. So I really didn't ask that question very hard, but I never looked at it in pure financial terms. Like, would this MBA, you know, add up the dollars of cost of the MBA and then do the net present value of my future dollars of income and see if the pure financial equation worked out because I always saw, and it's really how I look at life. I don't think life is all about a pure financial equation. It's really about becoming the best human being that you can be and being able to give to the world the best of yourself.

Yeah. So interesting though, isn't it, that the answer is, um, that ultimately it's a combination of qualitative and quantitative. You know, it's not just one or the other. It's a little bit more gray.

Mm-hmm.

And I think that connects to several other key decisions we'll talk about. But through your experience at McKinsey, you end up— let's shift a little bit to Bridgeway, which I think the company you lead is a rare bird. I mean, there just aren't many companies doing what you're doing. And we can talk about a few of the areas where you really stand out. But how did you find your way to Bridgeway, or how did they find you?

I knew a lot about the kind of company that I wanted to work for, and I had encountered this big idea while I was at Stanford that was truly about who I am intrinsically as a person, which is this idea of being able to combine this focus in a for-profit organization, you know, really making a big difference in the world providing value to clients or customers and earning a profit for that. But I wanted to simultaneously in my personal life be able to also be giving back to the community the, the whole time. And lucky for me, right about the time that I announced— there's a whole process at McKinsey, they're very good at this in terms of when you decide you want to exit the firm— right about the time that I announced to one of my earliest mentors that I wanted to leave, she had just been contacted by another former McKinsey person, and he was looking for someone to join what I now know is Bridgeway. And she shared the job description with me, and I literally read it, and it was like, they need me, like they're looking for me. And, you know, the novel idea to me was this company was like, hey, We're gonna do a great job for clients, and when we do this great job, we're going to then be able to have a big impact in the world and donate 50% of our profits. And that idea was game-changing for me, that you could build a company that way, that you could do these two things simultaneously. And in fact, I was a little skeptical at first that that was even possible. And as I started to talk to people, They were skeptical too. I think intrigued, but skeptical. Like, can you really build a company that way? And I thought, I don't know, but it looks like they need me. And I would really like to spend the rest of my career trying to make that happen.

Yes. Well, okay, let's, let's stay on this for just a second because donating a portion of your profits to charity is rare. but it's especially unique in the investment industry. And as I've mentioned to you, you know, there are, you know, a few other firms who do something similar, but Bridgeway has a commitment that I don't think really has a peer. And as I think about it, and I imagine John Montgomery, who founded Bridgeway 28 years ago, what do you think was the motivation for him to write this into the bylaws or the governance or the structure of the company?

Well, this is what's really interesting, is that knowing yourself, I think, is one of the most important things to do if you're gonna start a company or you're gonna start anything. You know, all of us are entrepreneurs in different ways. Some of us start whole organizations, but even within large organizations, you know, if you're any kind of success, you're an entrepreneur who's starting something often, whether it be a new project or a new part of the business. And I think when you're gonna start something, knowing yourself is crucial. And one thing that John Montgomery knew about himself when he was starting Bridgeway, and that I knew about myself when I joined Bridgeway, and really, I kind of go back to my earliest memory, I've always known about myself is, We know what's enough. And I love in our industry, Jack Bogle wrote a whole book about enough, right? So John, when he started Bridgeway, he did the business plan, you know, like all great MBA students can do. And he thought about if we did a great job for clients, what the profitability of the firm could be. And you know what the financial success for him and his family could be if he did that. And he thought, We already have what we need, and given my salary that I can earn at Bridgeway for doing a good job, I'll have enough. So instead of waiting till the end of my life to donate all this money back, which is what a lot of successful entrepreneurs do, what if we did something really different? What if we tried to build a whole different model for how a business can be run and that we, Donate 50% of the profits along the way. And then we can combat the thing that kept John and frankly had kept me from ever considering financial services as a career before is that we can be a different kind of firm that attracts different kind of people that combats a lot of the problems in our industry of greed and people who focus on their own intellectual curiosity as their reason for being rather than the nobility of the stewardship that we have for clients and always putting that first. So John is one of— actually, he is the most intentional person I've ever met. And the other thing that he's really focused on is how to take those good intentions or very thoughtful plans and turn them into action. And it, you know, was really great for me when we came together in 2005 and I got to be one of those people who really could take this big idea of running an investment management firm a completely different way and being able to do what we now call relational investing, which is how do we deliver extraordinary results for investors and returns for humanity.

I don't think anybody else does that.

I wanna say, one, I think there's a lot of people out there that want to do that. And one of the biggest ideas behind Bridgeway is that We want more people to do that, to realize they can do that. And that's one of the reasons why it's so exciting for me to be talking to you today is that we want to share these ideas. One of my favorite concepts that I encountered at Stanford Business School was this idea of being collaboratively competitive. So hopefully many of your listeners are not competitors of ours, so we can just collaborate and share these ideas. But even when we're competing, I like to find ways that we can collaborate on ideas that matter and that everybody should be thinking about how to implement in their lives and in their organizations. And this is one of them, which is— Daniel Pink has written a lot about this idea of what truly motivates us, and particularly knowledge workers, and it's mastery, autonomy, and purpose. And this idea of having a purpose in what we do every single day in serving clients, that we are really trying to help them reach financial goals, which are always about making something that people have decided is the kind of life that they want to live, right? So that's what we do for clients, and we want to build that trust with clients. More and more of them so that we can help them do that. And then with the people that work at Bridgeway, which we often refer to as colleagues, we call all people who work at Bridgeway—

Yeah, you call everybody partners.

Long-term staff members are all called partners.

No one does that.

I don't hear people do that. And we have our own special meaning for what it means to be a partner at Bridgeway, and it's about commitment, but also the community. You know, we want to have this huge impact on the community at the same time, and all three things go together. When we're really doing a great job for clients, then we can get rewarded for that, and we can give back to the people that work at Bridgeway and the community. So we want people to realize that there are extraordinary different ways that you can run a business that have huge benefits that everybody should try. I hope that we can share more about what we're doing and it'll spark some ideas for people to say, you know what, I can do that one thing to run my business or my organization or my team a little bit differently. Mm-hmm. So you wanted to know about the compensation?

Yeah, I do wanna know about the compensation piece because you have this compensation limit, which in financial services, compensation is typically the kind of thing that the public thinks is completely out of whack. You all have a structure since the very early days, I think, that inspired maybe by Ben Jerry's has a 7-to-1 or some kind of structure that prevents the highest paid person from making some multiple more than the lowest paid person. Is that still a big part of the culture?

Absolutely, Matt. And it's important to realize that absolutely everything we do at Bridgeway is about building an enduring firm that can be around private and independent into perpetuity, striving to unite results for investors and returns for humanity. And we are doing something extraordinary, which means we need extraordinary people that are committed to that. And what we do with compensation of having this connection and this raising ratio to what the top people can make in relation to other people in the organization makes sure that we attract and retain extraordinary people who want to be all about what we're about. And that's what we do. That's how we think about everything at Bridgeway, and that's how we think about compensation. Hmm.

How has being married to a Frenchman changed you?

Well, I love that question. And it's interesting because when you live with someone and try to create a marriage every single day that is really strong, it requires a lot of adaptation. It's very present all the time, the different aspects of our cultures where we're very similar and aligned despite the fact that we grew up in different countries and then where we're different. And I find that that has really helped me as a professional. One of the things that Bridgeway is extraordinary at, it's one of the reasons why I joined Bridgeway, it's one of the reasons why I live in Houston, Texas, is our commitment to diversity, equity, and inclusion. So hopefully some of your listeners know Houston is absolutely the most diverse major city in our country. And it's kind of a well-kept secret, but it's one of the things that's extraordinary about our community. It's one of the things that's extraordinary about Bridgeway as a firm in our industry. 67% of our professionals identify as women or a person of color. And 67%, I think the stats for our industry are below 20%. Uh, so we've been very committed to the idea of, like I said, building a different kind of firm. To do that, you have to attract and retain different kinds of people. We look at diversity in terms of cognitive diversity, like how each of us think, and we do lots of things around that. We also look at diversity in terms of identity diversity, Scott Page is one of my favorite thinkers and writers on this topic. His book, The Diversity Bonus, really, I guess, illuminated the idea of striving and seeking both cognitive and identity diversity and how those are reinforcing. We see that every day in the team that we've built at Bridgeway and how that causes us to approach problems differently and to really want to stand out and build relationships with clients and with each other and with the community in a very different way.

So impressive. Okay, back to you again for just a second. As a mom of two teenagers, what do you teach your kids about money, especially with the background that you've shared with us and knowing how hard you have worked and the way you've sort of created a path for yourself. How do you help them understand their position in the world and how do you help teach them lessons around money?

I love this question and I hope all the parents, current parents of teenagers and those who've had teenagers, many of which told me this, but at least currently, with 2 teenagers, you asking me about teaching them something makes me want to laugh out loud because being the parent of teenagers is absolutely the hardest and most humbling thing that I have ever done because most days I don't feel like I'm teaching them anything, that there's any chance that they will learn anything new from me. I found that life, at least my life, is a little bit of a roller coaster. You know, I've had moments where I felt like at a higher peak in my life, like at the top of my game, a little bit higher than I am right now. Right now I feel like I've gone down that dip in the roller coaster, and I'm just coming out of the climb with, you know, a 14-year-old and an almost 17-year-old, 17-year-old girl, 14-year-old boy. But I did, based on advice from lots of people, try to teach them things when they were younger about money. And from what I hear from other former parents of teenagers who have had people survive the teenage years and become young adults, that they are watching what I'm doing. So hopefully I'm imparting things by example today, but I wanna give two book recommendations that were recommendations to me. I'm very worried, given the background that I mentioned, I couldn't exactly raise my kids the same way I was raised because we are not in the same situation that I was in. I'm first person to go to college. Well, neither of my kids are gonna be the first person in their family to go to college. That's just one simple example. As I've heard, most parents, not just people like me, are worried about their children being spoiled. So the best book that I read on this is called The Opposite of Spoiled by Ron Lieber, who Matt, I know you've talked about on prior podcasts, so you're aware of his work. I read that book. It changed the way I thought about what I should do with my kids that's very different than the way I was raised. And one example is that I really wasn't taught anything directly about money and using money and managing my own money until I went to college. And then my parents did help me a little bit, but, you know, I had a full scholarship to college on academics, and my mom did help me think about getting credit cards and paying them off every month. My parents always lived within their means. And that is really my relationship with money is all about, you should always live within your means. And the thing I learned was that you don't need a lot of money to be happy. Like that's the gift that I got growing up the way I did was I grew up with a lot of happy people. Well-adjusted people. And what I picked up was it's really about your character and how hard you work, not how much money you make. And I wanted to impart that to my kids. Opposite of spoiled encouraged me, and I decided to do something very different where I do give my kids an allowance every week, and they have bank accounts, which I didn't have a bank account until I went off to college, and we are learning how to manage money that way. And I've really enjoyed having them be in a controlled environment that I'm guiding them through where they're starting to learn to manage their own money at an earlier age. Mm-hmm.

Yeah. So it sounds like being a mom of teenagers is in some ways harder than running a $5 billion investment management firm. As I think about you though, running this business, I think you're such a great example of what I think, anyway, a modern leader can be. You know, some people lead by fear or intimidation. And when I think of you, I think of you as really the glue that can bring a lot of people together. There's a funny story I know you like to tell sometimes, like, about our project we worked on. But for the listeners who have now heard what a dynamo you are, You'll get a kick out of knowing that at one point, I was frustrated with the pace of a project Tamara and I were working on, and I called, and during our conversation, I said, "Am I talking to the right person?" And, you know, knowing what you know about Tamara now, you can bet she laughed that off and assured me I was, in fact, talking to the right person. But I have to believe that that challenge, knowing what I know about you, was in some ways just more rocket fuel. And so I just, I'm so impressed by the way you lead and bring people together. You make all of this sound so easy, you know, compensation limits and charitable giving and running an evidence-based investment management firm. It sounds like, you know, my firm, we tried to call, Rick Hill and I, when we started, we called our idea and vision the Island of Idealism. And I don't think we even had many of the sort of brave ideas that contribute not just to our firm and our clients, but to society. And that's one of the things that I think is so impressive about Bridgeway is you make leading an original firm look very easy.

Well, Matt, just going back to the story that you were talking about, am I talking to the right person? Like, I remember vividly that I laughed out loud when you asked me that question, and I just wanna laugh out loud right now because that is an area that I have never lacked confidence in, even from the earliest days that I can remember. I don't know why. Some things about ourselves, we're just born that way. And I'm lucky enough to still have both parents. And my mother says, "What do you mean? You pretty much raised yourself. You were just born that way." I call her up and I ask her things like, "When did this happen?" And she's like, "I don't know. You were just born that way." And so I've always seen myself and wanted to be and just instinctively been a leader. And what has happened is that my definition and my understanding of leadership has evolved over time. And one of the greatest things that I get to do almost every year is to interview high school seniors for the scholarship. That I had to college, and that scholarship is based on academics, leadership potential, and demonstrated leadership, and financial need. I've been doing this for 20+ years now, so I get to hear what high school seniors think and know about leadership. The most common answer, like almost everybody says it, is that you need to lead by example. Right? And that is so true. And that, I mean, I probably said that in my interview for the scholarship, and that has persisted. Absolutely. And the most important thing as a leader is that people trust you. They place their trust in you. They will trust your judgment when you make hard choices. And they will trust your leadership and follow you. So as a leader, what I think about a lot more now, and this is something I did not know in high school, this is something I know now based on experience, is that my number one job as I look forward is how can I build more and more trust? And I think that comes down to character and competence, right? You have to be good at what you're doing. Their trust, people's trust in you, should be based on real reasons why they should trust you, but it's also communication. What are you telling people? Are you being transparent with them? People may be able to observe. This is where I find the lead by example definition to be true, but lacking in entirety of what leadership is all about. So you have to have character, you have to have competence or credibility, and then you have to have communication. I have to be in relationship to you. I have to be telling you about what I'm thinking, also what I'm fearing, what I do know and what I don't know. It's that that forms the basis of trust. So when I— bringing it back, my personal definition of leadership When the high school students talk to me, I give them a break, but this is how a high school student stands out when they tell me their definition of leadership is it's not only lead by example, but you have to be leading somewhere. You have to have a vision to go somewhere different than where you are today. Leadership is about going somewhere different, changing the present reality, based on where we need to be in the future. And that is something I've always thrived and lived in that place in between the present reality. And I've been drawn to thinking and looking long-term and saying, where is the reality going and how do we get from here to there? And how can I be a part of a team, be a rockstar teammate, and build trust and build followers, be a follower if I need to be, but to get from our present reality to a better future. That's to me a lot about what it means to lead my firm, but, you know, even on a much broader scale, what does it mean to lead our world from where we are today to where we need to be in the future.

Tamara, you and Bridgeway have so many unique perspectives about how to run your organization. How do you think about the future and what we need more or less of?

Well, one idea that is really what drew me to Bridgeway and that I still feel like is conventional wisdom out there that I just wanna turn on its head is this idea that people are like striving for work-life balance. And I think that's completely wrong.

Mm-hmm. Like, you don't like, you don't like that balance is boring.

And frankly, I think impossible. I think my mom told me that like, I've never had balance in my entire life and I'm pretty sure I won't ever. I'm really focused and what I saw in Bridgeway that made me want to come here and want to make it a bigger reality that more people can be a part of is doing our life's work 100%. That our lives, we spend so much of our lives in work. And, you know, if we're trying to balance, like our work is not in harmony with our life outside of work, like that's all wrong. The idea is that we have to reframe how we think about our work. And I, I've done this successfully most of the time in my career. When I find myself off track, this is where, this is where I find myself is thinking about my work and finding the things in my work where I am really expressing my values and I'm really doing things that are in harmony with what my life goals are. And my favorite example of this is to think about just anyone, and I work with several colleagues at Bridgeway who just come to work every day and they are excellent at what they're doing. They are trying to be the best in the world. My executive assistant is like this. She is absolutely trying to be the best executive assistant in the world. When I like close my eyes and think of what the definition of excellence is, the image of Her comes into my head. I have another coworker that she cannot not do. I mean, she cannot give you something that is not excellent by her standards. And that's where you might be doing something boring, like you have to enter all the assets into the database, right? But you reframe that for yourself and think about, I'm doing things excellently. And this idea of doing our life's work 100%, I think, needs to replace the idea of work-life balance. And, you know, that area of work-life balance, a lot of people try to talk about that as like, that's the, the secret to solving our gender imbalance problem in the workplace and all of that. No, it's, Everybody doing their life's work 100%. And when we foster environments that make that happen, that's good for men, that's good for women, that's good for the underrepresented minorities in our organization. And that's what we need to be striving for.

Hmm. Tamara, if people are inspired by your story and the Bridgeway story, where can they learn more about you?

All the normal places. Bridgeway.com, absolutely. I'm also on LinkedIn and happy to connect with people there. And I'm also on Twitter. And my future is about really trying to communicate more in different ways to really stretch myself even more on being able to share ideas, to take complex concepts and my personal experiences and my experiences as a leader and as a difference maker and an original, and hopefully put that more out into the world so other people can pick up nuggets that will help them in their lives and to build organizations and communities that are really the kinds of places that we all want to live and work in and leave for future generations.

Great. Thank you, Tamara.

Thank you, Matt.

In what ways are you an original? Please note, the information shared in this podcast is not intended as advice. The intent is to share meaningful experiences. I am likely not your advisor, nor wealth manager, nor financial planner, and my opinions are my own and not necessarily shared by Hill Investment Group. Investing involves risk. Consult a professional before implementing an investment strategy. Thank you.