Bill Gross, a man who had founded Pacific Investment Management Company, has had quite a year. For over 40 years, he built “Pimco” into the largest bonds fund in existence, which managed over $270 billion dollars. This proved large enough of a sum for the US Government to get involved with Bill Gross’s sudden departure in early 2015 when he departed PIMCO. By some accounts, he left the company to avoid embarrassment, and by his own account, he left because he was fired. Why?
It’s funny how a multi trillion dollar company, with billions of dollars at stake has a way of amplifying inner-office politics. Despite being the founder, PIMCO was acquired by a global German financial company, and operated as an autonomous sub-unit. Despite being a founder, he would be dealing with a CEO, President, and unit chiefs.
When the CEO, Mohamed A. El-Erian stepped down in 2014, the dynamics at the top apparently changed, leaving Mr. Gross with less sway (one can assume) than before. Bill Gross had suspected certain employees of leaking information to competitors and to the press. Naturally, he took this personally and made it a crucial agenda item to find and eliminate these people. When he had identified some of those he felt responsible (not only for the leaked information, but also for those that had portrayed him in a bad light to the press), he received resistance from the top when he moved to have them eliminated.
Despite almost daily appearances on financial sector television shows regarding the bonds market, multiple books distributing his distilled bond investment wisdom, and industry recognition, Bill Gross claims that he was fired. The move was so threatening to Pimco that US Government became involved to try and avoid market destabilization. PIMCO was arguably put through the ringer. The bond fund that Gross managed had client money leaving en mass, and now stands at half of what it did before the incident. Further, the company that Bill Gross joined (Janus Capital Group) had a market cap that exploded, gaining nearly a billion dollars.
The story of Mr. Gross, PIMCO and Janus has a lot of lessons. However, for the small business owner, one can gleam that this is a reminder of just how important relationships and trust can be. From your business partners to your employees, the sum of the relationships is clearly worth more than the current value of your company.