Know Thy self or go Home

Mean Street: Know Thyself. Or Go Home.
Posted by Evan Newmark
I left Goldman Sachs in 1988, got an MBA and returned in 1992.

A good friend calls my MBA the most expensive degree in the history of higher education. “If you had stayed at Goldman, you would have made partner and $50 million in the IPO…At least, $50 million.”

A missed opportunity? Perhaps. But I never lost any sleep over it. I always saw my career as a long journey with many side journeys along the way.

With layoffs now sweeping Wall Street, some of you may be wondering about your own future. Let me offer some advice. Or rather let Socrates offer you some: Gnothi Seauton. Know thyself. Do that and you won’t go too far wrong on Wall Street or in life.


There are two approaches to a Wall Street career: The specialist and the generalist. You ought to know which approach best suits you. The hardest thing is to be someone you’re not.

The way of the specialist is dedication. He sticks to one thing and gets really good at it. Year in and year out. Up and down markets. A long single career arc as a treasury-bill trader, M&A banker or research analyst. The specialist needs focus, stamina and patience. His reward is that he can take his career easily from firm to firm.

The way of the generalist is less secure. He has several careers. Four years at one thing, seven at another. The M&A banker who joins the private equity shop. The research analyst turned hedge fund investor. The generalist needs to be versatile and open to failure. He also requires more luck than the specialist to find the right roles, mentors and institutions.

Either way can take you to the top. Specialist? Goldman Sachs CEO Lloyd Blankfein, a commodities trader. Generalist? John Thain, the CEO of Merrill Lynch who had stints as a Goldman banker, mortgage securities trader and CFO.

The careers of most Wall Street professionals fall out along a spectrum between specialist and generalist. But if you want to play the safe odds on Wall Street, be a specialist. It’s easy for company recruiters and headhunters to put a round peg in an open round hole.

Me? I’m with the square pegs. I’ve had runs in M&A, private equity, managing advisory practices and an overseas office. I like new experiences and learning. And I’m willing to live with the volatility such as unemployment that accompanies the generalist career.

Where do you fit in? To help you better know yourself, here’s a short quiz. Add up the points for each answer selected:

A. In your free time, you enjoy reading: 1) The Robb Report 2) Research reports 3) The Economist 4) Albert Camus

B. You discover that your colleague was paid a 50% bigger bonus than you. You: 1) Quit and anonymously call the SEC on your colleague 2)Threaten to quit and demand a guarantee 3) Have constructive face-to-face with boss and ask for Hong Kong posting 4) Shrug your shoulders and go smoke a cigarette

C. The following describes your relationship with money: 1) My only friend 2) My best friend 3) A good friend 4) An earthly distraction

D. The secret of your success is: 1) You 2) Hard work and ambition 3) Hard work and good luck 4) Fate

E. Your ideal institution is: 1) Galt’s Gulch 2) The old Donaldson, Lufkin, Jenrette 3) Goldman Sachs 4) Do not believe in any

F. Your hero is: 1) Michael Milken of Drexel Burnham Lambert 2) Brian Hunter of Amaranth 3) John L. Weinberg of Goldman Sachs 4) Mahatma Gandhi of India

If you scored:

8 points or less: You shouldn’t be working on Wall Street. You should be running Wall Street. Immediately start your own firm.

9-16 points: You’re a classic Wall Street specialist. There’s always a job for you even if it’s reduced pay at a second-tier European or Japanese bank.

17-21 points: Welcome to my world. There’s a job out there for you, but you’ll have to search high and low. Rare is the institution that believes you can love both poetry and derivatives.

More than 21 points: Give up on Wall Street. Take first Air France flight to Paris to live as bohemian in a garret flat.

For more insight on a Wall Street career. Read Jonathan Knee’s recent WSJ article.


By JONATHAN A. KNEE
April 23, 2008; Page A15

When the music of financial-services contraction stops, there will be a lot of investment bankers without seats. Merrill Lynch alone recently said it would lay off another 2,900 people, on top of the 1,100 jobs already eliminated this year. The total number of eliminated banking jobs is likely to dwarf the 90,000 over the two years following the Internet bust of 2000.

For many of these bankers, getting fired could be the best thing that ever happened to them.

Rainer Maria Rilke, in "Letters to a Young Poet," offers some words of wisdom that the newly jobless would do well to consider: "This most of all: ask yourself in the stillest hour of your night: must I write?" Rilke warned of the hardships of his chosen craft, arguing that if the poet could even imagine living without writing, he would be better off doing so.

This kind of profound introspection is rarely undertaken by those young professionals who march off to investment banking careers based more on what is expected of them than on any deep commitment to the field. They should take a moment to ask themselves: Must I bank?

Such introspection, even if it comes late in life, can lead to greater fulfillment than scrambling for the next best investment banking job that might still be available. I wrote in my last book that the opportunity to really pause and face a world where the next step has not been preordained can be a profoundly cathartic learning experience. Judging from the emails I received after the last bust, many may have benefited from doing just that.

Of course, there are real limits to Rilke's practical applicability to finance-career counseling. Introspection is easier said than done. For the hypercompetitive set that is overrepresented in the finance sector, life's goals have often been defined in terms of obtaining the highest grades, getting into the best schools, and securing the hottest jobs. Thus the simple exhortation to look inside for your true calling can seem a little overwhelming.

An important first step is to examine the salient characteristics of the key types of job opportunities. When business-school students announce that they have narrowed down their career focus to investment banking, private equity or a high-growth start-up company, in reality they have not narrowed their options down at all. These three kinds of jobs are all distinct categories of occupations, each of which draw on different talents and in which different kinds of people are likely to thrive.

Like all service professions, investment banking is fundamentally a sales job. Individuals who feed on human interaction, and have natural empathy (sales is about putting yourself in your customer's shoes), do well in sales. Being good with numbers, often assumed to be the key to banking success, will be of little use in getting a big office with a view if you do not have sales aptitude.

Private equity, like hedge funds and other investing jobs, is essentially analytical. These are solitary professions, and one is judged on the quality of the analysis produced. The quality of this analysis is in turn assessed on highly quantifiable metrics – like whether the stock you recommended went up or if the investment in a private company you sponsored turned out well. If the classic sales person is a deeply social being, the typical analytical person is a bit of a loner.

Working at a start-up or any other company is an operational job. Operators must communicate and "sell," both internally and externally, to effectively function in their positions. Operators must also be "analytical" enough to attain the domain expertise needed to achieve credibility in their operating role.

But the defining characteristic of the operating role is a commitment to a continuing level of involvement with the organization's objectives. A sales person makes a sale and moves on. Analytical people make a call or do a trade, and reap whatever rewards that insight yields. Operators are in it for the long haul.

Most jobs fall into one of these three categories: sales, analytical or operational. The odds that the same person would prosper equally in more than one of these environments are low. The personal qualities that each position draws upon are simply too different. Some Rilkesque introspection in order to identify which category would likely yield the greatest personal satisfaction is an excellent investment.

Rilke's fundamental insight is indisputable: Dedicating oneself to any profession, whether poetry or otherwise, should not be undertaken lightly. Doing so would ignore the unique gifts that each of us has to offer. It would also meaningfully reduce our chances of ultimate personal fulfillment.

Whatever the other negative ramifications of the current financial crisis, if bankers use it as an opportunity to ask themselves these questions they will likely be happier and, if they decide to stay in the profession, better bankers as well.

Mr. Knee, adjunct professor and director of the Media Program at Columbia Business School, is the author of "The Accidental Investment Banker: Inside the Decade that Transformed Wall Street" (Random House, 2007).