The 10,000 Hour Rule applied to IB

I’ve been thinking about the structured promotion path that exists in IB and the reason for it. The structured 2-3 years as an analyst, 2-3 years as an associate seems overly rigid and sometimes seems to scare off top talent.

When thinking about the hours involved in these 2 year segments, I’ve noticed that it nearly perfectly follows the 10,000 hour rule. An analyst working 80 hours weeks for 2 years will have worked for 8,320 hours. When factoring in a summer stint this number gets strikingly close to 10,000 hours.

Congrats to everyone who completes their analyst position. You have now become a master analyst. (You should probably update your LinkedIn with this title)

 
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MidYearDiscountingIsMyKink:
I’ve been thinking about the structured promotion path that exists in IB and the reason for it. The structured 2-3 years as an analyst, 2-3 years as an associate seems overly rigid and sometimes seems to scare off top talent.

When thinking about the hours involved in these 2 year segments, I’ve noticed that it nearly perfectly follows the 10,000 hour rule. An analyst working 80 hours weeks for 2 years will have worked for 8,320 hours. When factoring in a summer stint this number gets strikingly close to 10,000 hours.

Congrats to everyone who completes their analyst position. You have now become a master analyst. (You should probably update your LinkedIn with this title)

This doesn't exactly apply to IB.

The Association for Psychological Science did a study on this a few years after Outliers came out and found out that the variance for professions is less than 1% as a result of deliberate practice.

http://journals.sagepub.com/doi/abs/10.1177/0956797614535810

"...researchers proposed that individual differences in performance in such domains as music, sports, and games largely reflect individual differences in amount of deliberate practice, which was defined as engagement in structured activities created specifically to improve performance in a domain. This view is a frequent topic of popular-science writing—but is it supported by empirical evidence? To answer this question, we conducted a meta-analysis covering all major domains in which deliberate practice has been investigated. We found that deliberate practice explained 26% of the variance in performance for games, 21% for music, 18% for sports, 4% for education, and less than 1% for professions. We conclude that deliberate practice is important, but not as important as has been argued."

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee
 

That’s an interesting study but I think there are some ambiguities in it. The study is on deliberate practice, appearing to refer to outside activities like self study or self practice. I would say that working as an analyst isn’t deliberate practice to improve performance. Deliberate practice to improve performance would be like taking a modeling course outside of working hours.

The 10,000 hour observation isn’t anything important, just something I found interesting. Maybe I am misinterpreting the study but I would think someone who has been an analyst for 2 years can perform much more than 1% better than a fresh hire.

 

The reason I don't think this works is that unlike, let's say, playing the violin or programming a computer, being an analyst isn't doing the exact same thing for all of those hours. Some is spent in meetings, some on excel, some on formatting, some on whatever. I think it's fair to say that you should be really damn good at excel and PowerPoint though, even if you don't hit 10,000 hours in either of them.

 

The 10,000 hour rule applies to only one particular skill. As an analyst, you're not only learning to be a beast in excel, but you're also working on your ability to sell a product, becoming better at reading/understanding/analyzing financial statements/projections, and also learning about the culture. It's hard to just be "good at finance" like you can be "good at guitar."

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I think the 10 grand rule would only apply to IB for time spent learning things outside of work (there isn't really any) to go the extra mile. Expertise is a comparison, it is all relative to those around you. The time spent outside of work would push you over the edge to beat out the other guys you are working with. Not everyone can be experts because they work 10 thousand hours. There are only so many experts and they are the ones who are either smarter or have put more time in and often both

 

I'll provide a unique response and say thank you for putting in the time to make this contribution. And for my contribution - I don't think it will make them an expert at "investment banking" because of the reasons listed above, but it should make them an expert at "being an analyst", which entails listening during meetings, excel, powerpoint, formatting, etc etc all listed above

 

1) those 10,000 hours need to be spent effectively - it takes grit, challenging yourself on things you're uncomfortable with, for the hour to count (gladwell doesn't write this but similar books will bring it up)

2) time outside of practice matters a well but is not accounted for in the 10,000 - a tiny little insight or aha! here and there while talking to friends or watching a movie... said another way, there is such thing as mental exhaustion and you need to rest...

3) weak feedback mechanism - sports, music, math problems, all have quick feedback mechanisms - when it comes to getting a deal right, timing the market, investing etc.. it can take well over a year before you get your answer...

so yes, you get good at being an IB analyst, not a banker..

 

You're massively overestimating the time most IBers spend doing actual work as to wasting time. Also, if you spread comps for 10,000 hours you will indeed be a comp spreading beast, but not necessarily an IBanking beast.

Overall, 10K hours is also arbitrary bullshit - though I do admire the emphasis on practice and determination. Just focus as much as you can on what you hope to accomplish, and you will get as much as your focus deserves

 

My reaction to the "10,000 hours", is there must be more efficient ways of learning and mastering a skill. I do like the notion of persistence, but I think it is one piece of the equation and one should also incorporate efficiency. If it takes one 10,000 hours to be really good at something, then the method is probably not ideal or it's not worth doing. I also don't believe it applies to investment banking because it isn't categorically a skill. Maybe comps or negotiation could be broken out, but not the whole occupation at any title level. At the analyst level, it isn't continuous work so although it was an interesting notion, especially if you subscribe to "10,000" hours, I don't believe it applies.

 

I never read the book but from what i've seen in life, there's exponential time demands for each level of mastery and most of the gains are in the first 2,000 for 80% of the benefit. Maybe not master but more than skilled enough to hang your hat on. From there, each additional hour gets less benefit and then to get the last 20% of mastery, you will probably have to be putting in the other 8,000 hours.

I've done muay time for like over 10 years, most of the quickest gains were in the first 2-3 years. After that, the last 7-8 years have been about refining that shit to perfection. Very miniscule tweaks that only another master would notice, e.g. are your toes twisting at the right height during a punch or am I balancing my weight correctly while I'm kneeing from the clench? Even then, I feel my rate of new learning in this area has slowed to nearly nothing.

I really don't see the need to go beyond pretty good in most cases. So it's probably not really worth it to climb that wall to mastery, unless you have a real driving desire for perfection or just enjoy doing it regardless.

 
cibo:
from what i've seen in life, there's exponential time demands for each level of mastery and most of the gains are in the first 2,000 for 80% of the benefit. Maybe not master but more than skilled enough to hang your hat on.

This is exactly what I thought. I don't want to be an expert, just good enough to not look like a fool. Gladwell should've written about when marginal utility for a given activity begins increasing at an decreasing rate.

Side note: I own the book and it's an alright read (though, I recommend Gladwell's The Tipping Point first).

I'll do what I can to help ya'll. But, the game's out there, and it's play or get played.
 

Thanks again for not being so cool. I'm getting used to this.

I have always thought of Warren Buffet's ability to read and analyse financial statements, understanding businesses and judging their future, ie. creating a mental picture of how the company will look in 20 years.

I think that is a skill which, if perfected, will pay off handsomely.

Another ability I would think is crucial is to read other people's intentions and trustworthyness. Sort of like Paul Eckman with microexpressions.

Although important I wouldn't give so much attention to computer skills or writing skills.

 
ChimpBanker:

Although important I wouldn't give so much attention to computer skills or writing skills.

seems like you don't have either from the thread adapt or die linked to

speed boost blaze
 
torchic:
ChimpBanker:

Although important I wouldn't give so much attention to computer skills or writing skills.

seems like you don't have either from the thread adapt or die linked to

If you read that, you should have seen I used to be a fine economic journalist, in spanish. English is my second language.
 

OP, read your other thread. If this is all true (you'll have to excuse my admittedly gigantic skepticism) - you sound like you've accomplished quite a bit. But I think you need to spend a bit more time learning about what is you intend to do. It's not quite as easy as it would seem. It's great that you have these aspirations, but I think you need to focus heavily on your soft skills...because that will absolutely hold you back. To bring this full circle..if I were you, I'd spend about 10k hours on reading, writing, and networking/developing your people skills.

"When you stop striving for perfection, you might as well be dead."
 
PeteMullersKeyboard:

OP, read your other thread. If this is all true (you'll have to excuse my admittedly gigantic skepticism) - you sound like you've accomplished quite a bit. But I think you need to spend a bit more time learning about what is you intend to do. It's not quite as easy as it would seem. It's great that you have these aspirations, but I think you need to focus heavily on your soft skills...because that will absolutely hold you back. To bring this full circle..if I were you, I'd spend about 10k hours on reading, writing, and networking/developing your people skills.

I came in here thinking I would get some good advice, which I have. Only I didn't expect to get bullied at.
 

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Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 

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