I’ve been reading bios of a few prominent executives and have found the trajectory each takes to get to their current seat to be really fascinating. This is not to say that many or even any of these paths are straight line or replicable, but what each has in common is that at some point the individual had to take a step back and begin to examine the broader picture in order to begin being groomed by upper management for these positions.
For any of the more tenured professionals here - regardless of your industry - what are some steps you have either taken or observed in order to begin assuming more responsibility. What skills (I.e., politicking, people management, becoming a specialist) are the most common amongst those who have broken out of the inner cogs of a large corporation?
It’s a good question. The faster you learn what each cog does and how they work together, more of the bigger picture is revealed. IMO higher-level thinking demonstrates a deep(er) understanding of the big picture at any moment in time.
I think Edifice actually gives really exceptional advice here. In my experience, you can never really start out by seeing the bigger picture. You have to learn the pieces by focusing on each one literally one by one as you go through a process. The more processes (experience) you gain, the more pieces you understand until ultimately you can “see the bigger picture.” This is a bit nebulous, so I’ll explain it in M&A / Deal terms.
The first time an analyst goes through a deal, they know almost nothing. They end up spending the majority of their time learning / perfecting a financial model, organizing data, formatting, or completing a task. They learn how to do these things, but they miss out on all the other parts of the deal because they are overwhelmed.
The second time through, the analyst knows the model and the process. This frees up mental capacity to pay attention elsewhere, or perhaps even see ahead on potential issues. This either enables the analyst to step up and do new tasks the analyst hasn’t done before, or frees up mindshare to continue to learn from parts of the transaction ignore before. Maybe now the analyst is able to sit in on Purchase Agreement negotiations and therefore starts to learn about basic legal terms.
The third time through, the analyst comes into the deal with a whole bunch of puzzle pieces already figured out. The analyst takes a bigger role in coaching the CFO through the process, knowing what to ask for ahead of time, and establishing credibility / leadership. During Purchase Agreement negotiations, the analyst knows the terminlogy fluently, and can start to see how the various sections of the agreement interact. They can translate legal language to financial expression, perhaps taking the lead on preparing the working capital definition and schedule,.
Each iteration through, an individual can broaden their knowledge because they’ve mastered the other areas. All the details become second nature over time and the individual develops the ability to see ahead on the majority of potential pitfalls. Eventually, they are able to focus exclusively on “seeing the bigger picture” and contributing at a higher level because they aren’t spending all their time learning.
This is one of the reasons why experience is so valuable and also impossible to replicate with pure intellect alone. Knowledge, capability, instinct all help you get up the learning curve much faster, but some degree of repetitions is required in order to be really effective. This applies not only to banking, but the majority of jobs / life activities.
Beautifully elaborated upon.
Really well written, the statement that you can contribute at a higher level because you aren't spending all of your time learning is probably a universal one.
The legend.
fck ya Comp
Perfect explanation. Can be applied to basically any transaction based gig IMO, whether it's IB, PE, REPE, RE development, ER, etc.
The ability to think at a high level comes from an intuitive grasp of "low level" thinking. Fundamental skills become second nature with practice and experience, freeing up mental resources to be allocated more creatively.
There are no shortcuts. Do the work. What you're asking cannot be "taught," in the conventional sense.
Well written.
I'm not an exec or senior management but occasionally some higher level brainstorming is useful even at the more junior levels of firms. Two ways I would go about thinking higher level are: 1. Putting yourself in the client's/other party's shoes. Why are they doing about doing what they are doing? What implications could this have? 2. Really understanding why something is being done e.g. why is this client pushing for this market so hard? Is it because they think it is lucrative? Why would they go to such lengths for the most lucrative market? Are they desperate for money? Has this been a bad quarter? etc?
"I'm not an exec or senior management but"
In other words, "what I'm about to say is absolutely meaningless"
Rich coming from you mate
Got wiped out trading derivatives a few times. It felt awful, but I learned to think more thoroughly.
Relevant quote and article. The rainmakers I know all have on thing in common - investing heavily based on their gut conviction, usually as a contrarian against the broader market. This conviction is usually developed through (a) willingness to fail through confidence to get back up (b) voracious 24/7 reading of literature, whether it be economic or political research, or biographies of great titans and (c) listening intently with a determination to constantly learn new things from experts in their respective fields.
"Perhaps what makes Rainwater truly different from your typical tycoon is that he keeps his life deliberately unregimented. It’s his way of keeping his head out of flow charts and pie graphs and staying in touch with the world. On the day I went to his office, I had assumed I would be told to leave after my allotted ten minutes. But suddenly Rainwater asked if I wanted to go with him to see the drag-racing car he enters in National Muscle Car Association competitions. When we got to the building where the car is kept, he spent nearly an hour talking about carburetors and other engine parts with the car’s driver and the chief mechanic. Then he hustled me off to eat a vegetarian burger at a friend’s house. There, with his mouth full, Rainwater asked me out of the blue if I had any ideas about how to create better schools for urban youth."
http://haddockinvestments.com/texasmonthly.html
I went to Hofstra
In my experience, true high level thinking isn't really something teachable. When I do minority equity deals, it's something we look for but I wouldn't call it a deal breaker per-se FWIW.
Signs someone is able to think at a high level:
-Able to filter out emotions when making decisions/relies on data. A lot of people think they can do this but when you're putting a huge chunk of your net worth at stake, your reputation & investor funds at stake, it's difficult to do.
-Soft skills. Probably the most important thing, you need to be good with people. Much more EQ than IQ although both are required. For example, a good full time strategic thinker has to outsource tactical work, so being able to figure out how useful someone is tactically even when you lack the proper skill set to assess their effectiveness is a real skill. At a very high level, setting culture, ensuring the team is motivated, etc... are things that sound stupid easy but are very mentally draining/difficult to do correctly. If you're running a med/large company, it's even harder and really means you HAVE to be able to sell people on your vision and get your executive team on-board with your vision.
-Varied tactical experience. This helps people understand how everything fits together and ensures they can make informed strategic decisions. It's kind of funny when hiring a new CEO to run an asset because you can see how their previous experience influences the way they think + gaps. IE the former CTO VS the former CMO VS an ex COO/CFO type.
-Loves learning. This is good to have in general but you need to stay on-top of keeping your tactical skill set relevant/up-to-date otherwise your strategic use will begin to diminish pretty fast.
-Creativity. This isn't crucial but great strategy almost always involves the ability to think outside the box and come up with novel solutions. Look @ any great deal maker and you'll see this early on in their career.
Two very long stories... I'll shorten them.
In life: played a video game at a young age that was very cinematic and historically accurate that made me interested in WW2. Dove into the history of that period and worked my way up to the current time. Went back to 1930's traced my way back to history before. Got a good view into geopolitics.
In business: had no idea how my structured finance company worked and asked a million questions to learn. As Edifice said, I learned what my cog in the wheel did, moved on to competitors, upstream, downstream, and got a very good picture of how my broader industry worked. Moved on to learn about how other markets affected my industry.
Oh, and watched a bunch of interviews from Hoover Institute, Rubenstein, and Investors Archive
Velit harum voluptas qui eligendi ea dolores reiciendis. Perferendis dolore nostrum molestiae tenetur incidunt commodi.
Dolor inventore consequuntur rerum voluptas ipsum perspiciatis. Et voluptas quasi consequatur consequatur esse dolores voluptates ipsum. Autem minus cupiditate ipsum.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...