Success in IB - Not Taught in B-School
Long post alert.
Someone asked me about skills / advice that aren't taught, but are important in IB.
The below is stream of consciousness and in no particular order.
- Always ask why. General curiosity is a lost skill. I always ask myself why things are the way they are. Why is the business growing, what is this account, why did this customer leave, etc. You can't ask yourself why enough times. Write down questions you have and always understand the "why".
- Have empathy. This is another lost talent. Try to recognize and understand the feelings of others. This makes each of us more human. Whenever you walk through a facility (usually manufacturing, distribution, etc.) the employees will always wonder "Why is that young person in nice clothes walking through our plant?" Employees are always scared that a business will get sold and they will lose their livelihood. I come from a very blue collar family. That person in the plant is my dad. Whenever I walk through a plant and see that person I think that it is someone's dad who is concerned (or scared) about what is going on. Think about that. We are all people. Empathy will keep you humble.
- Think about how businesses operate and make money. Look at every file or piece of information you receive and think about how it fits into the operations of a business you are representing. There is a reason for everything. For example, you receive a file of 1099s - Ask yourself what are these? Why do we have them? It may mean that the business uses an outside sales force that are not W2 employees. How much revenue is generated from each? How are they paid? Is there liability with the 1099 vs. W2 classification. There are dozens of examples like this. Just think about how everything you interact with fits into the business. Ask why.
- If you have bad news, always lead with it. This is a great lesson I learned on the job. I ran a marketing process to sell a company and we received only one bid after discussing the opportunity with 100+ buyers. We had to present the results to the business owners. I lead with "We received good feedback about your company from the market." Big mistake. They thought good feedback was in terms of a lot of interest at high values. What I meant was that we found out how buyers viewed the business and what made them "pass" on the opportunity. I should have lead with "We received one strong bid to buy your company and received valuable feedback from the market on their concerns."
- Always look at percentages. Percentages (or margins) don't lie. The first thing I always do when analyzing a business is look at margins and annual (or monthly) % change. You can really tell a lot about a business this way. A high value-add client will usually have strong gross margins. Although an is too high will always be scrutinized by a purchaser with the question of "is this sustainable". If a buyer asks it, we should also wonder the same.
- Network with the intent of building genuine relationships. This is a good lesson from one of the most successful financial advisors that I know. When he first started in his career (right out of college) his plan was to go to the med-school and law school to network with people that would eventually be high net worth individuals. He took them out golfing, coffees, lunches, etc. He didn't go into these meetings with an ask, he built genuine relationships. Those relationships blossomed and the individuals eventually invested with him or bought financial products from him. Everything started to snowball for him and his practice just kept growing. While this networking paid off in the long-term, he led with building true relationships.
- Take detailed notes. This is something I do multiple times on a daily basis. Every call, meeting, interaction I have I always take notes. All my notes are saved in a folder. This has helped so much with trying to recall a topic or question that was discussed. Clients hate when they tell us something, then we forget it and they have to explain (or provide) it again. My brain is in the cloud.
- Ask at least one pre-thought of question per meeting. This gives you the opportunity to show that you have looked at the business / thought of it carefully and have curiosity. Come up with ~3 in case your other two are asked.
- Don't fear being on the phone. It seems like most people now would prefer to email. If you want an answer the best way to contact someone is probably calling them (call their cell is even better). It is easy for people to ignore an email. Whenever I am contacting buyers for a company we are selling, I always call their cell phone, then immediately follow up with an email. Staying persistent gets responses.
- If you can't answer something, always follow up. You aren't expected to know everything. Especially early on in your career. There is no shame in saying "I'm not sure. Let me get back to you on that.". I still do it all the time. Just make sure you actually get the answer then respond to the inquiring party.
- Never be the reason a deal gets delayed. If there is a diligence request that needs fulfilled, a question that needs answered, a slide that needs completed, anything - make sure you aren't the reason there is a delay.
- Speak with confidence. This goes a long way. We deserve to be in our roles and we deserve attention. Have ice through your veins, we don't have anything to lose. Be confident, but not arrogant.
- Have a really good organizational system. I am a stickler for using a template folder structure and consistent file names. I always use the same folder system (same names). I use naming conventions so files are always in chronological order when sorted by name. Most recent dates on the bottom. When naming a file I always ask "What is this?", then name it as such. Files should be named so that a person looking at it for the first time should know exactly what it is. Never have files that are "Xerox Scan 615qad23. You are responsible for finding everything and anything on a moments notice.
- Triple check your work. Self explanatory. Take the extra time to review and review again. It doesn't matter if a document is out five minutes faster, but it will matter if there are spelling errors and old forecast numbers.
- Play your underdog card. A lot of people may not have gone to target schools and fought like hell to get into this field. You deserve to be in this line of work just like everyone else. Have a chip on your shoulder. Constantly prove yourself with your work and results. It will pay off.
- Have Grit. This is sometimes overused and everyone thinks they have it. Grit is the passionate pursuit of a long-term goal with persistence - no matter the obstacle. Have a long-term goal and every day move the boulder up the hill to get there. Build up on the small successes. They will be big successes one day.
- You will mess up. You won't mess up more than me. I have sent the wrong CIM to a buyer, messed up forecasts, provided information I shouldn't have, replied all to a group that shouldn't receive the email. Everything you can think of that is wrong, I have probably done. Just learn from the mistakes and don't make them again. Be like a pitcher who throws a home-run. Forget about it, move on. Focus on the next pitch being a strike and striking out the batter.
- Be concise. Explain things in a way "a third grader would understand." Speak thoughtfully, clearly with sentences and in a way that makes sense.
- Be creative. Don't be a robot. Think. We have a brain, use it. If you aren't creative, use resources to make yourself more creative. For example, look at investor reports from publicly traded companies that are in the same (or complementary) industry as your client. This is how you can "get in the weeds in an industry". It gives insight into how people in the industry look at themselves and others.
- Operate in a manner as if the investment bank you work for is your business. This is John Smith, LLC. How would you want the business to operate? This gives you a sense of pride in everything you do.