How to make Managing Director
When I first started on Wall Street, one of my first managers said something to me that has stuck for eighteen years.
“when you start out, you are just being paid to learn, then after about five years you are paid for what you know. Somewhere in your thirties you start getting paid for who you know”
Remember that: paid to learn, paid for what you know, paid for whom you know.
The Turkey Problem
It easy to get into your thirties, you are doing well in your job, you are getting paid for what you know. Things couldn’t get better, than all of a sudden what Nassim Taleb describes as the Turkey Problem happens to you.
The Turkey is at its peak happiness the day before it dies.
How is this relevant to you? Because in finance, accidents happen all the time, products, industries come and go. Tech IPOs went down 75% from 2000 to 2002. CDO Issuance went from $500bn in 2007 to $80bn in 2009, that’s an 85% fall. Gold Mining Stocks went down by 80% from 2011 to 2016. Those of you in trading know well how much trading volumes have gone down by.
Finance is one of the most cyclical industries in the world – that’s why they pay you the big bucks in the first place.
But if your industry, your job is that volatile you better be able to handle it.
A Nassim Taleb concept I find super helpful is Anti-Fragility.
Source: Art of Manliness.
One of the ways I have found to be Anti-fragile is by having a network, a brand and key relationships. Now I know what my manager meant by whom you know.
Because the right relationships don’t just mean that you get promoted better, get hired faster, survive longer, it also means that you have a better life. The sad part is, I didn’t figure any of this out until I was 28.
I’ve had seven or eight jobs in the last 18 years, 4 companies, 2 continents, only one of those jobs (the very first one) came from sending in an online job application. The rest came through relationships.
I don’t say this to gloat, I say this to tell you how the real world works.
I’m going to teach you how to do this.
The key to resilience in your life, to get better jobs, opportunities and income is to build stronger relationships.
But telling you to “build stronger relationships” is kind of like telling you to be smarter. So what really turns a surface-level connection where you meet someone at a networking event or add them on LinkedIn into a meaningful relationship?
The answer is something called social capital.
What’s social capital?
Basically, social capital is a fancy term for something very simple, and that’s what you have to offer the people around you, and what they have to offer you.
You can think of social capital as value, utility, or influence. You can think of it as opportunity, connection or community. You can think of it as knowledge, expertise and insight.
The words we use don’t matter as much as the underlying idea, which is this:
Your network — your collection of relationships — is built on, and grows from, what you have to offer to other people, and what they in turn offer you.
People who don’t think about social capital miss out on the killer advantages of a great network, and face a serious uphill battle in their careers and personal lives.
Either you create social capital, and have a huge leg up in life, or you don’t create social capital, and hope everything works out. It’s really that simple.
Now, to get a kick-ass network, it probably feels like you have to have a great job, a great lifestyle, a great alumni group, or some way of making those connections in the first place. Most people believe on some level that great networks are inherited, not built.
We know that if you build the network, you get the opportunities. And if you get the opportunities, then you can continue to build the network.
But which comes first? The network or the opportunities? It’s a real chicken-or-egg situation.
Except it’s not.
Because having a great network isn’t about how powerful, connected and successful you already are. It’s about how generous you choose to be, no matter where you are in your career.
Great networking isn’t about how epic and powerful you are right now. It’s about how generous you choose to be with other people each and every day.
When you think networking and relationships – think generosity.
To be a great networker, you have to be patient, selfless, and not goal-oriented.
If you cultivate those qualities, then you will build relationships that transform your life. Ironically, it’s only by being interested in other people’s success that you can guarantee your own. It’s a weird paradox, but that’s one of the most powerful and important principles of networking and life.
So that’s the other big difference between networking and relationship-building:
Networking focuses on short-term connections and immediate benefits:
Someone meets you at a conference, gets your business card, and sends you an email the next day asking for an interview at your company.
Relationship-building focuses on long-term connections and unknown future benefits: You meet someone interesting at a conference, meet up for coffee later in the week, and start sharing ideas, introductions and conversations as you become friends.
If you want to have great relationships and build a great network, then build social capital, focus on building relationships by being generous.
How do you get Social Capital
It’s all about providing value to other people. That how you build social capital, and by building social capital, you build relationships, and by building relationships, you create new opportunities to generously share your social capital, and that’s how your network feeds itself.
So what should you be generous with? What exactly is your social capital?
There are three main resources, or types, of social capital: people, knowledge, and emotional support.
These are the three things you can provide to your network time and time again. When we talk about being generous, we’re talking about being generous with these three things.
People refer to the people in your network — the relationships you have.
Knowledge refers to the information you possess — the facts, insights, opinions, or expertise that you can share with the people you know.
And emotional support refers to psychological and emotional well being — the support, friendship, inspiration and guidance you can offer in your relationships.
People, knowledge and emotional support — these are the three currencies of social capital.
When used correctly, these currencies are the raw material, the fuel, and the byproduct of your network, all at once.
Next time you are thinking about how to be anti-fragile and take your career to the next level – my advice is to focus on your Relationships and build Social Capital.
- Focus on being generous and long term focused when building relationships.
- Every time you meet someone think about how you could help them, if you aren’t sure, ask.
Relationships are critical, so look out for a couple more posts from me on the subject.
For those of you who can’t wait and want to make a difference, check out Why Smart People Fail to Achieve their Potential.
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