Making Your Mark on the Street: Taking the Road Less Traveled

I take a lot of crap from my Wall Street-oriented readers for writing too much about gaming, technology, etc., and not enough about my experiences on the Street. So, it is in that spirit that I share some thoughts with you on how to differentiate yourself, how to separate yourself from the pack as you are building your career. Wall Street, its training programs and implicit mentoring system pushes for conformity, for the development of a set of core skills that you can apply in your area of focus. In fact, one's skill set can be significantly impacted by the mentor whom you chose or who chooses you, taking a pretty large measure of control away from you. Now, developing a solid tool-kit is absolutely critical for success, don't get me wrong. But there is a big difference between competing both internally (with your peers) and externally (in client turf battles) on the same playing field, versus changing the field entirely. Huh? What I mean is the following:

By playing the game the way it has historically been defined, you are limiting yourself to only marginal victories versus your competition. The only degrees of freedom are those of sheer intellect and skill (of which there is little variation across the top tier firms) and those of firm quality and reputation (which is meaningful but whose impact can be overcome through intellect and skill). The key to scoring big wins is by changing the game entirely.

As I think about it, this is not entirely dissimilar from what Nintendo has done with the Wii. Instead of getting into a feature and functionality war with Sony and Microsoft, Nintendo said "We're playing a different game. And that game is ease of use and fun for gamers of all levels." And because of this, they have expanded the gaming pie, and captured an extremely large and valuable piece of this enlarged pie. An analogy in my career was established early on in derivatives, when I decided to apply a different approach to the marketing and design of derivative strategies: applying a value-driven, corporate finance framework to hedging programs. My background prior to entering derivatives was in M&A, so I understood the principles and techniques of security valuation. This was not a skill commonly held by those in derivatives in the early 1990s. Most successful derivatives transactors were more product-oriented, super-bright but very focused on designing the most creative and valuable strategies in a vacuum. This was neither an area of competitive advantage for me nor an approach that resonated with me, so I decided to try something different - using firm value and Economic Value-Added as yardsticks for whether a risk management strategy made sense or not.

Seems pretty basic, right? Well, in the early 1990s it wasn't very common. I was speaking a different language to many of the Treasurers and CFOs with whom I interacted, a language that they understood far better than what many of the more experienced product-driven derivatives pros were speaking. My approach also made my strategies more easily salable to Boards of Directors, as approaches that demonstrably reduced risk and/or increased firm value were hard to dispute. And this new playing field enabled me to carve out a niche in the corporate derivatives business very quickly, building a franchise that I was able to leverage and parlay into high-value client relationships for over a decade. From my perspective I was doing something that was good for my clients, good for my firm and good for myself. It was fun. It was exciting. I felt good about the advice I was giving. And it was, for a meaningful period of time, quite different than what the competition was pitching.

Was this a "disruptive technology" in Clay Christensen-speak? Probably not. But by taking the road less traveled, by taking a chance on re-defining the game, it made all the difference in my career.

Comments

[Michael Urlocker]

You seem to have added value to improve the part of the customer experience that was not good enough. And you were not understood by the mainstream competitors.

So, yes, you were disruptive. And it worked. Congrats.

Mike
www.OnDisruption.com

[Mister Bile]

I wonder if your competition continued the Nintendo/Sony and Microsoft analogy, by claiming that your strategy was just a fad, and that your clients would regain their senses and abandon you aaaaaany day now. (Followed by inevitable attempts to ape your approach, while not actually understanding why it worked.)