It's fascinating to watch how different people are responding to the professional and financial challenges this crisis is creating. We live in a society where many people's self esteem derives from their job and how much money they make and their character is tested when times get hard.
A brief disclaimer: I want to be clear here that I am not referring to the severe challenges of someone losing their home or all their savings -- I am instead referring to the professional's challenge of the job being harder, needing to switch jobs, people around you being down and losing money in the market.
The test of character is described well in yesterday's opinion piece in the New York Times about investment-professional psychology by Dr Richard Friedman. Dr Friedman is a professor of psychiatry at Weill Cornell Medical College and he treats hedge fund managers among his patients.
He describes one who initially had to manage his panic anxiety as a result of his losses but then, once he had that under control "something else emerged. He came in one day looking subdued and plopped down in the chair. "I'm over the anxiety, but now I feel like a loser." This from a supremely self-confident guy who was viewed by his colleagues as an unstoppable optimist.
He was not clinically depressed: his sleep, appetite, sex drive and ability to enjoy himself outside of work were unchanged. This was different.
The problem was that his sense of success and accomplishment was intimately tied to his financial status; he did not know how to feel competent or good about himself without this external measure of his value."
Dr Friedman observes that over the last couple of months he has seen an increase in male investors who have had their confidence crushed by their poor performance in the markets. And it's notable that he also observes that women are not typically responding the same way.
Over the last month I have found myself counseling friends and acquaintances as challenges arise and they look for help -- and I find myself more often than not advising them to stiffen their spines, take more personal risk and use the crisis as an opportunity to grow their careers and prospects.
One recent example is of a senior manager let go from Cadence Design in their recent layoff -- anxious to get a reference from me as he tries to get a job at Synopsys -- the only other major company in the EDA industry but more of the same. This guy is 40. By doing the obvious thing he was missing the opportunity to break out and change his career into an industry that is growing vs. EDA which has some serious structural issues. I walked him through the thought experiment of what his career will be like 10 years from now based on the choices he makes today. It's a sobering exercise and as a result he's now looking at growth industries outside of EDA too.
In another case I had dinner with a friend last night who spent the first 30 minutes complaining about how hard it was, how depressing, how difficult to get the other people in his firm to deal with the challenges, and after allowing him the indulgence I then verbally smacked him. He has a choice. He can be dragged down by the reactions of the people around him, or he can step up and lead them out of their issues by driving to decisions without giving in to the indulgence of complaining. In his case it's a choice of self discipline -- to habitually lead instead of giving in to the emotion of the crowd. (I'm fortunate that we're good enough friends that he stayed for dinner instead of telling me to get lost at my presumption).
In contrast I am inspired by my girlfriend who runs a Silicon Valley recruiting business which is severely challenged by the downturn, and has had a host of health issues, and yet she leads, smiles and soldiers on. Or my board member who runs a hedge fund and describes his daily life today as "catching falling knives" and yet he stays strategic, stays focused on executing the long term opportunities this market is creating and still has time to advise me and make me laugh. At least I was able to make him laugh too by suggesting he wear leather gloves.
A crisis of confidence -- which is what we are living through -- is an opportunity to discover your character. In good times everyone does well -- I think of several of my tech friends who were extraordinarily successful because they were in the right place at the right time -- and confused this with being smarter. But in bad times leaders emerge. People who can navigate the storm and bring others along with them. People who see the opportunity and lead others to it. So if you are ambitious and have self discipline this can be an opportunity not a crisis. And I am not talking about how much money you make -- that will follow later if you are patient. I am talking about what you choose to do with your career and your leadership potential at this moment in time.
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