Learning from Lehman: The Peril of Chasing Others

This article was originally published on LinkedIn. 

Today marks the seventh anniversary of the fall of Lehman Brothers. I had the good fortune of joining Lehman just weeks before it went under. I was fresh out of college and thought I was launching my career at a highly reputable investment bank. Instead, I got a front row seat to the largest bankruptcy in history.

I watched the Lehman Brothers collapse with both fascination and terror—fascination that I was watching a historic event unfold, and terror that my colleagues and I would soon be out of jobs. While the economy was already in turmoil, Lehman’s bankruptcy triggered a stock market sell-off, sending global equities into a tailspin and destroying the financial lives of many.

Why Lehman fell

Much has been said of Dick Fuld, the Lehman Brothers’ CEO. During the 2000s, Fuld insisted on growing Lehman into an investment banking powerhouse. Goldman Sachs and Morgan Stanley were the most dominant firms, and Fuld was obsessed with trying to beat them. Since Lehman didn’t have the asset base of Goldman or Morgan, it achieved outsized revenue growth by pursuing increasingly riskier strategies.

The firm placed huge bets on mortgage-related securities and financed those investments by taking on massive amounts of debt. At its peak, Lehman had a debt-to-equity ratio in the neighborhood of 60 to 1, which meant that over 98% of the firm’s assets were funded through debt.

In good times, being overleveraged hadn’t been a problem. But when the markets turned south, Lehman got hammered. On September 15, 2008, a day I’ll never forget, Lehman Brothers was forced to file for Chapter 11 bankruptcy.

Know thyself

Lehman got into trouble by chasing its competitors when it should have done what was right for the firm. Like Lehman, we sometimes make a similar mistake in our careers. We spend our time worrying about others when we should be focused on ourselves. We look outward rather than turning inward.

Socrates’ admonition to “know thyself” may sound straight forward, but this is no easy task. In Poor Richard’s Almanac, Benjamin Franklin wrote:

There are three things extremely hard: steel, a diamond, and to know one’s self.

Knowing yourself requires a deep sense of awareness that is not easily attained. It requires honesty and introspection. It requires years of experimenting, failing, pivoting, and hopefully on occasion, succeeding.

Avoiding the comparison trap

As I watched Lehman go under and pondered my career decisions, I stepped back and asked myself several questions. Was my pursuit of investment banking any different from Fuld’s pursuit of Goldman Sachs and Morgan Stanley? Had I selected a career in finance because it was right for me, or did other factors (prestige, compensation, future career options, etc.) drive my decision?

I quickly realized that I didn’t have concrete answers to these questions. This lack of clarity was unsettling and forced me to reevaluate my career path. Since that moment of introspection, I’ve made career decisions that confused my friends and colleagues, but made perfect sense to me. This hasn’t always been easy, but it’s always been worth it.

We live in a world of constant comparison and the temptation to use others as a benchmark for success is hard to avoid. But if we understand ourselves well enough to know what we are good at and what makes us happy, we can stop chasing others and start pursuing the path that’s right for us.

Lehman Brothers got into trouble by trying to be something it wasn’t. It focused externally when it should have focused internally. If you’ve fallen into the same trap that Lehman did, consider taking a step back to redefine what success means to you. It’s not about finding the next hot company or seeking the biggest paycheck. It’s about doing what’s right for you.

Looking internally and establishing your own definition of professional success will focus your efforts on what really matters. It creates a game where you’re the only player. And when you stop competing against others and start competing with yourself, only you decide whether you’re a winner.

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The Day I Got Laid Off: Learning From Failure

This article was originally published on LinkedIn. 

January 14, 2009. I remember it like it was yesterday.

I was sitting at my desk when the head of our team tapped me on the shoulder and asked me to come by his office. At that moment I knew that I was toast. I was told to collect my things, and after a few quick goodbyes, I was forced to leave the building. It was over that fast.

I had only been an investment banking analyst for six months. I joined Lehman Brothers just weeks before its record-setting bankruptcy, then transitioned to Barclays Capital after it came to the rescue and acquired Lehman’s US operations. For weeks there had been rumors of layoffs, so I wasn’t that surprised when I fell victim.

Facing rejection
While I felt surprisingly calm that fateful day, my new reality sunk in that next morning. I woke up with no responsibility and nowhere to go. Time to find a job. I was excited to get started and optimistically thought that it might take a few weeks to find my next gig. I knew the financial turmoil had created a difficult environment for finance jobs, but I soon realized just how hard it would be to find any job in any industry.

As the days turned into weeks, and weeks into months, I continued to cast my net wider. I applied for positions that had little connection to my degree or work experience, and I was fortunate to interview for many of them. I went into those interviews feeling confident and qualified, maybe even overqualified for some of them. Despite my best efforts, I couldn’t land a job. At this point I had been out of work for four months.

I felt like such a failure.

I eventually found a great role in a completely different industry, and I was thrilled to get back to work. I can’t recall the number of jobs I applied for, but I ended up interviewing with 65 people at 20 different companies.

Lessons learned
At the time I felt like getting laid off would permanently damage my career. On the contrary, I was able to bounce back and I learn several lessons along the way.

The first lesson I learned is the importance of having a job. I obviously can’t speak for everyone, but until I lost my job I didn’t realize or appreciate how much value I got from going to work. I missed having somewhere to go each day. I missed being a part of a team. I missed being needed. I learned that having a job, even if it might not be amazing, is a privilege.

The next lesson came during my job hunt. Early 2009 was an awful time to be looking for work, but that’s not the only reason why I struggled to get hired. The main reason I couldn’t get an offer is that I failed to show companies how I could add value. I thought companies would want to hire me because I went to a good school and worked for a good company. But that’s not enough.

During an interview at a retail company I talked about my ability to analyze financial statements (my skill), but failed to demonstrate how I could help them manage inventory more effectively (their need). Companies don’t just hire smart people; they hire people who can passionately demonstrate how they can make a big impact in the organization.

Lastly, I strongly believe that one of the reasons I got laid off from Barclays is that I failed to develop strong relationships with my coworkers.

The slow financial markets gave me a lot of down time, and the looming bankruptcy created a less than positive work environment, so I routinely left the office as soon as I completed my work. While other analysts were regularly discussing recent events and the fate of the company with senior bankers, I mostly kept to myself. I failed to take advantage of these slow periods and didn’t spend sufficient time building deep relationships.

When difficult decisions need to be made, it’s a lot easier to let go of someone who you don’t know that well. Failing to connect with my colleagues is a mistake I’ve tried to avoid ever since, and I now love getting to know those I work with on a personal level.

Failure can be a great teacher, and while I would never wish to relive that period again, getting laid off and struggling to find a job taught me valuable lessons early in my career.

Build strong relationships, demonstrate how you add value, and strive to remember that having a job is a privilege.

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10 Critical Lessons I Learned During My Internship

This article was originally published on LinkedIn.

This summer I have the good fortune of interning with Linkedin. As I’ve been working on summer projects, I can’t help thinking back to 2007 when I was an investment banking intern with Lehman Brothers in New York. I was fortunate to land a full-time offer after my internship, and I joined the firm just weeks before they made history by becoming the largest company to declare bankruptcy (but that’s another story).

Towards the end of the internship I made a list of lessons I learned during my 10 weeks at the company. While some lessons speak to the unique culture of investment banking, and others sound somewhat silly, I think there are valuable tips that any intern can follow to have a great summer.

  1. Always know the details of your internship project. As an intern, almost every time you cross paths with someone, the first topic of conversation is the project you are working on. If you can clearly articulate what you are working on and show excitement in the process, everyone will assume you are intelligent and hard working.
  2. When walking down the hallways, walk very fast and have a look on your face of deep concentration. Doing this will make it appear that you are working very hard on something important.
  3. After someone gives you an assignment, restate in your own words what it is you understand you should do. If you just smile and nod, they will assume you know exactly what to do, even if they didn’t explain it very well. Avoid going back to your desk and wasting a lot of time trying to figure it out what they said or having to ask them re-explain it.
  4. Investment Bankers judge you by how late you stay at night. However, don’t go around bragging how late you were at work. Chances are they were working just as late one of the previous nights. If they ask, let them know how late you stayed, but downplay it. You want others to know that staying at work until 3am is not a big deal.
  5. PAY ATTENTION TO DETAIL. Everyone who is senior to you is really smart and can pick up on most errors with a glance. If you need to take an extra 10 minutes to look over the slide/spreadsheet, definitely do it. You can’t afford to be making mistakes on that kind of stuff.
  6. When sending emails, always say please and thank you, even if it is something small. Most people are very busy and are running on little sleep. Saying please and thank you is very easy and everyone appreciates the gesture. Being polite and showing people kindness goes a long way.
  7. Being really smart and good with numbers is not everything it takes to succeed. I thought that was the case when I first started. Being resourceful is an attribute that will take you very far. Don’t underestimate the importance of communication.
  8. When putting slides together, always be able to reference how you got to the output (excel calculations, research reports, etc). The senior banker will always ask for this data, and if you don’t have it readily available, she will get even more frustrated / stressed. This is not good because bankers are usually always frustrated / stressed to start off – no need to make them take it out on you.
  9. Go to the gym. If you take an hour and a half going to the gym, that means that you can stay later while still doing the same amount of work. This may sound dumb as a full-time analyst, but as an intern, you want to put in some good face time.
  10. When you first meet a new person in your group, and you don’t know what their title is, always guess a level above what you think they are. If you are pretty sure that they’re an analyst, ask the question, “So you are an associate, right?” No harm can come from guessing a higher rank. It might even make their day.

Intern life can be difficult and you only have a short time to make a lasting impression. But an internship is a great opportunity to gain hands-on experience, develop deep relationships and set yourself up for a rewarding career. Good luck!

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