A Letter to Students Entering the Workforce
Some advice you won't learn in school.
Dear Students,
What follows are rules for success you won’t learn in school.
Some might seem obvious. Think of them as valuable reminders. Others may surprise you. They’re not intuitive until one has spent a few years on the job.
Importantly, many of the rules that have made you successful so far as students and the rules for success in the corporate world are different. Believe it or not, research suggests that only 1 to 2% of your future income will be tied to your IQ.1 Do we have your attention?
Here goes, in no particular order:
Stay close to revenues: In many jobs, this rule means striving to get closer to clients. And it’s not (just) about getting credit for your work. Think of it as a metaphor for recognizing that it is prohibitively costly for management to gather full information to make compensation and promotion decisions. Therefore, you should try to manage your career in a way that makes your contribution to the company’s success as transparent as possible, whether it is about revenues or some other important metric. To stay close to clients means that you learn their needs and you make your work directly relevant to your firm’s commercial success. Your place in the value chain becomes clearer the closer you are to a revenue stream. This rule comes naturally to extroverts, “MBA-types,” but it’s equally important for technical experts.
To be clear, many jobs aren’t client-centric. But, in those positions, too, you should ask “where’s the revenue stream, and how can I get closer to it?” Always seek to maximize your impact on the bottom line.
Build your human capital: Jobs in most industries can be risky. No-one gets “tenure.” When times get tough, you may face setbacks due to factors that are out of your control. This is why we advise you to build your human capital. We define human capital broadly: your network of industry contacts, your publications in academic journals, your reputation on the conference circuit, your educational credentials, etc. –anything that differentiates you from your peers, and that no-one can take away from you.
You may think that to focus on human-capital building activities will appear selfish and may be at odds with your employer’s objectives. But, to the extent that you align your efforts to be relevant to your job, employers want you to build your human capital. You become happier at work, better at your job, and more productive. Everyone wins. For example, many companies will encourage you to study and take exams to earn professional credentials. They will pay your expenses and celebrate your success when you pass.
Focus on the trend: You will experience ups and down in your career. You will have bad days. In risk-taking jobs, you will make bad decisions, or experience bad luck. In all jobs, you will face setbacks, politics, stressful situations, missed deadlines, conflicts, and so on. Many of these issues are just “noise!” Ask yourself: will this issue affect my ability to achieve my goals over time? If not, ignore the noise and look at how you’re progressing from a longer-term perspective. Is the trend positive?
You might wonder what to do if the long-term trend is negative. Even in those cases, it’s better to gain clarity on how things are going for you from a long-term perspective. This way, you can plan accordingly –find ways to change the trend.
Don’t get too good at coding: Coding skills will serve you well in many jobs, despite the rise of Artificial Intelligence. Many of you will have successful and fulfilling careers involving highly technical skills. Here, we use coding as a metaphor for execution roles. Enable yourself to be moved into rewarding assignments. If you’re good at something mundane, others may rely on you more than what would benefit your advancement to better roles.
Make sure you progress towards building, innovating, leading, selling, or risk-taking…not just execution. Don’t get stuck in the mud of a giant technical project with uncertain commercial applications. Such projects often involve data scrubbing. Be prepared to roll up your sleeves and pay your dues but keep moving forward.
Adjust your perspective: More than twenty years ago, an ambitious young man complained to his mentor about work. The young man was worried. He wasn’t reaching his self-imposed goals.
His mentor looked at him with compassion and asked,
“Do you know the secret to happiness in life?”
The young man moved to the edge of his seat, eager to receive life-changing wisdom.
“Lower your expectations,” the mentor said.
This was a conversation between us, with Mark as the mentor and Sébastien as the mentee.
You can interpret this advice in at least two ways. Perhaps it’s a statement about how life always disappoints. Or it’s a statement about people setting their expectations too high. Maybe it’s both. Happiness is not about reaching goals. It’s the journey. And here’s the good news: centuries of exploration in psychology and philosophy suggest that you have control over your expectations. Here's a simple way to remember this rule:
Happiness = Reality - Expectations
There’s nothing wrong with ambition. And it’s important to set stretch goals for yourself. But occasionally, it helps to adjust our perspective. Stress and disappointment come from how we react to setbacks, not the setbacks themselves. Resilience is key. We encourage all of you to read about stoic philosophy.
Emphasize communication: As students, you operate in a quasi-perfect meritocracy. You study hard, you get good grades. Aside from team projects, academic life is individualistic. Corporate life does not work that way, for many reasons. In corporate life, collaboration and teamwork are essential. While perhaps 90-95% of your success as a student comes from your individual intellectual merit, on the job you will quickly realize that –even for the most technical of roles– maybe as much as half of your success is determined by how well you communicate.
When you start a new job, write weekly updates for your boss, colleagues, and stakeholders. You don’t need to be self-promotional. Stick to the facts. Also, always communicate clearly in meetings and presentations. Improving your communication may be the single best investment you can make in yourself.
Pay attention to details: On the job, the stakes are high. Many of you will quickly learn that you must always double- and triple- check your work. Your colleagues depend on your work. Your reputation is at stake. In finance, for example, millions, even billions of dollars are often involved. Attention to detail is much more important than in school. In addition to the disastrous effects of errors, lack of attention to detail has a major impact on how others perceive you. Over the years, we’ve seen many highly-qualified professionals (PhDs, etc.) torpedo their careers with sloppy work.
Of course, sometimes deadlines loom, and multi-tasking is unavoidable. But you must prioritize quality over quantity. It’s better to do a few things very well and pay attention to details than to take on too many projects and deliver “just ok” work on each of them. Exceptional work is what gets rewarded. We encourage you to read “Deep Work” by Cal Newport.
Be nice: As you strive to succeed in a high-stakes field populated by ambitious colleagues, you may believe that a callous and cutthroat approach is the most reliable path to success. But such a view would be misguided for two reasons.
First, if you behave without regard for how your actions may adversely affect others, people around you will be less concerned about your interests. They will reciprocate. And once your colleagues come to expect your behavior, they will take defensive measures to insulate themselves.
Second, and more important, it would be unpleasant to go through life in constant conflict with those around you and knowing that you are disliked. It’s okay to compete hard and strive for advancement but do so respectfully and graciously if you hope to be happy.
Recognize that life is not always fair: Without a doubt, you will be treated unfairly from time to time. You will feel aggrieved and perhaps you will seek retribution. Although such a response may be justified, it will likely be unproductive.
First, you should consider the possibility that the offence was not intended or that you have insufficient information to judge correctly if you truly were treated unfairly.
Second, we all make mistakes and usually deserve a second chance.
Now, suppose that you were indeed treated unfairly and that the offender is underserving of another chance. Usually, the best course of action is to take stock of the circumstances, learn from the experience, and proceed with the new information in pursuit of the best outcome for yourself and those close to you. If instead, you dwell of the grievance, you double its impact by extending your sorrow, missing out on pleasant feelings, and losing sight of more noble goals. It is almost always better to act in a forward-looking way.
Mind your diet, exercise, and sleep: A career in the corporate world is a marathon. Take care of yourself. Think of yourself as a “corporate athlete.” Your diet, exercise habits, and sleep are the foundations to everything. Of all the rules we’ve outlined in this letter, this one is the most important. Diet, exercise, and sleep reinforce each other in a virtuous cycle. Eat well and you’ll have more energy to exercise. Exercise and you’ll sleep better. Sleep well and you’ll have more self-discipline with your diet. You get the idea…
If you take one of these three pillars away, it becomes almost impossible to maintain the other two.
The key is to prioritize your health. Don’t wait for motivation. Instead, build habits (read Charles Duhigg’s “The Power of Habits”). Most of us under-estimate the value of sleep, but it’s incredibly important. It impacts your energy, mood, defenses against disease, ability to concentrate, appetite, and so on. (Read Matt Walker’s “Why We Sleep”).
As you move into the corporate world, you are about to face important decisions. We encourage you to approach this transition with excitement and a positive outlook. Sky is the limit, for all of you.
We wish you all the very best,
Mark Kritzman and Sébastien Page
When he decided to write a book on leadership and self-improvement, Sébastien Page was rejected by over 200 literary agents.
He was asked, “Why would a finance expert write about leadership?” He was told to stay in his lane.
Sébastien has more than two decades of leadership experience. As an author, he believes breakthroughs often happen when experts venture outside their field. That is why, in "The Psychology of Leadership," he went beyond finance and economics to study research in psychology.
He is currently Head of Global Multi-Asset and Chief Investment Officer at T. Rowe Price. He oversees a team of investment professionals actively managing over $500 billion in assets under management.
Sébastien won research paper awards from The Journal of Portfolio Management in 2003, 2010, 2011, and 2022 and the Financial Analysts Journal in 2010 and 2014. In addition to The Psychology of Leadership, he is the author of Beyond Diversification: What Every Investor Needs to Know About Asset Allocation (McGraw Hill, 2020) and the coauthor of Factor Investing and Asset Allocation (CFA Institute Research Foundation, 2016).
Sébastien is also a member of the editorial boards of the Journal of Portfolio Management and the Financial Analysts Journal, and the Board of Directors of the Institute for Quantitative Research in Finance (Q Group). He regularly appears in the media, including Bloomberg TV and CNBC, and was recently named amongst the 15 Top Voices in Finance by LinkedIn.
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Tai, Jack. Do college grades predict future success? Forbes, April 14, 2022. For the original study: L. Borghans, B.H.H. Golsteyn, J.J. Heckman, J.E. Humphries, What grades and achievement tests measure, Proc. Natl. Acad. Sci. U.S.A. 113 (47) 13354-13359.