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Oct 14, 2021
As many readers know, I worked for a large brokerage firm on Wall Street my entire career. Over the past two decades, I hired more than 300 financial advisors. The success rate was approximately 20% which is standard for the industry.
Respectfully, 240 of the men and women – all with true aspiration and ambition – hired into my training program failed. Each time I fired one for failing to meet their performance hurdles, I knew they were in harm’s way economically. Younger trainees had financial obligations, such as rent, utilities and student loans. Older trainees had mortgages and childcare expenses. The consequences weighed heavily on me. I just couldn’t accept an 80% failure rate.
Along with my management team, we constantly asked ourselves how to improve our success rate. We were always tweaking our hiring process. Better initial screening or adding an ad hoc interview for candidates “on-the-fence.” We even incorporated a final panel interview before someone could join our training program. We proudly built a mentor’s program so each trainee would have 1:1 coaching. We incorporated knowledge and skills assessments to ensure no one would fall behind. I hired two of my best practitioners as managers to lead our program and teach our trainees. Finally, I too rolled up my sleeves and taught two classes per week. Surely, these changes would lead to a higher graduation rate. In short, it didn’t.
Why do some trainees succeed, and others fail? Is it because they didn’t attend the right colleges? Were they not competitive? Should they have played sports in high school or college? Is it possible their social circles were limited? Was it their work ethic? Interestingly, I saw some trainees work long hours and fail while others didn’t work as many hours and succeeded. Some were well-groomed and had good manners. Others were at the other end of the spectrum. That didn’t seem to matter much either. I watched tech savvy trainees fail and non-tech savvy trainees succeed. Of course, extroverted people are more likely to succeed over introverted people. There was no correlation there either. What was the X-Factor? For the life of me, I couldn’t put my finger on it.
The X-Factor is grit according to Angela Duckworth, a professor and psychologist at the University of Pennsylvania. In fact, she wrote a book called Grit, published in 2016, citing studies she did from Spelling Bee finalists to West Point graduates. Professor Duckworth suggests that success has less to do with IQ and talent. As Duckworth defines it, grit is passion and sustained persistence applied toward long-term achievement, with no particular concern for rewards or recognition along the way. It combines resilience, ambition and self-control in the pursuit of goals that take months, years or even decades.
I got it! All I have to do now is look for grit when reading resumés and interviewing candidates. Obviously, not so easy in practice. Our training program lasted three years. That’s a marathon! Finding individuals who can be resilient, ambitious and exercise self-control for 9,000 hours (60 hours per week x 50 weeks per year x 3 years) is nearly impossible. What would I find on their resumé that would be representative of grit? What could they share with me in the interview that would convince me they had grit? I finally knew what I was looking for, but it wasn’t tangible. It was so frustrating because people’s livelihoods were at stake. In the end, interviewers are still making an earnest guess on a candidate’s future if they’re really honest with themselves. That was true for me.
As a young man, I admired those with IQ and talent. Now that I'm older, I prefer those who have grit and character. I still can’t look at a young person and predict grit, but I can look at an old person and see if they’ve lived it.
Founder and Managing Partner
Wealth Management Independence