Thursday, April 22, 2010

More than Mechanics

Many people are still job hunting (with some positive results being announced recently) and I've been collecting their experiences with the recruitment process.

One thing that is common with the successful candidates seems to be that they all have some form of edge and advantage to distinguish themselves from others. While it might be ironic to try to find a common thread which runs between a group in which individuals try to distinguish themselves, I think one of the common themes is the idea that there is more to finance than mechanics.

I can also appreciate that it is VERY easy to focus on the science, mechanics, valuation techniques etc. After all, that is the focus of this blog (generally speaking). However, as some of my colleagues in industry have mentioned: "Understanding the mechanics is table stakes. You can't play the game if you don't know the rules. But you can't succeed if you don't know how to build relationships."

So while having the technical skill is sufficient to do the job at a junior level, if you can't build relationships (leading to driving deals) you can't become a senior manager in finance (or anything really). And if you don't at least exhibit the potential to become a senior manager, you probably won't be given the opportunity to be a junior (after all, what's the point of hiring someone who doesn't have potential to excel?). Even the best Equity Research Analysts (considered one of the most quant jobs) are great at selling ideas. After all, who cares if you're analysis is perfect if you can't convince someone to look at it?

Having said that, a question asked by JD is a common question by people looking to enter the industry. How does my background fit when transitioning to a job (particularly finance)? In JD's case, with a background in sales in marketing (and any job in general) I'd focus on your ability to sell an idea. Don't worry about demonstrating your technical prowless.

While you need to strike a balance beween showing interest and going overboard, you can't expect to be able to answer EVERY technical question that comes up. As keen and diligent as you are, the person interviewing you has already passed the vigorous recruitment filtering process and is now doing this as their livelihood and is guaranteed 100% to know this more than you and drill you until you get to a place where you simply don't have the answer. It's more important to show interest, that you've taken the steps to learn as much as is reasonably possible and that you have the potential to excel.

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