Managing Your Instincts For Success As A Private Equity Partner
Think of a colleague who is really smart, but can be his own worst enemy. Everyone can see it in plain sight: maybe he’s too stubborn on his views, gets chippy, or overanalyzes things. Or perhaps he freezes in committee, loses conviction and becomes scattered.
It’s so easy for us to see what other people are doing to get in their own way. But it’s really hard see one’s own behavioral limitations.
You can see the speck in your colleague’s eye, and be missing the board in your own.
High quality thought and work product are table stakes in Private Equity. In some sense, “the Results should speak for themselves.”
However, as you present and interact with your key constituents, some of your instincts may be working against you.
Instincts are thoughts that occur to you almost like magic.
With little conscious thought, you might have a ‘sense’ that you should do something immediately. Some instincts are rooted in the wisdom of reps (intuition); other instincts are created to protect you from repeating a painful mistake (reactivity). Consider the difference:
INTUITION is your supercomputer which harnesses your cumulative experience to give you an instant read of a deal situation. You can then use your rational, data-driven skills to validate this intuitive hit.
REACTIVTY is your bouncer, protecting you from everything it perceives as a threat. It takes no chances, acts first, and immediately gets you out of what it thinks is harm’s way. While some reactivity is helpful in creating a feeling of urgency, most reactivity is usually too intense relative to the reality at hand.
Often there is no tiger, but your Reactivity trumps Intuition.
You end up in a defensive state, rather than a balanced optimal mindset.
To have more success as a senior investment professional, it’s necessary to become aware of unhelpful reactive tendencies and turn down the volume on them. Reactive strategies may have helped you as a junior / midlevel investment professional:
paranoia around perfect work product
standing out to make your voice heard
defaulting to skepticism on a tough investment case
But as a senior deal partner, these reactive behaviors are preventing you from connecting with your audience (IC, Management and your team).
Here’s how to heighten your Awareness of ingrained behaviors which may be hijacking your success as a deal partner.
Step 1: How Does Each Picture Make You Feel?
How often do you feel like the left picture? Reacting to a fire? Plotting an counterattack on an aggressive counterparty? Worrying about what you might miss on a fast moving situation?
How often do you feel like the right picture? Calm, breathing normally, assessing the facts and coming to an intentional decision with the team.
Your Colleagues Sense Your Energetic Mind State. What energy are you giving off?
Humans, horses and dogs sense each others energy. A horse will buck you off if it doesn’t like your energy. A dog mirrors your moods. Your colleagues sense your mindset.
This limbic “sensing” between mammals doesn’t live in the rational brain, yet it determines 90%+ of the influence you have with others.
Reactive people drain peers and are rarely promoted. Intentional leaders inspire others and create building energy.
You might have an excellent work product, but your “Energetic Presence” is responsible for people wanting to hear your ideas and work with you. Your Energetic Presence is the number one determinant of your influence and transmission of ideas.
Here’s how to become more aware of your own Energetic Presence.
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Step 2: Learn To Identify When You’re In A Reactive Mindset
Reactive Energy feels like ADRENALINE FUELED URGENCY
Rescuing, putting out fires, blaming
It sounds like “I must fix this” — “If I don’t make this work, then…” — “I have to, or else…” or an accusatory “How did you miss this” — “How could this have happened”
Often includes judgmental language “good / bad”— “excellent/terrible” — “success / failure” and the judgment is often directed at oneself!
As a result, you may become tense, short-tempered, and have a difficult time considering others’ point of view
You might get a result, but other’s lose their connection with you as a leader
In contrast, Intentional Energy feels light, creative and collaborative
It looks like working with others to find a solution to a problem
It sounds like “now that X has occurred, how can we best move forward” — “what are some creative ways we can improve this situation”
You are open-minded, welcoming of others’ thoughts, curious and solution-oriented
PRACTICAL EXERCISE:
1. Over the next few days, scan your mind and body for Reactive thoughts and physiological feelings. Track them in a notebook.
2. How did the Reactive thought/sensation show up and sound like?
3. What situation may have triggered this Reactive thought?
4. Is there any benefit resulting from this Reactive thought?
Part of what we do in coaching is study these Reactive mechanisms in you. Everyone is wired the same, and certain situations will inevitably trigger you. If you can become Aware of when Reactive thoughts are activated, you can choose to follow the orders, or think of a healthier and more productive way to proceed.
In addition to your own self study, we can use assessments like the Hogan or ELI to help see your coping patterns on paper.
Step 3: How To Manage Your Reactivity
Once you’ve identified your Reactive thought patterns, and the situations which trigger these thoughts, you’re in a position to stop acting on these impulses.
Becoming Aware of when you’re in a Reactive state is 90% of the work
STRATEGY 1: The hackneyed advice to “take a breath” is an excellent strategy. If you can stop yourself from acting on a reactive thought in the moment, you prevent damage from being done. An intentional six breaths a minute (five in, five out) shifts your nervous system out of reactivity back into a calm, intentional state (via the Vagus nerve).
As insanely frustrating as a situation might be, when your fight or flight protective mechanism is driving, key decisions made in the moment are rarely accretive ones.
STRATEGY 2: The next step looks like “depersonalizing the negative event.” A negative outcome occurred, but does not reflect on you being an idiot (or insert any other self-judgmental label).
STRATEGY 3: Finally, re-direct your energy to asking what’s possible now / what’s the best way forward? If possible, engage a friend or colleague, share your frustration, and ask them to help you think about your options, rather than sit in the disappointment of what has happened.
STRATEGY 4: Have compassion for yourself. You’ve worked to be excellent your whole life. Individuals with little reactivity and neuroticism rarely work hard enough to make it to the highest levels of education and finance. But what got you here, is now no longer needed with such intensity. You’ve earned the opportunity to live with a great sense of peace, and a trust that if you follow the process, you’ll get to the right outcome for your and your firm.
This is a years-long practice of emotional self-mastery. However, even the slightest bit of attention directed to studying your reactive tendencies, and working to act more intentionally, will quickly pay dividends.
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Additional Reading
Energy Leadership, by Bruce Schneider, Founder of iPEC Coaching. Bruce is a PhD Psychologist, turned Coach, turned Buddhist. Bruce says that your Energetic Mindset determines your success or failure as a leader. He wrote Energy Leadership in 2007 and laid out these two types of energy: Reactive (Catabolic) and Intentional (Anabolic). He explains that “on a cellular level” in our bodies, Catabolic Energy fills us with adrenaline (makes heroic in the moment) and oxytocin (cancer causing chemical), which breaks down our cells. Anabolic Energy builds our cells and helps us grow and thrive.
A General Theory of Love. Thomas Lewis explores the Limbic brain. All mammals have a limbic brain, wrapped around the primitive brain. Humans have a neocortical brain — responsible for speech and logic — wrapped around the limbic brain. Reptiles do not have a limbic brain. Reptiles lay eggs and slither away from their offspring. Mammals birth babies and then nurture them. This “instinct to give and seek connection” or “to love” is uniquely mammalian. While the human neocortical brain allows humans to reason and talk, the Limbic brain is what leads us to seek “emotional connection” with each other, as well as with our cats, dogs and horses. (Thanks to Coach Josh Gibson for bringing this to my attention.)
Thinking Fast And Slow, by Daniel Khaneman. Khaneman’s describes Reactive Energy this as System 1, which operates automatically and quickly, with little or no effort and no sense of voluntary control — helpful to keep your basic systems functioning, but often unhelpful in making complex decisions. He describes Intentional Energy as as System 2, which allocates attention to the effortful mental activities that demand it, including complex computations.
Mindset: The New Psychology Of Success, by Carol Dweck. Dweck describes Reactive Energy as having a Fixed Mindset, in which one shows up with the answer and stubbornly sticks to their point of view. She describes Intentional Energy as a Growth Mindset, in which one has a desire to focus on learning, increase effort, and a willingness to learn from mistakes.
Start With Why, by Simon Sinek. People make intuitive decisions in the Limbic part of their brain, and then they use their Neocortical brain to back into a bunch of reasons why their initial feeling is valid. Apple lights up our Limbic brain by leading with their Why: “Everything we do we believe in challenging the status quo; we believe in Thinking Differently. The way we challenge the status quo is by making our products beautifully designed, simple to use, and user friendly. We just happen to make great computers. Wanna buy one?”
Your Survival Instinct Is Killing You, by Mark Schoen. Retrain your brain to conquer fear and build resilience. Stop running. Nothing is chasing you.
The Obstacle Is The Way, by Ryan Holiday’s modernized Stoicism. Focus on what you can control. Direct little attention to the rest.
The Only Sales Guide You’ll Ever Need, by Anthony Iannarino. Show up fully present for your clients and listen to what problem they have that they would like your help with. Get your survival needs out of the way, so that they sense you are interested in helping them with their needs.