After 15 years on Wall Street, I use a 100-year-old psychology framework to show bankers and hedge funders how to get to the top (2024)

I’ve spent 2,000+ hours listening to my clients talk about the behavior of their colleagues. Here’s a simple framework constructed by psychologists 100 years ago that will help you see what I see. You’ll recognize each of your colleagues described below, and become aware of your own ticks that may be limiting your perspective and success.

Think of four types of personalities and behaviors:

1. Dominant: decisive, authoritative
2. Improv: outgoing, “we will just figure it out”
3. Steady: wants to help others, accommodates clients wishes
4. Conscientious: fact-driven, anal retentive

Here’s how these four personalities show up:

Investment Bankers

• The D decisive banker sells clients with their confidence. They can sell alpha CEOs on their mutual presence, provide a voice for C-type clients or drive direction for I-type clients. When their D goes too far, they are perceived as not listening, and at times as ego maniacs.
• The I “improv” banker loves any new idea, meeting or client. A meeting is a potential opportunity to evolve a relationship or win business. It’s a ‘hands on’, ‘figure it out in the moment’ kind of approach. Once the sale has been made / client engaged, this type of person loses interest and moves to the next exciting challenge. I bankers are often criticized for moving too quickly or being ADD.
• The S banker patiently services clients and builds trusting relationships. They create a feeling of loyalty and service with the client. I worked with an incredible partner at Goldman who patiently covered clients, rarely opening a pitchbook and instead engaged in a dialog to help the client get clear on what they needed. It’s a different style relative to the Ds or Is bankers who look for a quicker kill.
• The C anal retentive banker is all about the details: getting it “right,” being thorough, methodically following the pages of the book, following checklists. Order is the key. This banker is ideal for processes with lots of moving parts and other complexities. When lawyers switch into banking, they often take this approach. A too C banker can lose sight of the commercial opportunity at hand.
• Note: If I and C can partner, they are a great team to deliver the full package for the client.

Hedge fund portfolio managers and analysts

• “I’m right and I’m all over the details”… D & C personalities dominate hedge funds.
• Is are wonderful idea generators, but often get shaken out over the life of an investment as the market moves.
• S types tend to get runover in the hedge fund world. Your investment opinions are wishy-washy, we will take whatever you choose to give, and we will take credit for your work.
• C obsession with detail, process and proof and D stubbornness and confidence provide the foundation to do the fundamental work and hold an opinion through the vagaries of the market’s movements.
• While good PMs move out of the C into the D (and to I for fundraising), many senior PMs never get out of the weeds, as their focus and magic is in understanding the details. While this may lead to consistent performance and rising assets under management, it’s the number 1 source of burnout.
• Overly C individuals who actually make it to PMs often have difficulty scaling GMV and adequately sizing positions, for fear of uncertainty and downside risk. Similarly, I types without enough C lack conviction to scale great ideas and tend to track an index.
• While a lot of D can be a blessing for many PMs, it can also be their undoing when they become quixotically attached to their conviction despite overwhelming market evidence to the contrary. Bill Ackman is a leading example of this: he will to go on stage with his view, and then ride the position into a world of pain – he’d be so well-served by learning to say “I was wrong.” Other PMs like Dan Loeb are a bit more D and I – when the market tells him he’s wrong, he’s happy to change direction and swim to another wave.

Private equity professionals

• Most private equity professionals are D to the core – they are sure of their view, and willing to conduct a campaign to build a consensus around their thesis internally and then drive value at portfolio companies.
• The best PE professionals have an ability to modulate between C and I – from all over the details of the numbers and contract/covenants, to politic and friendly enough to build consensus and rapport with management teams. There’s not much need for S – PE is about selling expensive capital, deploying assets under management and monetizing results.
• Emotional volatility and vulnerability are especially unwelcome here – other personalities may experience these professionals as a bit cold or calculating.

Strategies for dealing with each personality type

• When dealing with a D, stay focused on the result. They could care less about your feelings, creativity or need for perfection. They want it done.
• When dealing with an I, give them room to run though many ideas at once. Help them tie it all together or extract a theme to create a next step. These types are prolific idea generators, but need to be bridled for maximum impact.
• When dealing with an S, tell them how they can help. Thank them for all of their work, and pause to give them room to express their opinions. These are the most valuable, loyal workers, so take the time to water the garden and sustain the relationship over time.
• When dealing with a C, use data and don’t hope for too much fun or excitement. To help them move towards a decision, ask them what they would need to know to move forward – this will guide the conversation and limit the analysis paralysis.

Justin Doyle is an executive coach who works frequently with employees in the finance industry.

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