Work Under High-Stress WITHOUT Burning Out! Sebastien Page

Jim, I am fired up, and I'll tell you why for two reasons. I love doing podcasts. It's so much more relaxed than live national TV talking about financial markets. But the other thing is, I started listening to your podcast over the last couple weeks, and I thought, oh my God, where has this podcast been all my life? I told you, I've become an instant fan. So I'm absolutely fired up for this today.

Jim, I was stressed at work several years ago, and I was stressing about stressing. In my mind, I've been in this business for a couple decades, I should not be that stressed. So I was adding another layer on top of it. And that's when I decided to talk to a sports psychologist. I had an amazing conversation with him. And the takeaway, I'm going to say it right off the bat: this idea of going through life trying to drive yourself to a stress level of zero is counterproductive. It's impossible anyway. And then here's what I learned from sports psychology: optimal performance does not occur at zero stress. In other words, stress – or sports psychologists like to call it activation – will increase your performance up to a point, after which chronic stress is bad, being overly anxious is bad, and ultimately it'll kill you. But there is an optimal point, and that is not zero. Massive realization for me, and that started the spark.

Jim, I want to tell you a quick story about Felix Baumgartner. Does that ring a bell? He's a daredevil. In 2012, he went into a small capsule attached to a giant helium balloon, and he went up 24 miles to the edge of space. And then he did something remarkable: he jumped out and skydived from space. He fell for 10 minutes, four minutes of which was freefall. He was the first human being to break the sound barrier. It's a nice story, kind of lost in 2012. But what's interesting in the context of our discussion and high-pressure situations is that Felix Baumgartner was coached by a sports psychologist every step of the way, including the day of, including the preparation. I'd like to use that story to say that psychology is incredibly important to cure anxiety, depression, and clinical problems. But about half the research in the field of psychology is on the positive side. Sport psychology and positive psychology helps people thrive and helps seek not just high performance, but ultra-high performance as well.

My first conversation with the sports psychologist, his name is Dr. Daniel Zimitt. He lives where I live in Maryland. He's outstanding because not only is he a PhD sports psychologist, and he ended up guiding me throughout the book and helping me with the research, but he's also a top athlete. He has 40 national titles in the sport of handball. So here's someone who has his mental game together and applies it in practice. And this is where the discussions on optimal performance does not happen at zero stress levels. Do you think top athletes are stress-free? They are not. Watch any Netflix documentary and you'll see they experience stress and anxiety. They are able to reframe it, but they experience it. Zimitt, first discussion about sports psychology, starts telling me the story of his best match ever. And it's fascinating because he remembers everything. He remembers where the ball was, what shots he made. There's a point where he almost got a tear in his eye. He's on his knees, it's an extreme shot. He's telling me all of this. And then, Jim, it's the biggest letdown of all time because he goes, 'Oh, and then I lost the next two points.' I go, 'Wait, you lost the game? You have 40 national titles. Your best match ever is a game you lost?' And that's the question about how sports psychology is a lot about losing, not winning. In his mind, that day, he was playing a much stronger opponent. And this represented a complete shift in his ability to play at a higher level. In the sports psychologist's mind, that's what mattered. So it's about losing and what you do with the losses, whether it's in financial markets, whether it's in your personal life, learning the resilience. And I mean, you can take this to an extreme and say, I almost appreciate my losses more than my wins because I have an opportunity to grow.

One of the things I talk about is goal-induced blindness. In the early years of my career, I had goal-induced blindness. I was overworked, I was tired, I almost died. There's a story about this in The Psychology of Leadership. I want to avoid goal-induced blindness. So it comes down to a lot of the things that you talk about in your podcast: mindfulness, periods of rest. Athletes incorporate periods of rest in their training. And generally, being able to recognize when you're running your engine too hot and step back. But, Jim, it all comes back to you're not always trying to be at zero stress. The optimal point is described on something called the Yerkes-Dodson curve. There's actually decades of research on it. It started on Japanese dancing mice if you can imagine, like 80 years ago. But here's the idea: different people have different curves. Different people will optimize their performance at different stress levels, and you can actually change that through training, repetition, reframing the stress. But also, different tasks have different Yerkes-Dodson curves to have different optimal levels of stress. If you're going to do powerlifting or a 100-meter dash, you want to be at a very high activation level. Your optimal performance is going to occur at a high stress level because it's a simple, straightforward task where you need your adrenaline going to perform optimally. But if you're going to do archery or sit down for a math test or a chess match, your optimal performance is not at zero stress, but you're going to reach the peak of the curve at a lower stress level because it's a more complex task. Once you recognize that in your life as a leader, you can avoid burnout because you know where you need to be fully activated and where you need to be calmer and practice breathing, meditation, and other techniques to optimize at a lower stress level. You're just not going around in life trying to push your stress level to zero like I was. That's just not productive. You're just adding another layer of stress. And then you can train yourself. I have this example of Neil Armstrong. When he landed the lunar module, everything went wrong. His average heart rate, Jim, for most of the mission, except when he landed where it spiked to 150, was 75. Neil Armstrong was someone who had flown fighter jets in the war. He had a lot of repetition and acceptance of high-pressure situations and was prepared for it. But other people will get really anxious really quickly and will not optimize their performance at a very high stress level. So task-specific, people-specific, this whole fascinating area of research that I think is pretty much untapped. Like we don't really talk about optimal stress levels enough, in my view.

Jim, it's what we were just talking about. As leaders in high-performing organizations, we become addicted to the goals, hitting our goals, achieving, and winning. I want to be really clear to our audience: having measurable goals, achieving them, is incredibly motivating and it galvanizes organizations. But your question is about what's the most underrated or underappreciated leadership skill: as leaders in high-performing situations or in everyday life, we don't embrace losing enough. We don't embrace it enough. And that's the mindset from sports psychology. I love to talk about what happened with Federer. I don't know if you caught this, Jim. Federer about a year ago at a commencement address went absolutely viral. He was speaking to students and he said, 'One of the top tennis players of all time, he's played 1,500 matches, and I've won about 80% of my matches.' But then he asked the students, 'What is the percentage of points that you think I won?' And Federer lost almost half of every point. His hit rate point by point was 54%. Take that to money management. It's very hard to outperform the markets. You need to develop a small edge that you apply consistently. But if you have a small edge, that's the difference between Federer and a medium-performing tennis player. If you can accept that, as Federer said, whatever game you're going to play in life, you're going to lose, get used to it. And he also said the myth of effortless excellence is just that, a myth. So I think that's underrated: okay, we got something wrong, we made the wrong decision, and maybe we got unlucky. Separating whether it was bad luck or a bad decision is really important. And those aren't necessarily the same thing. But things didn't turn out as expected. Being able to honestly turn back and appreciate the opportunity to learn from it – what should we do different next time, and how can we pivot? This applies to business for sure because you have to make a lot of investment decisions in projects or markets, but it applies in pretty much everything. We all get it wrong sometimes. Embracing it and learning from it is not only liberating, but it works. It really works.

You've talked about this in your podcast, but exercise – I basically exercise every day, but I build in rest or easy recovery exercise. That will reduce your baseline stress level. It's been extremely well researched, and it works: cardio but also strength training. I use breathing. So this afternoon, I'm on my way to New York City. I'm going to be on live national TV on CNBC tomorrow. I'm going to have maybe four or five minutes where the anchors are going to fire questions at me, test my investment ideas. I'm going to be stressed. There's no doubt about it. But I'm going to do four-by-four breathing for the few minutes before I go on the air. Inhale for four seconds, hold it for four seconds, let it go for four seconds, and then wait for four seconds. It's called four-by-four breathing. Whatever breathing method you can use, it's going to help in the moment. So you have your baseline stress controlled through exercise, and of course diet and sleep. Those things all work together. And then you have in-the-moment breathing. I used to think this whole breathing advice was kind of overrated. And I talk about it in The Psychology of Leadership. I go, 'Isn't that trite? Isn't that easy advice?' But if you think about it, it's the only link between what you can control about your body and what you cannot control. Breathing is that connection between the two. And so it's useful and it works in the moment. We all have to find different ways to deal with stress. But I also want to say again that just realizing that you're going to be stressed in a lot of situations, and it's not just about clinical anxiety, it's about performing in life, accepting it, and being able to reframe it into excitement, into activation. 'Okay, I'm ready. I'm going to the top of my Yerkes-Dodson curve. I know my performance is going to increase.' Jim, do you want your surgeon to be super chill and not stressed at all? No. You get the impression if she's really not stressed at all, is she really going to prepare for this and pay attention to the surgery? These emotions are like signposts that we maybe need to prepare or get engaged and focus.

As a leader, you're the one setting the goals. If you don't set goals, who's going to set goals? One way to bring alignment and resilience into your organization is to set very clear, longer-term goals that everybody's driving towards. In my business, within the next seven years, we can grow to one trillion assets under management. We talk about our roadmap to one trillion, and this galvanizes the organization. It organizes the work in ways that people start asking themselves, 'Am I contributing to this big goal we have as an organization?' And if not, I can realign. On a personal level, this is hugely important. Well-researched in psychology and philosophy: your long-term goals, where do you see yourself on your deathbed, are super important to building resilience in everyday life because you zoom out and you gain perspective on your day-to-day challenges. You interpret those day-to-day challenges in the longer-term view of what you want to accomplish with your life. It sounds really soft and philosophical, but this kind of thinking really builds resilience, motivation, and it increases your engagement. Your question is a tough one. If you look at surveys, over half of people in the U.S. are not engaged in their work. There's a bit of a crisis of engagement. Having clarity on long-term goals helps a ton with that.

You kind of gave the answer in your question when you used the word 'purpose.' This is about life, about leadership in companies, but it's about all of us. The question is, what is the true meaning of what I am doing? In The Psychology of Leadership, I have the old story of the three bricklayers. This supposedly happened about 100 years ago. An architect walks to three people laying bricks. The architect asks the first person, 'What are you doing?' The first person is unmotivated, tired, it's hot outside, and they say, 'I'm laying bricks, I've got to feed my family.' The architect walks to the second brick layer, and the second brick layer says, 'I'm a wall builder. I'm building this wall.' That brick layer is a bit more engaged. Then the architect walks to the third brick layer who says, 'I am a cathedral builder. This is what I'm doing. I'm building this awesome cathedral.' Three people doing the same task have a different sense of meaning in what they're doing. And guess what? In business, maybe in life as well, with your family, with your own goals, maybe we all don't think about and frame our actions and reactions in the context of the meaning of what we do. Simon Sinek made the question 'What's your why?' very popular. What I'm trying to do with The Psychology of Leadership is make this practical and show what it means for how leaders can drive themselves to success in their organization. I could walk in my business to someone working on a spreadsheet, and they might say, 'Well, you know, I'm just debugging that spreadsheet.' I could walk to another person and say, 'Well, I'm building a strategy trying to beat the markets.' And then the third person might say, 'I am working to make money for our clients so they can have a better retirement, better financial lives, pay their bills, put their kids through college.' Three people doing the same thing. Different levels of meaning. Greatly underrated question. Why don't we talk more about meaning in organizations? I think we should.

That's a really good question. If you think about risk tolerance in our business, you have to decide how much risk you're willing to take. In the short run, markets can go down, and it's going to be really uncomfortable. But if you're willing to take a certain amount of risk, over time, it's more likely than not that you'll get higher returns. There's a parallel to stress and stress tolerance here. I said every athlete is highly neurotic – that's what I've learned from sports psychology. They accept a certain level of emotions, of ups and downs, of adrenaline in their lives in order to reach long-term high performance. There's an analogy to investing: I'm willing to take more risk in my portfolio, so I'm going to have more ups and downs, but in the long run, there's a meaning to what I do, a long-term goal of wealth accumulation so I can retire comfortably. I hadn't thought about it, Jim, but you just helped me make a really nice association between the two concepts. I just think in general with stress, we have to be clear: it can be bad for you. But it's so underrated how you can harness it, accept it, and reach your optimal performance with a certain level of it. And if you can reframe it, that's even better.

Jim, I'd love to hear your thoughts on it as the brain expert, but I'll tell you what I talk about in The Psychology of Leadership that I've observed over two decades in high-performing businesses. When the IQ is engaged, when we're having an intellectual debate on ideas, generally speaking, as human beings, our EQ tends to go down. So if we're having a disagreement on something mathematical or complex, it might become confrontational, and our EQ might go sideways. I've always thought that's fascinating because in order to be good investors, we actually need to kick ideas around, have ideas confront, not take the ideas personally, and uncover our best thinking through the debate and competition of ideas. I've observed in business over the years that it's a little bit like two pistons: if you crank up the IQ in a decision and you get very intellectual, famously academics just like to debate all the time, and it gets confrontational. It's difficult to keep your EQ up there. And then if there's stress and tension and it's an intellectual debate, then it's even harder on the EQ. What do you think about that, Jim?