#3 Henry Fernandez: A Journey of Bold Vision & Exponential Growth

I would say Winston Churchill and for a number of reasons. The first one, he was irreverent, eccentric, some people sometimes accuse him of being crazy. We'll talk a little bit about that borderline between genius and craziness. But a lot of what he did was he had a mission. He had a strategy. The mission in his mind was to free the world of Nazi Germany and Hitler. He had a strategy how to achieve that. He needed to sell that strategy to the British people and the world, especially the American people, and he needed to inspire people in order to keep the faith over a long period of time. And he needed to demonstrate determination. Especially in that famous speech that he gave when he said never give in, never give in, never, never. He basically said we are not going to be defeated. We will prevail. And he was able to navigate an extremely difficult period of history, especially for the UK, during that time, especially from the summer of 1940 when France was run over by Nazi Germany to November 1941 when Pearl Harbor was attacked by the Japanese and the Americans came into the war. So I think you have a character here that was highly unusual. He was extremely eccentric and was able to create major achievements in life at the time. And he had that incredible confidence in himself, his ability to see through problems. And eventually, he didn't know how he was going to solve it. I'm sure in moments of weakness he thought that Germany was going to invade the UK and the UK will cease to exist as an independent country. I'm sure he had those nightmares, but he projected an image of we will figure out the path. We will get there. I don't know what it is. I don't know how, but we will get there. So leaders in business and in other organizations that have achieved incredible things in life have this ability to see the future, this ability to inspire people to that future and work backwards and say we'll figure out the path. Leaders like this have an incredible optimism, an unshakable belief in the future of what their cause is and an ability to be confident enough that even if they don't have the answers to navigate towards that future, towards that end, they will figure out the way. And Churchill is one of those people that epitomizes that.

You always have those, for an entrepreneur typically, there are a lot of traits that you need to have as an entrepreneur. But two fundamental ones are that unshakable belief in what you're trying to achieve that is going to work, that is going to create a company or create a new product, create a new revolution or whatever. And secondly, that you don't yet know the path but that high level of confidence that you will figure out the path to get there.

Absolutely. I never met anybody who achieved an incredible feat in life who doesn't have that optimism, sense of purpose, galvanizing people, inspiring people and creating this environment around him or her that we will figure out the path, we will figure out the way, we will craft a way to get to that future. And there are not too many people in life that I know of that have achieved great things that don't have that.

Yeah, I think one of the most difficult things for human beings. We're incredible creatures with a lot of attributes, but one of the things that we don't have because of our heritage is long-term perspective. The ability to see five years out, 10 years out. And it's not that we're not equipped to do that mentally, analytically, emotionally. It is more that we do not have the predisposition to spend time thinking about what the world will look like or what a particular situation will look like that far out. And the people that do that, the people among us that do that are called geniuses because they have this ability to see how the world would look like 10 years out. And it is not because they're true genius. It's not that they have an IQ much higher than ours. They just spend the time thinking about it. They have the ability to sit down and have the patience to shape it, to try to see it, to try to develop it and to try to then work backwards from there. Most of us, most human beings don't like doing that. How many people in your life do you know that will tell you what they're doing 10 years from now or even five years from now? Even people that you know are planning vacations, how many people plan vacations one or two, three years from now? They don't, right? And the worst of us plan vacations like three months ahead of time as opposed to a year or two ahead of time. So that tells you that's how we're made up because we're made up, we're human beings, human race made up of thousands and thousands of years, tens of thousands of years of evolution. And that evolution never taught us to be long-term because we needed to focus what to eat that day. When we were hunters and gatherers, we needed to focus. We weren't going to focus what we're going to do a week from now. And the most you could do was if you live in a cold weather, you needed to focus on how to survive the winter, but that was it. You couldn't go beyond that. So how can we as a human race retrain ourselves that easily when we have had tens of thousands of years of shaping us into being short-term? It's very hard. But that's what a lot of incredible people in life have, that ability to shut the short-termism and focus on the long term and have that long-term perspective and they achieve great things in life.

First of all, I think I've been blessed all my life with having developed an ability to dream about the future and not only dream at night but daydream about the future. So when I was a teenager, I tried to think in whatever professions I was contemplating at the time, trying to think about, okay, I'm 18 years old, I'm 16 years old, if I were 30, what would I look like in that profession? Whether it was a banker, whether it was an investor, whether it was a politician or whatever, I would try to analyze myself at the age of 30 and then daydream about it. When I honed in to the specific areas, when I was growing up, I wanted to be a politician helping the development of my native country of Nicaragua in Central America. So when I was dreaming about it, I would actually envision myself creating certain policy and the effect of those policies and what they will mean for the country, what they will mean for development, what they will mean for wealth creation for the country and all of that. And I was very comfortable in that environment. I was a little more of a loner and an introvert. I eventually forced myself to change but I was definitely a loner and an introvert. So I was very comfortable in my own skin. I was very comfortable being alone and not around a lot of people and thinking about these matters and then working backwards to see that. So that taught me the incredible power of first of all dreaming and secondly creating an image of yourself 5, 10, 15 years from now and more importantly working backwards from that image and say what are the experiences, what is the education, what are the network of contacts that I need to have, who do I need to learn from to become that person?

Absolutely. Even today, I'm in my mid-60s and I envision myself at 75, at 85 if I'm blessed to live to that age, at 95. So I said to myself what are you going to be doing at 95? What is the kind of life you want to have if you're lucky enough to get there. And then I said I envision myself with good health and without good health and how would I respond to that. And obviously the shorter term for me is 75, mid-70s, because about 10 years from now. And I think about what do I want to be, I think about what is my position in the company that I run, what will be the activities I will want to be doing, and what would I want my family to be? What do I want my kids? What relationship do I want to have with my kids? I even think about where would I want to live? Would I want to live in a place that is very close to my kids and my grandchildren or do I want to be in a distant location and what are the implications of that? I haven't resolved that but what are the implications of that? So that's on the personal side. On the business side I try to envision my company MSCI and what it will look like 10 years from now. What size of a company will it be? How many employees in what locations? What clients do we want to have? What products do we want to offer? What size of valuation we have? What return to my capital providers will I provide during that period of time. So I call that my 10-year corporate strategy. And then once I look at that with my colleagues at MSCI then we work backwards. But obviously we don't live in an isolated world so in order to understand a company like ours which is very global I need to develop an image of what will the world look like 10 years from now, what would the role of China be, what would be the role of Europe, what's the role of America, what's the role of emerging markets, what's the role of capitalism where we are obviously a provider of solutions to the global investment and finance industry. So I need to envision what will the global asset management industry look like? What will the private equity firms look like? Better yet the alternative asset managers look like, what size will they have? What will global wealth management look like in this context of development of management of savings for wealthy people in the world. So you need to have a paradigm of your environment 10 years from now, you need to have sensitivities around it. How about if it is dramatically different one way or another what it will look like. There are times in which I think about we have lived in America largely in a period of peace and prosperity since World War II. We've had the Korean War, the Vietnam War, the Afghan War, the Iraqi War, etc. But those cannot compare to World War II. So therefore I try to envision a bad scenario which is what if the world is at war for a period of time, what does that mean for survival for me and my family, for my business. You don't know how shape that will take but you need to be ready for that. When I was growing up I learned this old saying that fortune favors the prepared. So I have no problem going through scenario after scenario in my head and trying to see what my response to that scenario is. And frankly, a lot of people, family members, friends, colleagues at work say, 'Henry, you're crazy. Why are you thinking about that? Why are you wasting your time?' And you know what? I like it. It's not as if it's a torture for me. I like figuring out different scenarios. I like playing them out in my head. It's the kind of exercise that makes you better, makes you more resilient. And actually, it's the kind of exercise that makes you even more confident because once you figure out a scenario that is good and that you prosper in it, you feel very good about it. So that's among the things that some people that are always prepared do.

No, I don't block out time for this. I do it whenever it presents itself. So when you have a long weekend and you have a little more time, I sit there and maybe watching a movie or maybe reading a book and sometimes it takes me a long time to read a book because after 20 pages in the book, I start daydreaming about something that the book did. So I spend 20 minutes reading and then an hour daydreaming about something that came out of the book. And then I go back to reading the book. So it takes me a long time because I use a book to sort of judge my ideas, to force me to think about things that are being said. But it could be a movie of any kind. It could be an action movie, could be a drama, could be whatever. But I'm always looking for that stimulus that is going to make me think about things not just be passively watching or passively reading. So this concept of blocking out time to think has never worked for me. When I've done it, I don't want to think about it, when I've done it, I'm too tired or something else comes up. So it's not very conducive to creativity to do that. I grab the moments whenever they come. I could be at work. I could be driving. I could be on a plane. I could be watching a movie. I could be talking to my kids. And all of a sudden, something prompts you. There's a stimulus there. So, a couple days ago, I was talking to one of my sons. And we were trying to talk about what it means to have multi-generational success, for example. He's 25 years old and he's working right now. So imagine a 25-year-old having a discussion with me about multi-generational success. So I said what about your kids? How are you going to teach your kids? How are they going to teach their children? So we start talking about the families that have had multi-generational success, whether it has been in banking or in investments or whether it's been in the arts. You have a lot of families that have had generations of artists. So what does it mean? What is the secret sauce for a family to have multi-generational success? So that's an example of we were just having a conversation about something and his career and what he wanted to do and all of a sudden this turned into that discussion. So I let it go. We stopped talking about his part of it and we got into a one and a half hour discussion about multi-generational success. So again you got to take the opportunity when the opportunity comes and capitalize on it because it is there, it is that moment and if you let it go it may not come back, that conversation may not come back for a long time.

Definitely see it in myself. I try very hard not to project it. I try very hard not to give that impression. Others do the opposite. Others try to project that impression of craziness so that they are viewed as disruptors or it makes their job easier if they project that image. I try not to but for sure there are moments like that. I had a Eureka moment a little bit like that before I went to graduate school of business. I was in a PhD in economics at Princeton University and I was trying to master the subject of macroeconomics and monetary policy, monetary theory and I was going after it with such a vengeance, with such a zealousness that there was a period of a few weeks in which I saw the abyss. And I tell myself and I remember vividly that period. I said, 'Henry, if you push a little harder, you're gonna go nuts. You really want to go crazy. You may not come back from this because you're forcing yourself so out there in these theoretical concepts and all of that that what about if you don't come back? What about if you just damage your brain and you just don't come back?' So I had to stop, I retreated a bit. In my career, the biggest things that I've done, whether it's a large acquisition, whether it's fighting a downturn in the company or whether it's fighting activist investors or trying to push people to the frontier of what we do, I feel that I am at the outer edge. I'm pushing myself and pushing people to a sphere that some people could consider crazy. But I try to do it with a sense of responsibility, with logic as opposed to just trust me. And that's a little bit of the Winston Churchill discussion we were having earlier. There were times in which this fellow was probably crazy in thinking that they were going to win, in thinking that he was going to convince the Americans to come into the war and things like that. So I think there is an element of irreverence. I normally call that, I don't call it craziness. I call it irreverence in incredible leaders and people who achieve great things in life. They lack that reverence. I normally sometimes call this also lack of obedience to authority. They challenge the status quo. They challenge the normal thinking. They challenge the social norms. They challenge the boundaries of success or power or whatever. And that's what motivates them. That's what gets them over the line to do great things in life. And that's no different than the social revolutionaries in the world. When I was at Georgetown as an undergrad, I studied economics and political science and much more history and political science and economics. One of my fascinations was to study revolutions in the world, a lot of it because my own country was going through its own political revolution so I needed to understand it. So I studied the Russian revolution, the Mexican revolution, the American, the French, the Chinese revolution and all of that. These are social revolutionaries. These were not, people call them political but they had a different idea of the organization of society. And therefore those people really stretched the envelope dramatically. You think about the American Revolution. It was a completely new form of government that they were trying to create. So those people were irreverent. Those people had no fear. They were out there in the frontier of thinking and that's what I pride myself to always want to be. Of course, I don't want to cross and fall into the abyss, but there have been times in my life in which I've been very close to it, but thankfully I pulled back.

The best thing that can ever happen to somebody. Of course you don't want to have a fatal failure. But based on my own experience, I wouldn't be where I am today if it hadn't been for all my failures. And I think failures plant the seeds for success in the future. And again it's not that we walk around every day wishing that we fail, but we will fail. It's just the law of nature that we will fail at some point in something either socially in our families, in our friendships or in business or in your work environment. And therefore the issue is not whether you're going to fail or not. The issue is what are you going to learn from that failure in order to apply it to future circumstances. And there are a lot of people in the world that when they fail, they don't want to talk about it anymore. They want to bury it. They want to forget it. I'm not a master at all, but when I fail at something, I go through it thousands of times. Why? Why did this happen? What did I do wrong? What decision in retrospect I should have made better? And I don't do it because I want to torture myself in the failing situation or reliving the failing situation. I just want to learn from it. I want to learn from it so that in the future I can apply those lessons. It's very hard. It's harder to learn from successes than to learn from failure. And it's normal. When you have a lot of success, you're high, you feel great, you talk about your success, but when you fail, it hurts. It hurts so badly that again some people don't even want to talk about it. They want to bury it. But if you master the art of enduring that difficulty and that pain and learning, you're going to be successful. So my own company MSCI, when I took over this failing business at the time, I had failed three times. And at least one of them was pretty bad. But because of my ability to learn from those things, I didn't have all the learnings and all the lessons when I created MSCI but for sure I had an enormous amount of experience in failing. So I had failed in business three times. I had to leave a country because of a communist revolution. And for the years, I think it was at least three or four years after that, it was one of the worst periods of my life. Because I didn't know, I was a political refugee. I didn't know where I was going to live. I didn't know if the United States was going to let me live in the country. I didn't know what career I was going to have. I was lost. I was lost. And I went through an enormous period of examinations, retrenching, rethinking. I ended up honing in on a theme, which is what is the meaning of life? What's the purpose of life? So it's not just failure in business. I had enormous failure socially which is I was part of a society in a country called Nicaragua. I could no longer be part of that society. I didn't have any more friends in that society. I didn't have any belongings. I didn't have any attachment. But I didn't have anything else. So that's a failure that you need to deal with. That's a big deep hole that you need to dig yourself out of, similarly to a business failure. It could be a personal failure also like a marriage, or a big setback in your family with a family member. I grew up, there were five of us. I was in the middle and my oldest brother who was 10 years older than me suffered from very severe cerebral palsy. So you have to grow up with that adversity. How do you help him? How do you make sure he doesn't die? So anyhow, life presents to you a number of challenges, some of which are failures. And if you disregard them, you're not going to be a hugely successful person if you don't learn from them. If you don't use them as a catalyst to do better things in life, you are disregarding an incredible ability to learn.

Yes. And they do it formally. So there's no stigma to it. That's the key part. A lot of people don't reexamine their failures frequently because there's a stigma to it. And you feel that you lost, you feel that you failed, you don't want to feel like a loser in life. So the exercise of going through what happened when you were a loser is not a pleasant experience. But you just got to learn how to do it and you got to take the stigma out of it. You got to take the torture out of it. You need to train the people around you, whether it's your family or your friends or your colleagues to be open-minded and have an open discussion as to what happened. So let me give you an interesting personal example about that. Over the course of my life, I've had close friends that for some reason or another, our relationship got really strained. And I didn't know why. I had no idea. It's just that the relationship got really strained. So I muster the courage to go to those people the handful of times in my life and said to them look I don't know

I don't think you don't like me anymore. I don't think you want to have a relationship with me anymore. And that's perfectly fine. But I want to know why. I want to know why. If you want to move on because you have other friends, it's okay. But I want to make sure that if I did something wrong, I want to hear about it and I want to learn from it, right? That if I did something wrong. And it's not easy to muster the courage and look and confront somebody as to why they don't want to hang around with you, why they don't want to call you, why they don't want to be with you. You know, most people just move on. Move on. Right? So that has been the source of, first of all, I felt very proud of myself to muster the courage to do that, but then secondly, out of those circumstances, incredible deeper friendships came out because we were able to confront the issues. We were able to correct the circumstances, correct the misunderstandings that could have taken place and develop a better relationship going forward. And I've done that in business, too, a few times. You know, there was a company that they always thought we were the enemy and they were always trying to hurt us. So, I called the CEO of the company and I said, 'Can we have lunch?' And so I went and explained, I said, 'What are we wrong?' You know, again, maybe it's just business. Maybe it's just the way you operate, but tell me what have we done to you to deserve this treatment. I'm not here to complain. I just want to know. I just want to know so that we don't do that to other people. So, unfortunately for me, the person said, 'Henry, we think of everyone like that, too.' I said, 'Okay.' So I did not have a lot of respect for that company, of course, but because they thought of everyone else as being the enemy, which in my world, I always think of everyone, even competitors, being my friend. I always go around the company saying I have never met a competitor I didn't like, right? Because either they help me get the company better or it's a source of potential partnerships that we can do business with in order to serve a common set of customers, right? But anyhow, that's another circumstance in life when something is failing, something is not working and you have to have the courage to go confront it and to go figure out what the causes are of this problem and try to do something about it. And sometimes you're able to and sometimes you are not able to and that's okay, but you've learned from the experience.

Absolutely. And I think you called it right, which is I didn't describe it that way but it is an ability to have discomfort. It is an ability to sit in a situation that is highly discomforting, that is going to create emotions, is going to create pain to relieve something that you didn't do right. And I attribute my ability to do that because my upbringing. You know, my parents nurtured me in a way to have confidence, which was great, but I was also a little bit of a loner, a little bit of a nerd, a little bit of an introvert, and therefore I was comfortable in my own skin. And that's what people normally say, you're comfortable in your own skin, but sometimes you may be comfortable in your own skin but you may not be comfortable in discomfort. So I think you called it right.

You know, I don't think it's pain. You know, sometimes it could be a little bit of pain but I don't think it's generally pain. I think it's just being comfortable with failing, is being comfortable with your ideas being rejected. Your vision of the world being called crazy. Is comfortable with people looking at you and say, 'Wow, I mean, you're going too far. You know, you're pushing people too much.' And being fine with that. And there is a sociological element of, I think, people like that which they're comfortable being rejected by society is a point, right? They're comfortable being rejected by society. Most human beings want to be accepted by society. They want to belong. They want to be accepted. So an example of a personal example of that is, you know, maybe my English is a little better right now. It's not perfect but it's a little better but it wasn't as good when I started on Wall Street. So I will go to meetings and I will notice that when I spoke in meetings, people had to pay a lot of attention because they needed to understand exactly what I was talking about. And there was a partner in the firm at the time that came over to me and said, 'Henry, this is a problem. You need to go to speech school so that you perfect your language so that you can speak like an American, like a native American, like an original.' And I went home and I thought about it and came back and I said, 'You know what, I'm perfectly comfortable being different. I don't have a problem being different.' So I will walk into a room and I had no problem being the only Latino in the room, the only guy who didn't speak the language well, the only colored people, you know, and I had no problem with that. I was comfortable in my own skin. I was comfortable in that social environment. And if anything, I told people, I said, 'You know, if my name were Joe Smith and I were in that meeting and I said something, nobody will remember. But since my name is Henry Fernandez and I speak with an accent, whatever I said, somebody will remember.' So it's a competitive advantage to be honest with you. It's a competitive advantage. And at the time that I was in my early career, Henry Kissinger was a big figure in the political world. And I used to point to Henry Kissinger. I said he, this fellow speaks very slowly and with a very heavy German accent and he has no problems influencing people in the world. So therefore there is another trait here of people that achieve great things in life and those are they're comfortable being not accepted. They're comfortable being rejected. They're comfortable, and they don't try to conform, they don't try to belong, you know, of course we all do, but it's a matter of degrees, right? So that is something else. So therefore I'm going back to your question. I don't think it's a question of pain. So if you want to conform, if you want to be accepted, if you want to be part of the traditional thinking, the normal thinking in any endeavor in life, and you're not, it's going to be very, very painful for you. But for a lot of people that create new things, it's not pain, you know, it's part of life and they're comfortable with it. Actually, some people even seek it. There are people in the world that have created big things in life in which they went out of their way to show themselves as being deviant from society accepting them. There have been writers, there have been poets and there have been a lot of business people like that. So Steve Jobs being one example of that, right? He was very comfortable.

Absolutely. I think when I was growing up, you know, my family, a lot of who you are is a product of growing up or your experiences in your 20s. You know, that doesn't mean that your later experiences in life don't shape you. But the biggest shaping of your life is in your early years, you know, as when you're seven, eight, ten, teenager and in your 20s you get shaped. So I always go back to whenever I try to explain something that I am, the first thing that I do is go back and see if I can explain it through my upbringing and if I cannot explain it through my upbringing it must have been later on in life and therefore I begin to examine experiences later on in life which are many and they shape you too. So when I was growing up, I grew up in a military family and the society of my country was kind of divided into three camps. There was the business elite that ruled the economy of the country, the military elite who basically established law and order but was the real power in the country, and there was obviously the rest of the population. So I was part of that military complex and the military complex did not mix and match, did not mix up with the business part. And that was a way for the autocrat of the country to divide, so divide and conquer, right? You don't let people create coalitions that can overthrow you. So it was interesting because part of my family, my mother's side, were all part of that business elite, business complex, and my father obviously was part of the other one, but I couldn't really spend a lot of time in that. So I was not accepted, right? I was rejected by that and I had to stick to my upbringing in the military, with the military families, the political family, it was political and military. Think about it, political and military versus the business. So I hung around all the politicians, I hung around all the military people, and therefore when I was growing up, I didn't know anything about business. Business to me was like the most foreign thing that could ever happen. But I was comfortable that even though I wanted to have friends on the other side, I wanted to do this, it was not part of my reality. And when I tried it a number of times I was rejected or pulled back, and I was comfortable with that. So anyhow, when I look at later on in life, my ability to navigate in certain circles, whether it's political, economic or investments or social circles and the like, honestly I go in it and I am who I am. I try to be who I am and I don't care. I honestly don't care if they like it or they don't like it. Fortunately for me, most people have liked it. So I belong to a lot of circles, political circles, foreign policy circles, military circles, obviously investment banking circles, investment circles and other businesses, and I can navigate easily from one to the other without any baggage, without any constraints because either people like it or they don't and if they don't like it, tough luck, right?

So my father was an orphan, his late father's second wife who was a very well-to-do lady and extremely well-to-do lady in the country and provided for him. But he wanted to make his own life and therefore he joined the military academy and he became a member of the military. And so a lot of his teachings, a lot of his experiences were about charting your own course, determining your own future, not being told by family members who to become. You're the master of your own destiny and you got to follow what you like. You got to follow your passion. You got to follow that. So I learned a great deal from him in that. Secondly, he was a bit of an intellectual even though as a military person, he was more of a military intellectual. And he studied for about six, seven years in graduate schools in the US. So what they studied in graduate schools in the military in the US is about strategy. It's about leadership. It's about management, you know, management of a military operation is about leadership and all that. So therefore he was able to teach me a lot about leadership, a lot about strategy, a lot about management, even though it wasn't business management, it was the management of an armed forces, it was about leadership in the armed forces and all of that. And since he noticed that I liked it, he would take me, he would read books, he would tell me about his heroes. Remember, he was a product of World War II. That's when he came to life, not to life, but when he was in his 20s and 30s. So therefore, he would teach me about Churchill obviously and Franklin D. Roosevelt. He would teach me about George Patton and the character, about Montgomery as a character, about Eisenhower as a character, about George Marshall as a character. But the interesting thing was he wouldn't tell me who's better and who's worse. He would just say here are different characters and they have different elements of success. They have different personalities and all of that. So that was his life. His life was examining World War II and then the Korean War. So I lived in an environment where that's what I learned about leadership. That's what I learned about a lot of things. And then of course he would love movies. So he would take me to movies of World War II and movies about Eisenhower and the decisions that he made and the invasion of Normandy and Patton and when he was trying to run through Europe in order to get to Berlin and the compromise as to who took over Berlin. They let the Soviets take over Berlin and why and the political implications of that and all of that. So it was like a theater. It was like a novel, right? It was like a soap opera so to speak for me and with all these characters. But then later on in life I realized that you could take that and apply it to business. You could take that to apply it to the geopolitical world. And so he unintentionally was giving me all the tools to analyze problems, to analyze managerial issues, to analyze logistical issues, to analyze laps of leadership, to analyze bad political decisions and all of that. So a lot of what I learned about business, I actually didn't learn in business. I learned it in that life which I then applied to business as I went to business school and I joined investment banking and then I created MSCI. I had that incredible schooling of all of that. So that was him in briefly. My mother was an extremely resilient, determined woman. There was nothing that would faze her. There was no obstacle that she couldn't overcome. There was no difficulty in life. She had an incredible sense of optimism. She was very religious. And religious people come in two forms. You either have very strong morality or you have very strong faith or both, of course, or both. But a lot of people are very religious, but they're very moral people. They don't have a strong faith. My mother had an incredibly unshakable faith, religious faith. So that faith allowed her to never be cowed by any problem, you know, incredible optimism, incredible sense of purpose, incredible sense of optimism, of positivism in the world. And she was extremely demanding. You know, I was what in America we call a straight A student, meaning I was in the top of my class and occasionally I would get a grade that was one shade below the top grade of the class and I would go home and present my grades to her and she would say, 'Oh, this is fantastic. This is fantastic. You're doing so well.' And she said what happened in this course and I will say, you know, oh there was an exam I didn't do as well or whatever and she will say this is great next time try better, you know, next time try. So it was never enough unless it was perfect, right, for her. So over the years that is still in all of us, my siblings, an incredible sense of accomplishment. You needed to achieve things. You could not go home and be mediocre. You could not, you will not eat at home if you were mediocre, you needed to do the best. And she would always, she also would tell me that competition was not a competition with other students. She said your competition is your ability to perform yourself. Don't compare yourself to others. Compare yourself to your abilities. And if you're not maximizing your abilities, you're losing. You're losing. But if you feel that you have pushed your abilities to the maximum and you're average or below average or whatever, it's okay. That's what God gave you. Your God gave you an endowment and you have maximized your endowment. And if that's all you've done and that's all you can do is maximize your endowment that God gave you and everything else is fate basically, right?

There are certain things that I look for that are necessary but not sufficient for success. But they're necessary and then I focus on the things that are sufficient for success. So you go through an interview, you go through all the necessary things. Is this person smart? Does this person have relevant experience in what you're trying to do? Is this person motivated to take the job? Does this person want to work hard and a lot of things, right? So you go through a set of necessary conditions. Then once I check the box in all of that, then I go for the real things that are going to make the difference. And there are a number of questions that I ask that I'm trying to determine. The first one is how much intellectual curiosity the person has. If the person has no drive of curiosity, it's not going to do well in our business. You know, I said how much drive, how much self-driven motor does the person have to learn new things, to explore new ideas, to think about new concepts. The second one is how ambitious is this person? How irreverent? If you want to go back to that, how irreverent is this person? Obviously, you can find people that are totally irreverent like entrepreneurs, but I'm trying to get as much of that in somebody that joins the company as I can. So, because that intellectual curiosity, that drive and all that, the other thing that I'm trying to determine is passion. How passionate is this person about this field or what we're trying to do. And you could have a very strong intellectual curiosity but it's about music, for example. You could be very driven, very ambitious about music but we don't do music, we do investment. So therefore you need to find is this person passionate about the investment industry, the finance industry, or is this person passionate about opera. And if he's passionate about opera, he or she is going to work 9 to 5 and go to the opera every night and that's not what I want, right? So that's another, so I ask questions like that. The other one is, you know, long-termism. So I normally have a couple questions that people look at me a little bit weird. And the question is, what do you want your tombstone to say about you? And they said, wait a minute. I mean, I thought this was a job, not a psychology test. I said, no, no, I want to know what your tombstone will say about you. And so that tells you a lot about the person. If the person says, oh, you know, great in business and all of that, you don't want to hire that person because that person has no life, no kids, no family, or at least doesn't put a lot of value. So it's a little bit of a balance how the question gets answered. The other question is what do you want to be doing 10 years from now? And that throws off a lot of people because it goes back to this long-termism. I said 10 years from now, wow, I don't know, you know, I want to be working at MSCI. And I said, no, no, I don't want that answer. What do you want to be doing 10 years from now? That's a question that I try to ask to get a sense of long-termism, but also a sense of ambition. And the person doesn't want to tell you, I want to take your job because that would be a little bit too aggressive. But that will tell you how driven and ambitious the person is in some respect. So anyhow, so it's not like one attribute is a quiver of arrows and there are some arrows that are necessary for defense so to speak and other arrows that are going to be the offensive arrows. If you don't have the defensive arrows, you're not going to last. But if you're going to really be outstandingly successful, you need to have the offensive arrows in the quiver.

You know, we have gone through a lot of turbulent times in the company, but not as turbulent as my life, that's for sure, right? So my life, especially early on, the first say 25, 30 years was extremely, extremely turbulent. Right. And therefore I learned a number of things. The first thing is, you know, the turbulence doesn't last forever, right? A lot of people when they're in the moment of the turbulence, they think it's going to last forever and therefore they bail out or they get desperate or whatever. And I said to them, we just got to bunker down. We just got to bunker down and it will go away at some point. Maybe it'll take a year, maybe two, maybe it's three, you know, maybe it's forever, but if it's forever, we're not going to be around. So, don't worry about it, right? So that instills a sense of dimension, a sense of time dimension on the turbulence. The second thing is you just don't take the turbulence on the chin. You try to do something about it. And it is in turbulent periods, it is in periods of crisis that the best opportunities come. You know, I have a saying at MSCI, a crisis is a terrible thing to waste. So you just don't become passive and take the beating, no, you create strategies as to how you're going to react to the turbulence and how that is going to make you better. So when you come out of the turbulence, you come out ahead of everyone else because the majority of people in business actually retrench in times of turbulence. We actually strike in times of turbulence. That's when we, among the bigger companies that we have bought, have been in difficult times. I am a contrarian. I expand when things are bad. You know, I remember when I first came to Wall Street, there was a saying that you buy when there's blood in the streets, right? That's when you buy when there's blood in the streets. You know, that's going to make you the... Now, what they didn't tell you at the time that there may be blood in the street when you buy, but there may be more blood later on, and therefore your asset goes down even further, right? But you're never going to reach the bottom. You're going to get to the bottom, but you strike, you expand, you hire people, you do this in bad times because what happens in companies is you're trying to create competitive advantage over the long term. Competitive advantage, very hard to create competitive advantages in boom times because in boom times people are throwing money like crazy, the go-go years and all of that. So it is very hard to create a huge distance with your competitors. But if you in bad times, first of all, get alignment with the team, a sense of purpose, a sense of dimension, a sense that this is not going to last forever. Secondly, you come up with great strategies to strike and to expand and all of that. When you come out of the turbulent times, you're going to be way ahead of everyone else because every other competitor is going to retrench. It's human nature. They retrench. They don't go into the problem. Their boards don't let them go into their problems. Their management team, their own personalities. So, I train my board directors that we will expand in difficult times. I train my management team that we will go in the rainstorm when things are bad in order to create better products, better service and hire better people and all of that. So that's how you do it. And then obviously you need to inspire people, you need to keep them faithful, you need to keep them believing during the difficult time just like we were talking about Churchill before. You know, it is easy to despair. So 20, 30 years ago I spent a lot of time examining the Shackleton expedition to Antarctica and why their team survived and came out alive and the other team of the other ship didn't survive. And that is because you need to create a sense of purpose, a sense of optimism, a sense that yes we will come out of this issue. We will come out. We will prevail if we stick together. So that's how you manage in those difficult circumstances.

Yes. Yes. But it is against human nature. See, there are a number of things that if you want to be an exceedingly good person, you know, either family member, friend or business person or accomplish, you need to study human nature. You need to understand human nature really well. If you do, it's going to give you an enormous competitive advantage. So you need to know what human nature is and where is it going to go in a particular situation. So when things are bad, human nature is despair. Oh my god, it's bad. It's going to get worse. We're going to die. All of us are going to die. You know, we're not going to survive and all of that. That's human nature. So you need to go against human nature. You need to understand that it's normal. You know, most people say this is crazy. No, it is normal. This is how we are made up. So you now need to then say what is your recipe to address that to make sure you turn it around, right? And so I try to be a student of human nature in order to then say how do we do the opposite when circumstances are difficult, right?

Take more risk. Take more smart risks. You know, as much as I've taken significant smart risks in my life and they have panned out, when I go back and I examine a lot of circumstances in my life, I would have done better if I had taken smarter risks. And I'm talking about in business, right? So, and that means that or in life in general, it means that maybe you had a group of people, you were a young person, you were in a setting in which there was a debate going on as to whether you should do that deal or you should get that client or whatever and you didn't speak up. You should have spoken up. You know, whether there was an opportunity to take a responsibility and you didn't go forward and say, 'I'll take that responsibility. I'll do that. I'll fix that problem. I'll work over the weekend, all weekend to fix that problem.' You know, a lot of people shy away from that, right? So whether it was with your career in general in which there was a job opening somewhere in another country, in another region or in another industry or in another part of the company and you waited for people to give it to you. You didn't go forward to grab it and say I'll volunteer to do that, I want to apply for that, or whatever. Or whether it's an acquisition, and what happens is that risks get magnified in the short term, extremely magnified. When you're looking at risk in the context of a week or two or three or even a year, it gets hugely magnified. So therefore, you get scared. You don't master it. You want to stay away from it, you know. And all human beings are risk averse. So that's what you do. It's human nature. So what you need to do is to go against your human nature and say no I can master this risk. I can dominate it. I can make it work for me. I can make it my friend and it's going to come out. And of course from time to time the risk does materialize and it bites you but that's going to be a small number of times compared to that. So that's what I would tell a younger person of me starting 30, 40 years ago.

Thanks for having me.