The United States provides a "unique cultural distinction" in providing an environment that encourages managed risk-taking and diversification of stakes, a longtime, high-level financier told the 15th Annual WorldBoston Consuls Reception last month.
Describing himself to the metro Boston diplomatic corps as a "professional risk-taker," Paul J. Selian, executive vice president and head of global credit finance with State Street, said during the keynote address that such advice extends to diplomacy as well. More so than the dozens of worldwide nations where he said he has learned valuable lessons while visiting and conducting business, the United States offers abundant bounce-back opportunity for second chances.
“One can fail very publicly, in sports, in the arts, in business, and if one assumes the appropriate level of contrition or chutzpah or whatever the particular situation or moment calls for, one can get another chance to try again,” he told the audience collected on the 31st floor Harborview Room of the Federal Reserve Bank of Boston on October 30th. “But in America, our attribute of writing off losses and getting on with things helps us to be competitive in the global financial markets – even if it requires us to take our lumps and raise fresh capital.”
An institutional investor and international banker for most of his career, Selian cited several crises, bubbles and crashes through which he, his employers, Wall Street and global markets have persevered and lived to tell.
Loss also plays a significant role in how he vets candidates, presenting an interview question that can surprises unbalance or discomfort the applicant. This question probes the flip side of triumph, and the answer typically is revealing as to the jobseeker’s character, work ethic and truthfulness.
“When I interview someone looking to join the firm, my favorite question to ask is: ‘Tell me about a time you lost money,’” he said, noting portfolio and risk managers and credit analysts inherently love recounting successes and profits. “My experience tells me that if one has trouble answering that particular question, they either aren’t being honest, or they were never really in the game. That game is called: Risk.”
Selian recalled a challenging personal situation he encountered during a speaking engagement to a crowd of U.S. Navy administrators and officers at the U.S. Naval War College in Newport, R.I. a few years ago. A civilian asked his opinion as to what makes the US so great, prompting him to realize he might offend many in attendance whose eyes were focused on him.
He nodded to and thanked the U.S. military for its devotion to service as key to the nation’s military might. And then he pivoted.
“The unique cultural distinction that I believe makes us a great and durable nation is that we are the land of second chances,” Selian said he told the audience.
Apart from his professional pursuits, Selian has devoted efforts during the past 10 years to helping guide three artificial intelligence technology startups.
The performances of those nascent businesses is testament to the risk appetite he encourages.
“Of those three ventures, the first failed, the second is limping along and the third is meeting with some nice success,” Selian said. “This is why we have portfolios – every deal is not a winner.”
Selian concluded that a culture of second chances could be useful in other global pursuits. Enhancing interpersonal and international relationships is a vital component of successful business, he said.
“Perhaps, just maybe, Wall Street can teach us something. My exhortation today is: let’s all be people and companies and countries of second chances,” Selian said. “Let’s extend the olive branch and give each other a second chance. It turns out it’s good diplomacy and it’s also good business.”
