On the Importance of Thick Skin and Risk-Taking

the_good_doctorWhy did a bunch of medical types get an investment guy to lead a book club? This question, or something similar, must have been on Michael Hankin’s mind when David Hellmann asked if he’d be interested in heading the discussion for our CIM Committee. His second thought might well have been, why this particular book? But he said yes.

Start-Up Nation: The Story of Israel’s Economic Miracle, by Dan Senor and Saul Singer, examines why a tiny nation – Israel has just over 7 million people, few natural resources, and it’s surrounded by countries that actively hate it – generates more start-up companies than Japan, India, Korea, Canada, and the United Kingdom. As Hankin and two Brown Advisory colleagues began reading it, they realized that their firm shared many of the qualities that were highlighted in the book. “Brown Advisory started inside an investment bank (Alex Brown & Sons Bankers Trust) in 1993, went private in 1998, and has grown from a very small firm to a much larger one, growing at roughly 20 percent per year for 20 years now,” says Hankin, the firm’s President and CEO. What Brown Advisory and Israel’s successful entrepreneurs have in common, Hankin realized, are qualities like “a willingness to embrace people challenging your view, a can-do attitude, and never being satisfied with the status quo.”

Survival instincts. “When you’re starting out, there is a certain amount of, ‘if you don’t succeed, you will not survive,’” says Hankin. “That feeling, I think, is a big part of why some people do succeed. They know there’s no other choice.” But as companies grow, they tend to take fewer risks: “People just become more conservative as they move up the success curve away from this start-up mentality. It seems that having those survival instructs is a big part of getting things going.”

Willingness to fail. Even if you fail a lot, “you just have to hang in there and keep trying.” Years ago Hankin, a lawyer, worked with Howard Head, inventor of the oversized tennis racket and modern ski. Shortly before he died, Head was planning a children’s museum exhibit “that was all about trial and error, how many times you will fail before you succeed, and how that was just part of building something successful. That was motivational to me.”

Feedback. Honest answers are good, Hankin says. They help make you stronger, just as a sword is tempered by heat. “You have to have a thick skin. You have to believe that being challenged will ultimately lead to better decisions and better outcomes.”

“I make such better decisions when I’m willing to accept people asking me questions and challenging me.”

The conversation was dynamic, says Hankin. “Clearly the people in the room enjoyed it, and it was clear that they had open minds about discussing a book that had nothing to do with Hopkins, that it was worth doing. I think most people walked out thinking about the importance of creating and supporting and protecting an environment where people can take risks. I was fascinated by it. I make such better decisions when I’m willing to accept people asking me questions and challenging me. I’m a big believer in an environment that allows that to happen.”