Finding Career Alpha
"The best hedge against inflation is your own earning power. If you're the best teacher; if you're the best surgeon; if you're the best lawyer - whatever it may be (... ) I would tell you the best thing to do is invest in yourself."
Warren Buffett, 2009 Annual Meeting.
I bet it won't surprise you that I love this idea! But while I always love the wise words of Warren Buffett, the exhortation to invest in yourself is kind of "parenthood and apple pie" - inspiring, but not actionable - unless you know why, where and how to invest.
Particularly, it's not helpful unless you know how to invest in yourself in the context of this current job market with all of its imminent risks and potential upside. The quote is sort of like saying "invest in the market" - what part of the market? How? What if the market is hard to decipher? What does "invest in yourself" even mean?
Investment, of course, implies a hopeful "Return on Investment," which means you design an investment to add more value to yourself professionally in the long run. The idea is to find the specific ways you can invest in yourself that will bring you the most long-term career upside while also providing you the most risk protection should the markets change.
To take it one step further, at the really elite level of investing in financial markets, fund managers try to "create alpha" - which means that the return you get from your investment portfolio over time is over and above the benchmark of your peer group. From a career perspective, this means to find ways to invest in yourself so that you are on par with or ahead of your internal or external peer group, people who are presumably also investing in career growth at the same time as you are.
Investing unwisely, either financially or career-wise, can cost you big time. I've known people who've invested in expensive certificate programs only to find later that their industry has moved its attention elsewhere, or they've found that their certificate didn't help their job search the way they hoped it would. I've talked to folks who've paid $100K+ for grad school who found that they didn't like the new career it led to. I've watched some employees hyper-focus on skills needed by their current employer, only to find themselves restructured out of that employer and needing to reinvent themselves with a new skill profile.
On the other hand, if you stay on the sidelines and don't invest in yourself, you'll fall behind your peers internally and externally. Your career resilience in unsteady markets, as well as your ability to negotiate for the jobs you want at the pay you want, will get weaker over time.
And you can't leave it up to your employer, either. I've also seen many, many folks leave their re-skilling up to their bosses to manage/fund/control, resulting in major skill gaps when they started to look for roles elsewhere.
How to shape your investment plan
You have a lot of choices about where to spend your limited time and resources. So how do you decide where to start?
Create a long-term career investment plan. Sort of how people work backward from a potential retirement date to make a long-term financial plan, it pays to get a multi-year career game plan together. Consider drawing up a career roadmap that captures the future role(s) you want, and then plan out the skills, relationships, and experiences you'll need to invest in, in order to get there.
Think broadly about what types of skills will give you the most career resiliency. Personally, I wouldn't put all financial eggs in one basket, and the same thing holds true for career investments. In order to get ROI or potentially find alpha, you need to balance risk, which means you need a diversification strategy. I think it makes sense to consider and build a portfolio of a few different types of career investments, including those that are:
Trending: You can use something like Udemy's Learning Trends report - or find a trend report relevant to your industry/role - to suss out what skills seem like they're hot now and will continue to grow in value.
Sustainable: Recently, I've been thinking more and more about Green-Skilling (see LinkedIn's comprehensive analysis of it here) and how some aspect of sustainability will likely be baked into almost all jobs going forward. You may not think the "green economy" applies to you, yet, but it's coming, and it's worth understanding.
Vertical/Horizontal: You can think about whether you'd like to invest in Vertical Skills or Horizontal Skills, an idea from the wonderful Christopher Penn. Vertical Skills are the ones relevant to your particular industry, say digital marketing or logistics. Horizontal Skills, on the other hand, such as data visualization, leadership and project management, transfer from industry to industry, and - as Christopher points out - even more importantly, they're harder for AI to replace.
Soft Skills: As in the prior point, soft skills will be one investment that can't be replaced by robots (easily, anyway). An investment in learning how to have executive presence, hold better meetings, work with better productivity/prioritization, negotiate, gain buy-in, manage change, create innovation, embrace diversity - all of those are necessary both now and in whatever the future of work holds for us all.
Web 3.0: This is a topic that scares almost everyone I know, but it's also emerging as likely to affect many of our organizations. It's better to at least take a quick look at it now than have to scramble to keep up with it later. Here's a great video peek into the topics covered by Web 3.0, a video hosted by Fidelity that takes place "in" the metaverse. (I'm going to be writing soon about Web 3.0's exciting possibilities from a career perspective).
Entrepreneurship: If you’re at all inclined toward entrepreneurship, you could start to invest in a future, self-directed business. Perhaps you explore the idea through a side hustle, talk to people in your network who might become potential future business partners, or volunteer as a start-up mentor to be around a cadre of entrepreneurial thinkers.
Ok, so all that said, before I sign off I'll come quickly back to the topic of "finding alpha." Investing in yourself is one thing, but how can you invest in yourself to create a career advantage over and above your peer group's baseline, if that interests you?
Even going through this exercise of proactively looking at your existing skills and making an investment plan puts you in a top percentile, performance-wise. Beyond that, I'd be thinking about optimizing your career investment in emerging trends - "skating where the puck is going" in your industry - so that you're one of the first to be learning about emerging skills/trends/needs. Or, as investor/entrepreneur Naval Ravikant puts this idea, “find the part of the job with the steepest learning curve,” then learn it and scale it to your team.
Once you invest, people need to be able to see the proof. I'd make sure that you bake your career investments into your personal brand, both to reflect your evolving career value and to attract internal and external opportunity to yourself.
A hedge against inflation, with a potential for "career alpha," are only possible if you embrace the idea that you, and only you, own your career development. You have an existing portfolio of experiences, skills, values and opportunities that already represents value to your current and future employer.
In this market - or really, in any market - it's up to you what you do with that inherent career value, and how wisely you invest your time and resources to grow your most important asset: yourself.
I'd love to hear from you - what do you think is the most important investment people can make in themselves?