Ken Griffin, Citadel's blue-eyed boss, and his talent machine
Ken Griffin, CEO of Citadel, can be daunting. The Wall Street Journal says employees at the firm are sometimes discomforted by his "intense," "blue-eyed" stare. There's little sign of this in Citadel's recent video of Ken talking to a group of open-mouthed adoring interns, but maybe they haven't experienced the stare, yet.
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Both the Wall Street Journal's interview with Griffin and a recent interview with the Citadel boss by Norges Investment Bank highlight Griffin's personableness and competitiveness. He's friendly. He's about teamwork. He likes philosophy. But he wants to win badly, and he wants to hire people who want to win too. If you're smart but lazy, you won't succeed.
“We hire people who are winners in life,” Griffin told the WSJ. “Winning in finance is often not enough.” As we've noted before, Citadel's hires include published authors, chess champions and winners of Olympiad competitions. Speaking to this year's interns, Griffin declared that, "To be successful, you have to be a lifetime winner. You’re not done with your education when you graduate. You are just at the start of the journey.”
Citadel and Citadel Securities (the hedge fund and the marketing making business) hired a combined 300 interns this year and received a total of 85,000 applications for those roles. The firms make no bones about the extreme competitiveness for places: only the excellent get hired. Griffin said last year that he's interviewed 10,000 people during his career. He told Norges Investment Bank that he looks for "ambition," "communication skills", and "an ability to reason and to rationalize across a broad array of problems." This can't be deduced from a CV, said Griffin: you have to actually meet people.
Griffin's empire of talent is based upon more than just his own interviewing technique, though. As he noted in the Norges interview, Citadel's success was built on hiring excellent mathematicians and computer programmers at a time when most financial services firms were still after a strong handshake and a degree in economics. It's been necessary to 'create talent,' said Griffin.
Today, that talent creation includes the junior hiring programs and selective external recruitment. When Citadel hires externally, it puts key hires through a five-hour psychological screening program called ghSMART which can cost $25k+ per person and involves questions about early influences (including high-school and college extracurriculars, accomplishments, failures), life experiences and questions about every single job you've done - including why you left. Here, what you don't say is as important as what you do.
Once Citadel hires someone, Griffin says it wants to keep them. Unlike rival funds, Citadel isn't known for strict stop loss policy. If Citadel portfolio managers are loss making, there can be dialogue. "We'd like to give you a lot more than $100m to manage," Griffin told Norges Bank. "We're bringing really great people here, we want them to have access to sufficient capital to have both the revenues and the profitability to support superior teams."
When someone doesn't work out, Griffin said it's often because they can't construct a good portfolio. - "You can put the facts right in front of their face, you can have a portfolio that's extraordinarily high concentrated in large positions, but you cannot demonstrate a clear and concise competitive advantage in why you own those positions...we don't have a basis to work together."
And yet, you don't have to succeed all the time. Griffin acknowledged that "losses and pain" convert into "wisdom" and that Citadel's senior team have learned some "very bitter lessons". "I've made every mistake you can possibly make, and unfortunately I've made some of them two or three times," he acknowledged.
If you succeed at Citadel -and if you can escape its liberal non-compete clauses - you will be feted by other hedge funds, which Griffin said have been paying "truly irrational" amounts of money to poach Citadel's people.
You will, however, be expected to work in the office five days a week, every week. Griffin attributed the firm's success in the pandemic to its ability to out-compete people in their "pyjamas." Being in the office is good for developing leaders, he said. It's good for differentiating between private and professional life, and it's good for mental health.
When he's not in the office, Griffin said his three children consume all his free time.
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