Nell Minow
Corporate Governance expert, 'Movie Mom'

Nell Minow

Editor of The Corporate Library, and 'Movie Mom' for and radio stations across the country.


Adversity's advantage

Q: It's official: A new study concludes that experiencing a few "adverse life events," such as a natural disaster or losing a job, really does make you stronger in the long run. People who sail through and those who face more frequent adversity usually don't fare as well. The researcher says ''people are more resilient than we think." Are setbacks actually a key to success? Have you ever faced major adversity that you weren't able to overcome?

"The Big Short" by Michael Lewis is the best book about the financial meltdown and one of the best books of the year in any category. Like his book "The New New Thing," written at the height of the boom, he focuses on a very small group of people to illustrate some very big themes and illuminate some very big events.

But in "The New New Thing," he found someone who "rhymed with the environment" and exemplified the way the people at the center of the activity were thinking. In "The Big Short," he found four people who clashed with their time. Seeing through the eyes of four people who saw the meltdown coming was the best possible way to understand what went wrong.

Lewis does not make the point explicitly, but it is impossible to miss the fact that the one thing his group had in common was an unusual level of adversity.

The first two had both experienced shocking tragedy. I believe it was in part that experience that made it possible for them to see what almost everyone else -- regulators, journalists, economists, politicians, and the market -- missed.

This is more than the usual "that which does not defeat me makes me stronger" idea, though I believe that knowing you can survive serious setbacks can bolster confidence and courage. I think it is more significant than that.

People who have had to confront terrible loss are more skeptical about conventional wisdom. And they have a much better sense of priorities. They are less susceptible to the "emperor's new clothes" syndrome of being afraid to appear ignorant or out of the loop. They are immune from the middle-school fear of being different and they do not worry about being accepted by the in-crowd.

I believe that kind of intellectual fearlessness is more important than being smart. After all, consider the sky-high IQs of the guys who created and sold sub-prime and derivatives, the people who bet literal billions of dollars that the housing market would always go up and would always go up at the unprecedentedly accelerated rate of the previous decade, the people who actually thought that you could dilute the toxicity of bad loans by bundling a lot of them together, the people who actually claimed to have taken risk out of investing.

As Charlie Munger of Berkshire Hathaway said about the people behind the financial crisis, "Very high IQ people can be completely useless. And many of them are." Really smart people use adversity to get smarter.

By Nell Minow  |  November 15, 2010; 12:00 AM ET  | Category:  Success and adversity , a bump in the road Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati  
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