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Some FISD members recently read Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries by Safi Bahcall. Bahcall holds a PhD in physics and helmed his own publicly traded biotech company for many years – naturally he brings a unique perspective to the topic of innovation at scale. Below is a summary of some of the book’s most important takeaways for FISD members, according to FISD Reads group leader Hope “Hope-rah” Wilkes.

There are two major categories of innovation. You can innovate a new product (“P-type innovation”) or innovate a new strategy (“S-type innovation”). Companies that rely on P-type innovations to grow churn and burn their own great ideas, needing to come up with newer, better ideas increasingly quickly. Companies that favor S-type innovations are better equipped to handle changes in the industry. If you need a trick to remember this, think of Polaroid, a P-type innovator that was left with warehouses full of new products when the photography industry abruptly changed.

Tired of superhero movies? Make sure you understand how franchises happen. At a certain size, by their very nature and structure, companies can disincentivize innovative projects in favor of guaranteed winners (“franchises”). A big swing that pays off might barely move the needle for the department or the company as a whole. But for the individual who fails in the attempt, the loonshot can be a career killer. It’s much safer for a career-minded employee to work on franchise projects. In such an environment, innovation will only grow if you specifically feed it.

Rethink incentives. Doctors have been known to perform C-sections when they’re not medically indicated in order to get paid more. Consider bringing in an expert to identify perverse incentives in your organization that hinder innovation. Giving employees autonomy in their work and visibility through partnerships, conference presentations, and the like is a more effective incentive to excel than money alone.

Celebrate results, not rank. Bahcall’s example organization, DARPA, thrives because employees are there for finite terms known from the outset. This frees them to put all of their energy into their projects rather than spending time politicking for their next promotion.

Don’t just hire intelligently. Assign people to projects intelligently. Your rock star, high-talent employee is a bad fit for a project that requires her particular skillset if that project is beneath her. She won’t grow from the project and gains little by devoting much time to it. You’d be better served putting a less talented (but still good) employee in the project instead whose time investment in the project is positively correlated with good, even innovative project outcomes. Likewise, it should be a no-brainer to keep an employee off of a project for which he lacks the requisite skills. Not finding good project skill fit anywhere among your employees? Training can help, plus training reinvigorates employees, providing them with new ideas they’ll be eager to try out.

Sorry, you’re not Steve Jobs. Leaders who succeed while getting their hands deep into many of the company’s products come along maybe a couple of times in a generation. Without the innate knack that Jobs had, you’re liable to make a bad choice when acting as judge and jury for new ideas. According to Bahcall, successful top-level leaders “mind the system, not the project.” Support innovation at a remove so you don’t inadvertently become a gatekeeper for it.

The will to innovate isn’t enough. Your organization has to genuinely be prepared to support risk-taking projects – and see the good in them, even if they have problems at first. Bahcall put it best when he wrote, “Leaders who order their employees to be more innovative without first investing in organizational fitness are like casual joggers who order their bodies to run a marathon. It won’t happen and the experience is likely to cause a great deal of pain.”

Some FISD members recently read Leap: How to Thrive in a World Where Everything Can Be Copied by Howard Yu. Yu holds a PhD from Harvard Business School. He serves as a LEGO professor of management and innovation at the International Institute for Management Development where he directs the university’s Advanced Management Program for executives. He’s provided training to top companies such as Maersk, Electrolux, Mars, and Daimler. Below is a summary of some of the book’s most important takeaways for FISD members, according to FISD Reads group leader Hope “Hope-rah” Wilkes.

The robot takeover is simultaneously bleak and exciting. Yu writes, “What begins as an act of human creativity by a world-class expert usually ends in machine automation.” The information age has enabled us to make expert knowledge transferrable to others – and copy-able by other people, or even by machines. While losing a job to a robot doesn’t sound great, having technology perform some jobs would free people up to work towards further innovation.

First is the worst, second is the best. Latecomers to the market can learn from those who came before, avoiding costly mistakes and potentially making large investments in disruptive technology that entrenched leaders are unwilling to make. It’s not nearly as important to be the first mover as it is to be the first one the get it right.

It’s not true that if nothing changes, nothing changes. Managers too often assume that the company’s current financial situation will persist indefinitely, thus making investment proposals that much likelier to lose out to the choice to do nothing. The world will change around you, it’s up to you to choose to keep up.

Keeping up (or even setting the pace) can require a great deal of courage. Most managers are incentivized based on quarterly performance, so they’re much happier making small investments in existing assets for a marginal, practically guaranteed return than making a big investment in new assets that could (or could not) yield a big return.

Leaps can change what a company is in addition to what it does. Yu cites P&G as a prime example of a company that made leaps that enabled it not only to survive, but to thrive. P&G went from a mom-and-pop soap producer to a huge soap-manufacturing conglomerate that added chemistry research creative marketing to its list of core competencies.

Bibliography

Yu, Howard. Leap: How to Thrive in a World Where Everything Can Be Copied. PublicAffairs, 2018.

Some FISD members recently read Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts by Annie Duke. Duke is a professional poker player who succeeds because she makes rational, coolheaded decisions at the card table. Below is a summary of some of the book’s most important takeaways for FISD members, according to FISD Reads group leader Hope “Hope-rah” Wilkes.

Change my mind: Pete Carroll’s decision to pass in the final moments of the 2015 Super Bowl was a good decision. Football fans know that the Patriots intercepted the pass and clinched the title. That doesn’t mean the Seahawks coach made a bad call based on the history of what happens in that same situation: the vast majority of the time, team either scores or lives to fight another day after an incomplete pass. Moral of the story: a sound, well-reasoned decision might turn out badly due to rotten luck.

Be lucky and good. Rigorously interrogate your wins. As noted above, correlation does not equal causation. Look deeper. Just as a bad outcome doesn’t necessarily mean a decision was bad, a good outcome doesn’t necessarily mean a decision was good. When something works, make sure you understand why.

Don’t freak out, but the world is chaotic and governed by randomness. Get comfortable with the fact that luck is an uncontrollable factor in the outcome of your decisions. Because of this, a decision’s outcome is not always a great indicator of the decision’s quality.

Chess is nothing like real life. In chess, all possible moves are visible to you, provided you’re able to visualize and anticipate them. In real life, cascading effects of your choices are initially hidden from you and luck can change everything. Well-reasoned decisions are of course ideal, but don’t be paralyzed by a desire to optimize – it’s simply not possible in all cases in the real world as it is with chess.

Saying “I don’t know” isn’t a moral failing. Acknowledging and understanding the uncertainty inherent in a given decision is far better than feigning certainty.

Avoid belief traps. For a variety of reasons, people have a hard time changing our beliefs when we learn new information. Worse, because it’s much easier to believe information than to vet it, we only occasionally vet information, if we have the time and are in the right mood to do it. Instead of instinctively believing information, work on instinctively trying to verify it.

Rethink “I’m confident.” In our vernacular, this is often treated as a binary, you’re either confident in the correctness of your answer or you’re not confident. For decision making purposes, we’d be better served by expressing confidence along a spectrum: “I’m 75% confident” paints a more useful picture than “I’m confident.”

Retrain your brain. It’s normal to get a charge out of being right. To keep yourself on track for making optimal decisions, it helps to retrain yourself to get the same feeling of satisfaction from rigorously interrogating your decisions and how they relate to eventual outcomes. Change your routine from celebrating the outcome to studying how you could’ve optimized your decision and make the act of examining the decision the thing that makes you feel like a winner.

Then retrain your colleagues’ brains. Duke suggests that redefining success at your company as “providing the most accurate, objective, and detailed evaluation of what’s going on [will encourage] employees…[to] compete to win on those terms.”

Diversity matters. Including people with opposing views in your decision-assessing group improves the accuracy and quality of your decisions and helps limit the tendency to take ideologies to the extreme.

Hindsight isn’t always 20/20. People tend to think more rationally about the future than the past. Duke points out, “it’s harder to get defensive about something that hasn’t happened yet.”

Bibliography: Duke, Annie. Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts. Portfolio/Penguin, 2019. Duke, Annie. Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts. Portfolio/Penguin, 2019.

Some FISD members recently read Powerful: Building a Culture of Freedom and Responsibility by Patty McCord. Prior to writing the book, McCord served as Chief Talent Officer at Netflix where she was co-creator of the famed Netflix Culture Deck. Below are some of the book’s most important takeaways, according to FISD Reads group leader Hope “Hope-rah” Wilkes.

You’ve hired excellent people, right? Treat them like they’re excellent. Well-intended adults don’t benefit from restrictive vacation and expense policies. Secrecy and lies for the sake of protecting feelings won’t make anyone any less curious or any more likely to trust you.

Forget the idea of “empowerment.” People come to work for you with their own inherent power. Do not strip them of it only dole a fraction of it back out via so-called empowerment exercises in the name of command and control. Unencumbered by rules and restrictions, employees will do their best work.

Your opinion doesn’t matter…if it’s not fact-based. Foster an environment in which employees can argue openly provided they stay professional and can back up their assertions with facts. Data is not facts. While hard data may support facts, context and qualitative insight are vital.

Your company exists to serve its customers, not its employees. It’s wonderful for employees to be happy, but companies don’t exist to make employees happy. The ideal happy employee finds fulfillment in delighting the customer, working alongside talented colleagues, and serving a great mission. A ping pong table and a craft beer bar will not make your office a great place to work.

Compensation is a poor target for cost savings. Companies with the good fortune to be able to hire top talent and pay top-of-market salaries should do so. It will pay dividends that more than make up for any savings from paying employees less. When setting compensation, consider the cost to the company were that prospective hire to work for a competitor, the accomplishments that would go unachieved without that person, the candidate’s intangibles, and how that person could carry the company into the future. Bear in mind that published salary data is old and not remotely specific enough for the job you’re seeking to fill. If you’re hiring the right person, a bonus won’t affect their work ethic or output. When setting a raise figure, don’t discount the value of specialized (and often desirable) skills gained by the employee while working for you.

Always be…evaluating. Cross-departmental feedback provides more meaningful information than manager reviews, especially if the reviews require time-consuming paperwork and/or a complex algorithm. Adopt the mindset of a sports coach. Is your team the best possible group of individuals to accomplish your current goals? What about your future goals? Edit your team as needs change.

Turnover isn’t always a bad thing. Even if the employee is a great worker, talented, and a well-liked team member, it might be time to say goodbye if the company needs people with different skills to fulfill its mission. When letting someone go, avoid the line of thinking that “Employee X is bad.” Employee X was likely just a bad fit for what you needed. Remember that you offered the job to Employee X and Employee X accepted because both of you thought the relationship would go well. Make your company a great place to have worked, and exits won’t be too painful.

HR people should be business people. HR and recruiters ultimately serve the company’s customers. Everyone involved in hiring for your company must have a deep understanding of your business. This includes maintaining a pipeline of potential candidates whose skills are aligned with the company’s vision for the future. All interviewees should leave your office wanting the job, even if you know you don’t want to hire them.

Bibliography

McCord, P. (2017). Powerful: Building a Culture of Freedom and Responsibility. S. l.: Silicon Guild.

If you’ve read the recent FISD Newsletter (and if not, why not?) you will have noticed that I’m one of the first people to have passed the FISD Level 2 certification on Data Licensing. I’ve been asked by the lovely people at FISD to write a guest blog post from the perspective of someone who has been there and lived to tell the story…

In case you are not aware, the Data Licensing Specialist exam (DLS) is a comprehensive, industry-wide exam designed to test in the broadest sense every facet of data licensing across the industry. I mention this because it is incredibly important that anyone planning to sit the exam understand that it is “industry-wide”. I am aware of people with decades in the industry who failed it first time because their experience wasn’t as wide as they felt it was. It’s very important that anyone looking to sit the exam fully understand and appreciate that if you haven’t worked both sell-side and buy-side; had to deal with exchanges, indices, fixings & benchmarks, ratings, platform providers; had exposure to data governance scenarios end-to-end, licensing models, “what if” scenario analysis on data flows across the enterprise etc. well then you might not pass. The exam has a very high pass mark and the questions are tough for a reason; this exam is an “expert” level exam, you need to have “walked the walk” to pass it.

I don’t mention this to put people off, just to prepare those who are reading about the course and thinking “I’d like to sit that”. The flip side of this is that the exam has real credibility and you can be sure that anyone who has passed it knows their stuff. I find it interesting to note that the first two people to pass the exam (Michael McCrea and myself) both come from different sides of the fence: Michael sat across from me a number of times during market data audits whilst he was at TMX, so it should be of comfort to those of you on the data provider side that this exam is for you as much as it is for those on the data consumer side (which is my background).

In addition to sitting the exam early on, I was also one of the first to test the online proctoring system. I didn’t want to go to a test center; the dates and times were not conducive to my schedule during a particularly busy period, so I sat the exam at home on a weekend morning in November whilst still in my PJs and before the family created a huge amount of noise and disturbance. (I’m telling you this for reasons that will soon become obvious.) So, what is the online proctored version of the FISD exams? (You can do both FISD FIA and DLS this way with special permission.) Well, first thing to note is that there are some preconditions to the online version. You have to have a webcam and microphone on the computer you are taking the exam on. You have to have the ability to install software on the computer you are going to be using (PC and Mac are both covered). And the room you are taking the exam in has to be quiet…exam conditions are enforced. Before you can sit the exam, you have to install the software that the proctoring system requires. I’ll be honest, it is a form of spyware which takes over your webcam, maximizes the gain of the microphone, takes facial, voice, and typing biometrics – for the latter you have to type something repeatedly so it can fingerprint your typing and ensure you aren’t handing the keyboard to someone else. You need to ensure you are not wearing an Apple Watch or similar smart device as this will get spotted and you’ll be in trouble. You cannot have any notes. You cannot speak aloud.

How do I know all this? Whilst sitting the exam, a couple of times the screen flashed up a red warning bar and switched to a view of my face showing me looking off to the side with a message telling me to look at the screen and not around the room. Another time, I read a particularly long question aloud to verbalize my thinking, and the exam was halted and I was told to stop reading the question aloud as other candidates do not have the same questions as I did. This was the point I got suspicious that this wasn’t an AI tracking me. Lastly, when rubbing my face and being told to remove my smart watch, I realized that the biometrics taken by the webcam were not the only reason it was on – there was someone at the other end of the webcam watching me take the test, listen to me mutter and (more importantly) watching me sit there in my PJs. As with all exams, I would caution any candidate to do the same thing: read the question thoroughly; mark the ones you want to review at the end and revisit them; and make sure you keep an eye on the clock as you have plenty of time to take the exam but if you run out of time, that is it.

So, how can you prepare yourself to sit the exam? Well, if you aren’t going on a FISD recognized prep course, ensure you download the syllabus from the FISD certification page from and read it cover-to-cover. Then perform a brutally honest self-appraisal of where your knowledge gaps lie to allow you to study those aspects; I’d strongly advice printing it off and highlighting everything you couldn’t honestly talk about in full to a business sponsor or client about in your sleep. When you’ve done that, decide whether you are comfortable reading up on the subjects you suspect need work, or keep an eye out for one of the preparation courses which are now being advertised. Best of luck and I hope to see many more people with “DLS” after their name on LinkedIn in the coming months.

John Ikel, DLS is a veteran of some 16 years in Market Data, with the majority of that time as an industry recognized subject matter expert for market data compliance & audit.  John was the first person to be awarded the FISD Data Licensing Specialist (DLS) accreditation, which is a specialist qualification from FISD that focuses on the licensing and related compliance aspects of financial markets information usage at all levels from original source to ultimate consumer, including derived data. Prior to 3di John was Global Head of Market Data Compliance & Audit for BNP Paribas.  During his 7 years with the bank he was globally responsible for market data compliance across the firm; managing market data usage by internal systems and end-users across the bank; and managing of both internal and third-party external market data audits from initiation to settlement.  He advised internal clients on the data usage rules affecting operational processes and contract negotiations, and mentored / trained the internal market data teams on the same.  He was additionally responsible for 2 years for the global commercial market data relationship with the Exchanges, five inter-dealer brokers (BGC Partners, ICAP, TradeWeb, Tradition, and Tullett Prebon), and fixings & bank rate providers; this covered not just global markets but also retail banking too.  Before BNP Paribas, John worked in a similar, lower-level capacity at Commerzbank and Credit Suisse; and is personally accountable for actual P&L impacting savings of over €10m in the past 10 years of market data audits with much more avoided through market data compliance risk avoidance.

One of the most common questions I get from candidates for the FISD FIA is, “what study materials are available?” In order to keep the exam fair and true to its purpose, FISD has walled itself from training. We want qualified FIAs to have learned the syllabus material well enough to apply it, not just to memorize test answers. So, we rely on third-party trainers to help candidates acquire and reinforce the knowledge they need to succeed on the exam and in their jobs.

While this has proved a good solution for many test takers, not everyone has the budget for formal training or the need. Some of you come to the FISD FIA with decades of industry experience and want only a little review before diving into the exam, not structured training. Until now, FISD has been empty-handed in the face of requests for study material that’s short of a full course but still imparts important information.

No longer!

Enter the 416-slide digital flashcard deck created by a dedicated FISD member. Accessible on your desktop or mobile device, this resource covers critical FISD FIA syllabus material and is completely free to use, no account required. Think of the syllabus as a road map for your FIA journey. The flashcards are your tour guide — they provide explanations and definitions for the terms in the syllabus. They’ll help you in your preparations if you’re going it alone and they’re a great supplement to a formal training course.

Questions? Have your own study materials to share? Send me a note at hwilkes@siia.net.

Maybe it’s been a few years since you last took a test. Maybe a lot is riding on your result. Whatever the reason, you’re nervous to attempt the FISD FIA. Before you reschedule for a later date, check out these facts about the exam.

1. Over 77% of test takers have passed the FISD FIA on the first attempt. If you’ve studied the syllabus material diligently, you have every reason to expect you’ll pass the exam.
2. Your score will never be published. You might want to brag about your result, but FISD will never disclose your scores to anyone other than you.
3. Retakes are available. Retakes of the FISD FIA are available for $150 with no waiting period. If you something goes awry, you can always try again.
4. You’re not alone. Nearly 1,100 market data professionals have passed the FISD FIA. You can be sure that some of them were even more apprehensive than you are about sitting for a certification exam. Kicking the can down the road didn’t help any of them — bravely attempting the exam is what earned them the credential.

Review your notes and find a nice spot to hang your FISD FIA plaque — you’ve got this!

In addition to being the first credential specific to the market and reference data industry, the FISD FIA was the first exam created by FISD. We made the exam to meet the financial information industry’s need for a standardized, recognized baseline of knowledge for practitioners and their colleagues. Think about your own experience and educational background — did you know from the start that you’d wind up in the position you’re in today? What about your colleagues? While we don’t have the power to remake the education system so tomorrow’s students can prepare for a market/reference data career path before graduation or the power to save you from those sometimes strange first, second, or even third jobs you endured before you found your calling in the financial information industry, we do have the power to make sure you have the expertise to succeed now that you’re here. That’s where the FISD FIA comes in.

If you haven’t yet reviewed the FISD FIA syllabus, you should check that out after you’re done reading this. It’s broad. It’s thorough. It speaks for itself. The star of this post is another major strength of the FISD FIA: the certification’s growing recognition within the industry.

As of press time, 1,095 people have passed the FISD FIA. Given how totally ordinary it is for a market data team to consist of only a handful of people, this is pretty serious uptake, and it’s only continuing to grow.

This chart shows the number of FISD FIAs from the program’s inception in 2010 through 2016. FISD invested its time and energy to make something good for the industry we serve, and the industry has embraced it.

You can help make the FISD FIA an even more valuable credential by spreading awareness of the program in a number of ways:

• Preferring FISD FIA qualified candidates for job openings at your company
• Using the post-nomial “FIA” once you earn the credential
• Encouraging your team to take the exam and helping them get reimbursed by your company for the exam fee (or for the truly bold who can set a budget: buying a set of exam vouchers for your colleagues)
• Proudly displaying your FISD FIA plaque in your office or cubicle
• Telling your clients and/or customers about the FISD FIA and how sharing a bedrock of knowledge will streamline your communications
• Sharing your exam experience on social media — you might not compete well on Facebook against some cute baby pictures, but your LinkedIn and Twitter followers are probably interested in your professional development