Over the past month, I’ve coached a number of clients and have presented to an even larger number of out-of-work executives. They have all been out of work now for 6-12 months and have little-or-no direction moving forward. When I keynote my workshop or coach them one-on-one:

1. I help them target exact companies that they want to work for.
2. I show them a strategy how to reach out and touch decision-makers.
3. I follow up with them on how they are progressing.
4. WASH – RINSE – REPEAT. It’s that easy.

And guess what? Many of my clients immediately get interviews and some get offers (like this morning!).

But there is another group of clients. They’ve done NOTHING. No phone calls, no meetings, no real opportunities.

All they do all day is send out a few emails, check the job boards, tighten up their resume. That’s it.

Here’s a dose of REALITY folks: If I haven’t said it enough — YOU NEED TO GET OUT AND MEET PEOPLE.

• If you are searching for a job in your sweats, YOU ARE NOT LOOKING FOR A JOB.
• If you are not getting out DAILY and meeting key movers and shakers, YOU ARE NOT LOOKING FOR A JOB.
• If you spend your day surfing on the web, sending emails to a few friends, and watching TV all day, YOU ARE NOT LOOKING FOR A JOB.
• If you are landscaping your yard, shopping for groceries, driving the kids to and from school, YOU ARE NOT LOOKING FOR A JOB.

YOU ARE AVOIDING GETTING A JOB.

I honestly think that many of these people have worked so long in one company or one vocation, they’ve “COCOONED” themselves into a mental corner that they are unable to get out of. Even when they are given a map and shown the way out — they still stay in the corner waiting for someone to come along and give them a job.

Here’s the TRUE REALITY: That’s never gonna happen folks.

Get ‘real’ with your situation. If you’ve been unemployed for more than 3 months without a viable interview or job offer, something isn’t working. You need to change your strategy. Unfortunately, for many people out their, many of their obstacles are in their head.

Sorry about the vitriol today — but sometimes people just need a good kick in the butt to see reality.

Image provided by Family O’Abé at Flickr.

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A big thank you again for attending — I had so much fun!

And from the attendance statistics and questions, I feel everyone found it powerful! 94% of attendees remained on the line for the entire webinar — unbelievable! And many questions from the audience — thank you!

As promised, here is the presentation and article:

Get Tough! Presentation

The Best Jobs Are Never Advertised Article

Interested In The Get Tough! Masterclass? Learn more . . .

It’s hard today to find that job. You don’t know where to turn, who to trust, and what to do. You move in multiple directions, trying valiantly to advance and accelerate your search to get that successful interview. But it just doesn’t happen.

Wouldn’t it be better to have a:

• ROCK-SOLID PLAN? One where you know what to do and when? Something to look forward to? Where you can take charge of your search and not let it control you?
• WORLD-CLASS COACH? One who knows this stuff cold and can energize you? Someone who has the background and experience to get you focused and take action?
• COMMUNITY OF COLLEAGUES? Who are experiencing exactly what you’re going through and can help you move forward?
• A WORLD-CLASS RESOURCE? Articles and videos to help you break out of the old corporate mold?

Just $29.95 . . .

Please Share With Your Friends, Colleagues, Families, and Neighbors!

Thank you – Rich 

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“I get up — I check out the job market — I send out a few resumes — and I never get a call back!” “What should I do?”

TAKE CHARGE OF YOUR LIFE.

It’s easier said than done. But the reality is, there are more workers than jobs out there right now. And the premium jobs (management) are disappearing at a rapid pace due to productivity gains, technology, and the current economy. Check out this article.

BUT WHAT CAN I DO?

One option is to start your own business. It’s never been easier in the history of people working. To start your own business, you need to clearly understand a number of areas:

• Knowledge of the Marketplace - is this needed?, is there a market for this?, are people willing to pay you for it?
• Drive & Hustle – a ‘get off your ass’ attitude to make it happen AND a drive to help you through the hard and complex times.
• A Vision - what is the future of this business?, where is it going?, who is your competition?
• A Mission - what are you going to do . . . exactly?
• A Plan - what are the steps, the timing, the resources, – the who, what, where, when, why and how?

Now you might say — “Start a business? How will I make money?”
Let me give you an example:

There’s a small shop in Kentucky called Gil Hibben Knives. You might have heard about them. Gil makes knives. Really good knives.

In addition to manufacturing his own knives, he runs classes where he teaches people to make their own knives:

• It’s only offered once a month.
• The class runs for one week, each day from 9 AM to 5:30 PM.
• He only allows four people in each class. (he can probably run the class by himself)
• The classes are held at his shop in LaGrange, KY. (hotel, travel, food, etc. are your responsibility)
• He charges $995 for each participant.

The classes are FULL for the rest of the year.

Let’s do a little broad math here: $1000 X 4 Students X 12 = $48,000/year.

And that’s only working one week per month! This model allows him to work on manufacturing and other projects the other three weeks of the month! And let’s be honest here — his site is pretty basic — it does the job, but anyone can do the same thing to market their services and wares. What I’m really saying is that it’s pretty easy — don’t let your mind develop obstacles.

And let me hazard a guess . . . he probably LOVES what he does.

So if the corporation work environment is slowly collapsing/changing — maybe you should strike out on your own and start that business?

It will be hard — it will tax you — but in the end, it will be well worth it.

P.S. I know there will be commenters who will say, “He’s a famous knifemaker!” or “He’s had his business for years!” or “Blah, blah, blah, blah, blah”. You may be right, but from my viewpoint, they’re just more obstacles you’re putting in your way — moving you from success to mediocrity and failure. Get out there and do something!

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A whole article about job hunting rules from ME (click image or here to enlarge).

Bottom line:

• Take stock of all social media sites where you have been posting information.
• Step back and view each site with a laser focus — is there anything unprofessional?
• They are looking — especially LinkedIn, Facebook, Google+, and Twitter.
• Use these sites to enhance your professional image and stature in the industry. 

A big shout-out to Bob — he’s in a rarefied class all by himself – professional, understanding, and informs readers with solid and clear advice.

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Yesterday while reading TechCrunch, I ran across one of these articles by James Altucher.

In 10 very simple, scary, and true reasons, James lays out why you HAVE to quit your job. Basically,  The myth of corporate safety is over and here is how it currently lays out:

1. The middle class is dead. You know it and everyone else does – time to make your next move.
2. You’ve been replaced. Technology & robots are the new middle class.
3. Corporations don’t like you. They never have and are getting worse by the day.
4. Money is not happiness. Looking for that promotion or bonus? That won’t make you happy.
5. Count right now how many people can make a major decision that can ruin your life. They can fire you in an instant.
6. Is your job satisfying your needs? It’s Monday – are you really happy to hit your job (I am).
7. Your retirement plan is for shit. We’re living longer and no amount of savings is going to last.
8. Excuses. Stop making excuses to leave the rat race. Do it today.
9. It’s okay to take baby steps. Move slowly and take small steps toward your goals.
10. Abundance will never come from your job. You have to build it within you.

To read the entire article (and I advise you to), click here.

It’s a wake-up call for your career. I came to this conclusion 12 years ago and made my move — I’ve never been happier.

Also, please visit James’ site – he is writing and doing great things.

Image provided by Joopey at Flickr.

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I’m talking about the slow drip-drip-drip death as you watch your career eke away and there’s nothing you can really do about it.

I run into this all the time. I have clients who own their own businesses and suddenly realize for the past 4-5 years their revenue and profits have been going down-down-down.

Or the executive who lives in a corporate hole their in working for an asshole, in a department of do-nothings, for a company who hates their employees (and loves the almighty dollar — but it doesn’t go to the employees).

Sound familiar? 

People’s careers are dying all around us. It’s due to a number of factors:

1. GLOBAL – The world is changing faster & faster. Institutions we thought were going to last forever are either no longer there or are on their way to disappearing. Publishing, media, technology, transportation, education, advertising, manufacturing, and medical just to name a few.

2. COMPANY – Focus on short-term profits vs. producing quality products. Top management has one focus — how to please Wall Street. They gear ALL of their decisions on hitting their targets and they quickly forget the product, the customer, and their employees in the process.

3. PERSONAL – People have lost their enthusiasm, drive and energy for what they are doing. They’ve been doing it so long it becomes a chore or they realize they have changed and are interested in more important things.

How do I diagnose and treat this situation? I ask a simple, three-part question — Do you want to:

1. Stay and do nothing? (not a good idea)
2. Stay and change the dynamic to make it better?
3. Leave and/or do something else?

When your decision point drops down to this simple diagnosis — it instantly clarifies your situation and it sometimes scares people.

Most clients instantly recognize they’ve been doing #1 for many years. They’ve been sticking their heads in the sand and hiding in their cubicles waiting for something to change. Some knight in shining armor to whisk them off and save them. But it never does.

The truth is: YOU are the only one who can help YOU. You are in charge of your career and you need to stop waiting for things to happen to you and start directing your life (and explore your limits).

Step One: Get off your ass and stop living in #1. Start doing SOMETHING.

Step Two: Change the dynamic where you are. Start meeting new people, understand where the hot areas of where you work really are, and move towards that light.

Step Three: Get out and start meeting new people outside of your sphere. Open yourself up to new ideas and new ways of doing things. Start pushing yourself way out of your comfort zone.

By the way, I cover all of this in my award-winning workshop, “Bulletproof Your Career”. Early next year, I will also be launching my personalized coaching program specifically geared towards bulletproofing your career. Stay tuned!

Image provided by Cindy Funk at Flickr.

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“If you alway put limits on everything you do, physical or anything else — it will spread into work and into your life. There are no limits — there are only plateaus and you must not stay there — you must go beyond them.”

What is Bruce really saying when it comes to your career or business?

Everything in your life is a plateau on an endless mountain. You work hard — you move up — and make it to the next plateau. You get settled — you enjoy that plateau — and then you make plans to move from that plateau to the next plateau on the mountain.

And I promise you — if you stay at that plateau for a long time — one of three realities will occur:

1. You WILL get bored of that plateau and start self-sabotaging behaviors.

I see this happen all of the time. We get comfortable and we get to know our responsibilities, our deliverables, our customers. Unfortunately, a career without challenges tends to become predictable and boring. And when things in our life become predictable and boring — we tend to take them for granted.

We start to let some areas grow fallow — we start to procrastinate on delivering — just a bit at first, but then it becomes endemic. We might start coming in later to work or leave earlier. We might not get back to our best customer as quickly as we used to. We spend a little too much time surfing or sleeping on the job — and everyone begins to notice.

Solution: When you start to get bored — the very millisecond you get bored — start looking for the new plateau to move to and START CLIMBING.

2. Someone WILL kick you off that plateau.

In my Welcome Packet I send to new clients, I have a powerful quote on the front cover: “If you aren’t continually reinventing yourself, your company, or your brand, it’s only a matter of time before you become obsolete, irrelevant, and go out of business.” And that’s 100% true.

Someone or some company is going to come along and shake your apple tree. You might see the apples fly all over the place and say to yourself, “I have a strong stem — nothing will happen to me.”

But you’re wrong. Think of what’s happening right now in the marketplace — what has happened to the publishing, newspaper, media, advertising, music, auto, banking industries (just to name a few)? If things aren’t falling all around you — you might be falling off the number one spot to number two (or three). Or your vocation is changing and YOU need to chart out a new direction for your business to sail towards.

Solution: Keep your peripherals moving at all times — keep looking around and see if anyone (or any company/industry) is going to begin to take over your plateau. Don’t get comfortable, get moving.

3. Your plateau WILL disappear and you will fall.

We frequently make the wrong assumption and think, “This is a great job/company, I am challenged every day, and nothing will really change (at least for the time being).”

You’re WRONG. 40-50 years ago, you might be right — my father had his position at Electrolux until the day he retired. But stop kidding yourself — those jobs are GONE.

In fact, each year, the market is moving faster and faster. Industries that were booming just a decade ago are now gone.  I’m always in awe when I visit my local cable company (usually to trade in my broken DVR player) and see just 10-15 years ago all the awards on the walls, the photos of all the accomplishments, the parties, the fun that filled all the offices and people there.

Now there are two VERY bored people on the other side of the glass partition who collect cable payments and exchange DVR players. That’s it. Everyone else is GONE.

Solution: Sometimes plateaus disappear instantly, but most of the time, it take awhile for them to totally evaporate. So you have time — not a lot of time — but just enough to find that next handhold and start climbing up.

So the only logical decision to be made is to start climbing up. Because you don’t want to start climbing down.

There’s no time like the present — START CLIMBING.

P.S. By the way, this also applies to your life too. Your marriage. Your friends. Keep it fresh! Keep it growing!

Image provided by Mark Doliner at Flickr.

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Here’s a little secret about Rich Gee — I am an avid Vince Flynn Fan — I read all of his books. I am currently in the middle of one of his older novels, Act of Treason. Not to get into the story, but there’s a great description of people who are habitually late for meetings. I’ll quote it in it’s entirety (it’s so good):

“When someone is constantly late, they fall into three categories.”

“The first, he called idiot savant. The type of person who is so smart in his or her field of expertise that their mid is literally elsewhere. In layman’s terms he explained that these people were smart in school and dumb on the bus.”

“The second category was made up of perfectionists, people who were incapable of letting go of one task and moving on to another. These people were always playing catch-up, rarely rose to any real position of power, and needed to be managed properly.”

“The third category, and the one to be most wary of were the egomaniacs. These were the people who not only felt that their time was more important than anyone else’s, but who needed to prove it by constantly making others wait for them.”

WOW. The only thing I would add to this description — one can share elements of each category. So you can be a perfectionist with a little idiot savant. Or a bit of an egomaniac (be honest, we all are at one time or another) with a dash of  perfectionism.

Or all three. Coming from someone who is maniacally early all the time — it’s hard for me to understand habitually late people. Now I do.

Is there a diagnosis for people like me who are always early? Where do you place yourself? I’d love to know — comment below.

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Have you ever sold products? Stood in front of a board of directors and pitched an idea? I have.

In sales, there are two types of salespeople — salespeople whose goal is to sell some ‘stuff’ and salespeople who solve the client’s problem. Guess who is more successful?

Why is it then, when most unemployed executives network, connect, and interview, they focus on selling ‘stuff’ and not solving problems? I call this the Sales vs. Replenishment Model. And it works perfectly when looking for a job.

Replenishment is just what it means – you are there to replenish an open position. And you try your hardest to fashion yourself in a cookie-cutter way to fit into that replenishment model. What happens? You usually fail. Most accomplished account executives know that you can only replenish inventory for so long until your client smartens up (or someone else pitches them a better solution) and cuts/eliminates your order.

True Sales is the ability to listen, learn and understand what issues, problems, and opportunities your clients have and then try to help them solve them with one of your inventory. This clearly applies to your job search. You need to do a massive amount of research prior to your meeting, ask a lot of questions during the initial meeting, and then (and only then) do you present possible solutions to your lunch partner’s issues. One might say that this is a cookie-cutter approach to — but there is a lot less shoving a square peg into a round hole.

Bottom line — if you try to replenish, you lower yourself to every other salesperson out there hawking their stuff. If you endeavor to solve one of the company’s problems or present an alternate way to do things – you will instantly catch their attention and make a major impression.

Your chances to get that job have now risen dramatically.

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More than 130,000 advertising professionals have lost their jobs in this Great Recession. Lemonade is about what happens when people who were once paid to be creative in advertising are forced to be creative with their own lives.

www.lemonademovie.com

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How is your job search going? Not too good? Why not try something new?

Get Tough! The Best Jobs Are Never Advertised™ is a powerful workshop that will not only change HOW you search for a new position in this economy, but how to motivate yourself when you hit the frustrating ʻdipsʼ in your search. You will:

• Understand the critical factors that are impacting your job search right now.
• Access and employ bullet-proofing strategies against the economy.
• Ramp up every aspect of your marketing with techniques that will reshape the landscape of your search.

Rich will be working closely with Margo Meeker, Connecticut’s premiere Psychotherapist and Life Coach — together they will present a compelling workshop that will deliver clear strategies on how to find a job coupled with ideas on how to break through the simple obstacles that hold us back while unemployed.

Currently scheduled for:

Central Connecticut State University (only Rich)
Wednesday, December 2, 2009
5:00 PM to 6:00 PM

Temple Beth El in Stamford (Rich & Margo)
Wednesday, December 9, 2009
8:30 AM to 11:30 AM

Fairfield Library in Fairfield (Rich & Margo)
Wednesday, January 13, 2010
7:00 PM to 9:00 PM

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In this climate, it’s usually a waste of time to send out resumes. They go to people who can’t actually hire you. You want to talk to people who can. Here’s what you do when you finally meet them. See Part One here to learn about how to connect with them.

When the appointed day arrives, keep the following in mind:

• Your goal is to begin assembling a network, not to ask for a job. You’ve told the person you’re not going to do that, and for this to work, you really must not.
• Every supervisor is always on the lookout for talent. They never know when they will need someone, so you really are of interest to them.
• The first thing to understand is that even in times like these, PEOPLE ARE HIRING.
• The feedback you can get from each person will move you closer to a job, even if it’s just a little bit, so no matter what, the meeting will be beneficial.
• Ultimately, people are hired as much because someone likes them as because they are qualified.
• Each meeting has the potential to bring you one step closer to a job.

When the meeting starts, begin by thanking the person for his/her time. Then begin by asking questions about their background, how they got to that position, how did they come up with the idea of pet deodorant?

Listen carefully and attentively to all responses, and ask follow-up questions. Ultimately, they are going to turn the table and ask about you. You now have them. Tell them what you DO, not what you DID. Answer every question with enthusiasm and always add a positive spin. They will then ask where you are NOW. You then say: “Currently, I’m in transition and looking for opportunities in the _________ area. Do you know of any?”

This is the hardest question — but after you ask it, they usually start rattling off opportunities, companies, or contacts. Let’s get real — they know the game — but you have taken a real interest in them, they will take an interest in you.

At the end the the time, make sure to thank them for their time, and finish with something like this:
“Thank you. This has been incredibly helpful. I will definitely [do something they suggested.] Is there anyone else that you would recommend that I talk to?”

Take down any contact information they give you, thank them, and be on your way. When you get home, immediately write (not email) a thank-you note, and in it, mention specifically one piece of advice that was particularly helpful.

If at all possible (without awkwardness) leave the resume. Remember — it is very important that If you follow this plan and all goes well, at the end of the meeting, you’ve accomplished the following:

• You’ve made contact with someone who could, potentially, hire you.
• Your resume is on the desk of someone who could hire you.
• You’ve made them aware of your qualifications, and demonstrated that you are professional, motivated, and industrious.
• You’ve gotten another name of someone you can speak with.
• You’ve started, from scratch, a network of people who know you–who have seen your face and your qualifications–and who can advocate for you.

Often, however, you get more than this. Often the person you speak with will either:

• Say they don’t have any openings, but they know someone who does, and put you in touch with that person.
• Say they are hoping to hire again soon, and ask that you leave your materials
• Ask if you’d be interested in some part-time work or contract work with the company.
• Start a process by which you can be hired (by asking you to fill out an application, talk to HR, etc.

Sometimes, btw, this happens after they get your thank-you note, since that is such a rare occurrence in today’s world.

I want to be clear–this is not a magic potion that will land you a job immediately. But it is a significantly better use of your limited job-searching time than sending out resumes to people who have never met you.

It is scary, especially the first time you do it, but it really does work. My clients average about 1 job offer for every 5 – 7 meetings.

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Let’s be candid — In this climate, it’s usually a waste of time to send out resumes. They go to people who can’t actually hire you. You want to talk to people who can. So here’s what you do:

Step 1: Identify a few companies (start with 3) who employ people who do what you do. Then identify people who supervise those people. It does not matter in the slightest that those companies are not hiring.

Step 2: Do some research on that person. See if they’ve been interviewed anywhere, just received a promotion, or have been connected in any way with the company’s success (new product, release, uptick in stock price, etc.).

Step 3: Carefully construct a letter to each person you identified in Step 1, writing something like this:

Dear Mr/Ms _____________

I just saw your interview in BusinessWeek a few weeks ago and was very interested in your new focus on Pet Underarm Deodorants. It’s quite a new niche for your company and it brought up a number of questions that interest me since I am in a related industry — I wonder if I might have a few moments of your time.

Please understand, I’m not asking you for a job. I’m just looking to talk to a fellow colleague in the marketplace. Your insight would be invaluable and the meeting would be very brief.

I will call your office next week in hopes of scheduling an appointment. I understand that you are very busy. The meeting will take no more than fifteen minutes of your time. I look forward to speaking with you.

Sincerely, [you]

Most important of all, DO NOT include a resume.

When your letter has had time to reach its destination, make the follow up phone call, and pleasantly request the meeting. Reiterate that you are preparing for a job search and are only seeking advice and feedback. Most people are willing to give 15 minutes. (My clients average well over 50-60% of the meetings they ask for.)

If they hesitate, offer to buy coffee at a nearby spot, and remind them how valuable their input would be.

It’s that easy. Tomorrow, we’ll cover what you do when you actually meet them. Stay tuned!

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Here’s a fun list that I saw on Madatoms:

Denial
I’ve got plenty of money! I’ll start looking next week!

Anger
Craigslist and Monster sucks! I’ve got a college degree! Jobs should be looking for me!

Bargaining
I’ll just drive around looking for help wanted signs. I hear that Starbucks has health insurance!

Depression
Why did I major in Communications? I have no useful skills.

Acceptance
I didn’t know I qualified for unemployment! I love this country!

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Of all the insulting labels lobbed at Wall Street over the past two years, you wouldn’t expect “overconfident” to be the one that hurt. But it has. This week’s New Yorker article by Malcolm Gladwell on Wall Street’s “psychology of overconfidence” struck a nerve.

By Malcolm Gladwell in the New Yorker Magazine.

In 1996, an investor named Henry de Kwiatkowski sued Bear Stearns for negligence and breach of fiduciary duty. De Kwiatkowski had made—and then lost—hundreds of millions of dollars by betting on the direction of the dollar, and he blamed his bankers for his reversals.

The district court ruled in de Kwiatkowski’s favor, ultimately awarding him $164.5 million in damages. But Bear Stearns appealed—successfully—and in William D. Cohan’s engrossing account of the fall of Bear Stearns, “House of Cards,” the firm’s former chairman and C.E.O. Jimmy Cayne tells the story of what happened on the day of the hearing:

“Their lead lawyer turned out to be about a 300-pound goon from Long Island . . . a really irritating guy who had cross-examined me and tried to knock me around in the lower court trial. Now when we walk into the courtroom for the appeal, they’re arguing another case and we have to wait until they’re finished. Then I see my blood enemy stand up and he’s going to the bathroom. So I wait till he passes and then I follow him in and it’s just he and I in the bathroom. And I said to him, “Today you’re going to get your ass kicked, big.” He ran out of the room. He thought I might have wanted to start it right there and then.”

At the time Cayne said this, Bear Stearns had spectacularly collapsed. The eighty-five-year-old investment bank, with its shiny new billion-dollar headquarters and its storied history, was swallowed whole by J. P. Morgan Chase. Cayne himself had lost close to a billion dollars. His reputation—forty years in the making—was in ruins, especially when it came out that, during Bear’s final, critical months, he’d spent an inordinate amount of time on the golf course.

Did Cayne think long and hard about how he wanted to make his case to Cohan? He must have. Cayne understood selling; he started out as a photocopier salesman, working the nine-hundred-mile stretch between Boise and Salt Lake City, and ended up among the highest-paid executives in banking. He was known as one of the savviest men on the Street, a master tactician, a brilliant gamesman. “Jimmy had it all,” Bill Bamber, a former Bear senior managing director, writes in “Bear Trap: The Fall of Bear Stearns and the Panic of 2008” (a book co-written by Andrew Spencer). “The ability to read an opponent. The ability to objectively analyze his own strengths and weaknesses. . . . He knew how to exploit others’ weaknesses—and their strengths, for that matter—as a way to further his own gain. He knew when to take his losses and live to fight another day.”

Cohan asked Cayne about the last days of Bear Stearns, in the spring of 2008. Wall Street had become so spooked by rumors about the firm’s financial status that investors withdrew their capital, and no one would lend Bear the money required for its day-to-day operations. The bank received some government money, via J. P. Morgan. But Timothy Geithner, then the head of the New York Federal Reserve Bank, didn’t open the Fed’s so-called “discount window” to investment banks until J. P. Morgan’s acquisition of Bear was under way. What did Cayne think of Geithner? Picture the scene. The journalist in one chair, Cayne in another. Between them, a tape recorder. And the savviest man on Wall Street sets out to salvage his good name:

“The audacity of that jerk in front of the American people announcing he was deciding whether or not a firm of this stature and this whatever was good enough to get a loan. Like he was the determining factor, and it’s like a flea on his back, floating down underneath the Golden Gate Bridge, saying, “Raise the bridge.” This guy thinks he’s got everything. He’s got nothing.”

Since the beginning of the financial crisis, there have been two principal explanations for why so many banks made such disastrous decisions. The first is structural. Regulators did not regulate. Institutions failed to function as they should. Rules and guidelines were either inadequate or ignored. The second explanation is that Wall Street was incompetent, that the traders and investors didn’t know enough, that they made extravagant bets without understanding the consequences. But the first wave of postmortems on the crash suggests a third possibility: that the roots of Wall Street’s crisis were not structural or cognitive so much as they were psychological.

In “Military Misfortunes,” the historians Eliot Cohen and John Gooch offer, as a textbook example of this kind of failure, the British-led invasion of Gallipoli, in 1915. Gallipoli is a peninsula in southern Turkey, jutting out into the Aegean. The British hoped that by landing an army there they could make an end run around the stalemate on the Western Front, and give themselves a clear shot at the soft underbelly of Germany. It was a brilliant and daring strategy. “In my judgment, it would have produced a far greater effect upon the whole conduct of the war than anything [else],” the British Prime Minister H. H. Asquith later concluded. But the invasion ended in disaster, and Cohen and Gooch find the roots of that disaster in the curious complacency displayed by the British.

The invasion required a large-scale amphibious landing, something the British had little experience with. It then required combat against a foe dug into ravines and rocky outcroppings and hills and thickly vegetated landscapes that Cohen and Gooch call “one of the finest natural fortresses in the world.” Yet the British never bothered to draw up a formal plan of operations. The British military leadership had originally estimated that the Allies would need a hundred and fifty thousand troops to take Gallipoli. Only seventy thousand were sent. The British troops should have had artillery—more than three hundred guns.

They took a hundred and eighteen, and, for the most part, neglected to bring howitzers, trench mortars, or grenades. Command of the landing at Sulva Bay—the most critical element of the attack—was given to Frederick Stopford, a retired officer whose experience was largely administrative. Stopford had two days during which he had a ten-to-one advantage over the Turks and could easily have seized the highlands overlooking the bay. Instead, his troops lingered on the beach, while Stopford lounged offshore, aboard a command ship. Winston Churchill later described the scene as “the placid, prudent, elderly English gentleman with his 20,000 men spread around the beaches, the front lines sitting on the tops of shallow trenches, smoking and cooking, with here and there an occasional rifle shot, others bathing by hundreds in the bright blue bay where, disturbed hardly by a single shell, floated the great ships of war.”

When word of Stopford’s ineptitude reached the British commander, Sir Ian Hamilton, he rushed to Sulva Bay to intercede—although “rushed” may not be quite the right word here, since Hamilton had chosen to set up his command post on an island an hour away and it took him a good while to find a boat to take him to the scene.

Cohen and Gooch ascribe the disaster at Gallipoli to a failure to adapt—a failure to take into account how reality did not conform to their expectations. And behind that failure to adapt was a deeply psychological problem: the British simply couldn’t wrap their heads around the fact that they might have to adapt. “Let me bring my lads face to face with Turks in the open field,” Hamilton wrote in his diary before the attack. “We must beat them every time because British volunteer soldiers are superior individuals to Anatolians, Syrians or Arabs and are animated with a superior ideal and an equal joy in battle.”

Hamilton was not a fool. Cohen and Gooch call him an experienced and “brilliant commander who was also a firstrate trainer of men and a good organizer.” Nor was he entirely wrong in his assessments. The British probably were a superior fighting force. Certainly they were more numerous, especially when they held that ten-to-one advantage at Sulva Bay. Hamilton, it seems clear, was simply overconfident—and one of the things that happen to us when we become overconfident is that we start to blur the line between the kinds of things that we can control and the kinds of things that we can’t. The psychologist Ellen Langer once had subjects engage in a betting game against either a self-assured, well-dressed opponent or a shy and badly dressed opponent (in Langer’s delightful phrasing, the “dapper” or the “schnook” condition), and she found that her subjects bet far more aggressively when they played against the schnook. They looked at their awkward opponent and thought, I’m better than he is. Yet the game was pure chance: all the players did was draw cards at random from a deck, and see who had the high hand. This is called the “illusion of control”: confidence spills over from areas where it may be warranted (“I’m savvier than that schnook”) to areas where it isn’t warranted at all (“and that means I’m going to draw higher cards”).

At Gallipoli, the British acted as if their avowed superiority over the Turks gave them superiority over all aspects of the contest. They neglected to take into account the fact that the morning sun would be directly in the eyes of the troops as they stormed ashore. They didn’t bring enough water. They didn’t factor in the harsh terrain. “The attack was based on two assumptions,” Cohen and Gooch write, “both of which turned out to be unwise: that the only really difficult part of the operation would be getting ashore, after which the Turks could easily be pushed off the peninsula; and that the main obstacles to a happy landing would be provided by the enemy.”

Most people are inclined to use moral terms to describe overconfidence—terms like “arrogance” or “hubris.” But psychologists tend to regard overconfidence as a state as much as a trait. The British at Gallipoli were victims of a situation that promoted overconfidence. Langer didn’t say that it was only arrogant gamblers who upped their bets in the presence of the schnook. She argues that this is what competition does to all of us; because ability makes a difference in competitions of skill, we make the mistake of thinking that it must also make a difference in competitions of pure chance. Other studies have reached similar conclusions. As novices, we don’t trust our judgment. Then we have some success, and begin to feel a little surer of ourselves. Finally, we get to the top of our game and succumb to the trap of thinking that there’s nothing we can’t master. As we get older and more experienced, we overestimate the accuracy of our judgments, especially when the task before us is difficult and when we’re involved with something of great personal importance. The British were overconfident at Gallipoli not because Gallipoli didn’t matter but, paradoxically, because it did; it was a high-stakes contest, of daunting complexity, and it is often in those circumstances that overconfidence takes root.

Several years ago, a team headed by the psychologist Mark Fenton-O’Creevy created a computer program that mimicked the ups and downs of an index like the Dow, and recruited, as subjects, members of a highly paid profession. As the line moved across the screen, Fenton-O’Creevy asked his subjects to press a series of buttons, which, they were told, might or might not affect the course of the line. At the end of the session, they were asked to rate their effectiveness in moving the line upward. The buttons had no effect at all on the line. But many of the players were convinced that their manipulation of the buttons made the index go up and up. The world these people inhabited was competitive and stressful and complex. They had been given every reason to be confident in their own judgments. If they sat down next to you, with a tape recorder, it wouldn’t take much for them to believe that they had you in the palm of their hand. They were traders at an investment bank.

The high-water mark for Bear Stearns was 2003. The dollar was falling. A wave of scandals had just swept through the financial industry. The stock market was in a swoon. But Bear Stearns was an exception. In the first quarter of that year, its earnings jumped fifty-five per cent. Its return on equity was the highest on Wall Street. The firm’s mortgage business was booming. Since Bear Stearns’s founding, in 1923, it had always been a kind of also-ran to its more blue-chip counterparts, like Goldman Sachs and Morgan Stanley. But that year Fortune named it the best financial company to work for. “We are hitting on all 99 cylinders,’’ Jimmy Cayne told a reporter for the Times, in the spring of that year, “so you have to ask yourself, What can we do better? And I just can’t decide what that might be.’’ He went on, “Everyone says that when the markets turn around, we will suffer. But let me tell you, we are going to surprise some people this time around. Bear Stearns is a great place to be.’’

With the benefit of hindsight, Cayne’s words read like the purest hubris. But in 2003 they would have seemed banal. These are the kinds of things that bankers say. More precisely—and here is where psychological failure becomes more problematic still—these are the kinds of things that bankers are expected to say. Investment banks are able to borrow billions of dollars and make huge trades because, at the end of the day, their counterparties believe they are capable of making good on their promises. Wall Street is a confidence game, in the strictest sense of that phrase.

This is what social scientists mean when they say that human overconfidence can be an adaptive trait. “In conflicts involving mutual assessment, an exaggerated assessment of the probability of winning increases the probability of winning,” Richard Wrangham, a biological anthropologist at Harvard, writes. “Selection therefore favors this form of overconfidence.” Winners know how to bluff. And who bluffs the best? The person who, instead of pretending to be stronger than he is, actually believes himself to be stronger than he is. According to Wrangham, self-deception reduces the chances of “behavioral leakage”; that is, of “inadvertently revealing the truth through an inappropriate behavior.” This much is in keeping with what some psychologists have been telling us for years—that it can be useful to be especially optimistic about how attractive our spouse is, or how marketable our new idea is. In the words of the social psychologist Roy Baumeister, humans have an “optimal margin of illusion.”

If you were a Wall Street C.E.O., there were two potential lessons to be drawn from the collapse of Bear Stearns. The first was that Jimmy Cayne was overconfident. The second was that Jimmy Cayne wasn’t overconfident enough. Bear Stearns did not collapse, after all, simply because it had made bad bets. Until very close to the end, the firm had a capital cushion of more than seventeen billion dollars. The problem was that when, in early 2008, Cayne and his colleagues stood up and said that Bear was a great place to be, the rest of Wall Street no longer believed them. Clients withdrew their money, and lenders withheld funding. As the run on Bear Stearns worsened, J. P. Morgan and the Fed threw the bank a lifeline—a multibillion-dollar line of credit. But confidence matters so much on Wall Street that the lifeline had the opposite of its intended effect. As Bamber writes:

This line-of-credit, the stop-gap measure that was supposed to solve the problem that hadn’t really existed in the first place had done nothing but worsen it. When we started the week, we had no liquidity issues. But because people had said that we did have problems with our capital, it became true, even though it wasn’t true when people started saying it. . . . So we were forced to find capital to offset the losses we’d sustained because somebody decided we didn’t have capital when we really did. So when we finally got more capital to replace the capital we’d lost, people took that as a bad sign and pointed to the fact that we’d had no capital and had to get a loan to cover it, even when we did have the capital they said we didn’t have.

Of course, one reason that over-confidence is so difficult to eradicate from expert fields like finance is that, at least some of the time, it’s useful to be overconfident—or, more precisely, sometimes the only way to get out of the problems caused by overconfidence is to be even more overconfident.

From an individual perspective, it is hard to distinguish between the times when excessive optimism is good and the times when it isn’t. All that we can say unequivocally is that overconfidence is, as Wrangham puts it, “globally maladaptive.” When one opponent bluffs, he can score an easy victory. But when everyone bluffs, Wrangham writes, rivals end up “escalating conflicts that only one can win and suffering higher costs than they should if assessment were accurate.” The British didn’t just think the Turks would lose in Gallipoli; they thought that Belgium would prove to be an obstacle to Germany’s advance, and that the Russians would crush the Germans in the east. The French, for their part, planned to be at the Rhine within six weeks of the start of the war, while the Germans predicted that by that point they would be on the outskirts of Paris. Every side in the First World War was bluffing, with the resolve and skill that only the deluded are capable of, and the results, of course, were catastrophic.

Jimmy Cayne grew up in Chicago, the son of a patent lawyer. He wanted to be a bookie, but he realized that it wasn’t quite respectable enough. He went to Purdue University to study mechanical engineering—and became hooked on bridge. His grades suffered, and he never graduated. He got married in 1956 and was divorced within four years. “At this time, he was one of the best bridge players in Chicago,” his ex-brother-in-law told Cohan. “In fact, that’s the reason for the divorce. There was no other woman or anything like that. The co-respondent in their divorce was bridge. He spent all of his time playing bridge—every night. He wasn’t home.” He was selling scrap metal in those days, and, Cohan says, he would fall asleep on the job, exhausted from playing cards. In 1964, he moved to New York to become a professional bridge player. It was bridge that led him to his second wife, and to a job interview with Alan (Ace) Greenberg, then a senior executive at Bear Stearns. When Cayne told Greenberg that he was a bridge player, Cayne tells Cohan, “you could see the electric light bulb.” Cayne goes on:

[Greenberg] says, “How well do you play?” I said, “I play well.” He said, “Like how well?” I said, “I play quite well.” He says, “You don’t understand.” I said, “Yeah, I do. I understand. Mr. Greenberg, if you study bridge the rest of your life, if you play with the best partners and you achieve your potential, you will never play bridge like I play bridge.”

Right then and there, Cayne says, Greenberg offered him a job.

Twenty years later, the scene was repeated with Warren Spector, who went on to become a co-president of the firm. Spector had been a bridge champion as a student, and Cayne somehow heard about it. “Suddenly, out of nowhere there’s a bridge player at Bear Stearns on the bond desk,” Cayne recalls. Spector tells Cohan, “He called me up and said, ‘Are you a bridge player?’ I said, ‘I used to be.’ So bridge was something that he, Ace, and I all shared and talked about.” As reports circulated that two of Bear Stearns’s hedge funds were going under—a failure that started the bank on its long, downward spiral into collapse—Spector and Cayne were attending the Spingold K.O. bridge tournament, in Nashville. The Wall Street Journal reported that, of the twenty-one workdays that month, Cayne was out of the office for nearly half of them.

It makes sense that there should be an affinity between bridge and the business of Wall Street. Bridge is a contest between teams, each of which competes over a “contract”—how many tricks they think they can win in a given hand. Winning requires knowledge of the cards, an accurate sense of probabilities, steely nerves, and the ability to assess an opponent’s psychology. Bridge is Wall Street in miniature, and the reason the light bulb went on when Greenberg looked at Cayne, and Cayne looked at Spector, is surely that they assumed that bridge skills could be transferred to the trading floor—that being good at the game version of Wall Street was a reasonable proxy for being good at the real-life version of Wall Street.

It isn’t, however. In bridge, there is such a thing as expertise unencumbered by bias. That’s because, as the psychologist Gideon Keren points out, bridge involves “related items with continuous feedback.” It has rules and boundaries and situations that repeat themselves and clear patterns that develop—and when a player makes a mistake of overconfidence he or she learns of the consequences of that mistake almost immediately. In other words, it’s a game. But running an investment bank is not, in this sense, a game: it is not a closed world with a limited set of possibilities. It is an open world where one day a calamity can happen that no one had dreamed could happen, and where you can make a mistake of overconfidence and not personally feel the consequences for years and years—if at all. Perhaps this is part of why we play games: there is something intoxicating about pure expertise, and the real mastery we can attain around a card table or behind the wheel of a race car emboldens us when we move into the more complex realms. “I’m good at that. I must be good at this, too,” we tell ourselves, forgetting that in wars and on Wall Street there is no such thing as absolute expertise, that every step taken toward mastery brings with it an increased risk of mastery’s curse. Cayne must have come back from the Spingold bridge tournament fortified in his belief in his own infallibility. And the striking thing about his conversations with Cohan is that nothing that had happened since seemed to have shaken that belief.

“When I left,” Cayne told Cohan, speaking of his final day at Bear Stearns, “I had three different meetings. The first was with the president’s advisory group, which was about eighty people. There wasn’t a dry eye. Standing ovation. I was crying.” Until the very end, he evidently saw the world that he wanted to see. “The second meeting was with the retail sales force on the Web,” he goes on. “Standing ovation. And the third was a partners’ meeting that night for me to tell them that I was stepping down. Standing ovation, of the whole auditorium.”

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