Citadel founder and CEO Ken Griffin pointed out how low the success rate is while investing and said one of the attributes that’s needed to work at his hedge fund is knowing how to deal with failure.
During a discussion at the America Business Forum in Miami last week, he said being smart is important but also just “table stakes.”
“What you really want is somebody who’s both very bright, very driven, but who has incredible perseverance,” Griffin added.
He estimated that an investment choice is correct only about 53%-54% of the time, so one of the top strengths that his colleagues at Citadel must have is resilience that helps them cope with mistakes the rest of the time.
But U.S. schools are not developing those traits, Griffin warned, pointing to the increased ease with which students are earning high marks.
“One of the problems with grade inflation in the United States is we’re not teaching young Americans what it’s like to fall short,” he said.
In fact, a report last month from Harvard, which Griffin attended, showed that more than 60% of grades that the school’s undergraduates now receive are A’s, up from just a quarter of grades two decades ago.
Grade inflation ramped up in the late 2010s, then really jumped during the pandemic, but has leveled off in recent years, the report said. The graduating class of 2025 had a median grade point average of 3.83, up from 3.64 in 2015.
“Falling short is what happens in business all the time,” Griffin said. “You need to pick yourself up. You need to put one foot in front of the next, and you need to move away from that place of failure to a better place, to a place of success. So there’s a huge emphasis on perseverance and resilience in the people that we look for.”
In April, he told students at his old high school that the top skills he values are intellect, aptitude, and communication. And he can instantly tell whether or not someone will go on to become successful based on how adaptable they are to change.
He added that it’s important for entrepreneurs not to focus so much on what goes wrong but instead try to figure out what it’s going to take to succeed.
Griffin also told students at Stanford University’s Graduate School of Business in May that “Citadel is a team sport,” highlighting the importance of working with strong partners.
Similarly in Miami last week, he said finding people who complement your skills is critical to success.
“I think about the start of Citadel. I really surrounded myself with people who were different than I was, and that made for such a strong firm,” he added.