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by Mark Delfino

Life’s journey always presents challenges, but there are times when they feel larger, deeper and more intractable than normal.  The Spanish flu, Great Depression and World Wars created bleak backdrops that persisted for years.  I remember the 1960s and early 1970s as a time of conflict and unrest.  In some ways, the current climate feels like a mash-up of 1960s social conflict and the Spanish flu outbreak.  Increased stress, fear and even paralysis are commonplace in times like these.

I’ve tried hard to remain an optimist.  Despite our challenges and dark moments, I believe there is a brighter future on the other side of these storms.  It appears the financial markets are like-minded.  To many, the U.S. stock market seems out of touch with reality.  Yes, this spring, it logged one of the fastest bear markets on record.  But, it also began a vertical ascent to new highs at a time when COVID-19 cases were exploding and the economy was hitting the breaks.

Is this madness?  What does the market know that we don’t?  In my view, there is no secret message hidden in the way the market has moved this year.  Rather, the message is about our ability as human beings to persevere and come out the other side of adversity.  In essence, investors – the ones who drive the direction of the stock market – are making a positive bet on our resilience.

What is resilience? 

Webster’s defines it as: “an ability to recover from or adjust easily to misfortune or change.”  Another definition is “moving on from an incident without long-term negative consequences.”  These are both somewhat simplified views of a complex concept.  Since resilience is much more than simply making it to the other side, I wanted to explore what’s been researched and written about it.

The study of resilience is relatively recent.  This is particularly true when talking about resilience in the context of economies, corporations or financial markets.  Yet, it became clear to me that market and corporate resilience share fundamental characteristics with the general concept of human beings’ being able to adapt and recover.

First, coping is important but insufficient.  How we cope is more important.  In general, when humans face adversity, most of us will manage to persevere somehow.  Yet, some will cope better, recover faster and come out stronger than would be expected given the circumstances.  The same is true of companies and economies.  The research shows that simply hunkering down and “riding it out” isn’t enough.  People and organizations need to operate thoughtfully, think clearly and adapt in positive ways during the challenging times in order to create resilience.  This sets the stage for the rebound, resilience’s bounce-back feature.

Second, emotions and attitude play a huge role in weathering any storm.  Research shows that constant fear and worry serve to weaken us, while positivity, a balanced perspective and a belief in a better tomorrow can help bring the clarity and fuel the confidence needed to advance forward and to manage strong feelings and impulses that could harm us.

Third, resilience requires intentionality and motivation.  It is not a passive process.  It requires thoughtful, purposeful actions amidst a storm.  Motivation is needed to sustain the mental and physical energy required to be resilient in times of crisis.  This is especially true in organizations because without strong leadership and clear direction, individuals often react differently to the same circumstances.

We all know people who exemplify these attributes, those who we would characterize as resilient.  Companies can be resilient too.  McKinsey & Company did an exhaustive study and narrowed in on a subset of companies that have been able to consistently take decisive action during downturns or in the face of industry upheaval over the span of more than two decades.  These “Resilients” held up better during economic downturns and grew 7% faster per year than their peers.  Not surprisingly, this growth differential was widest during and soon after a crisis, illuminating the power of resilience.

I’d like to think that HoyleCohen falls in the category of “Resilients”.  Each time we’ve taken an unexpected blow, we’ve adapted and come out the other side stronger and better with more resolve.  I believe that this pandemic will be no exception.  Our staff didn’t miss a beat when we went 100% remote in March, and we’ve all worked hard to maintain our standards of client service since then, despite the various challenges that the pandemic and our work-from-home environments have presented.  Rather than just cope, we’ve acted with intention, adapted and accelerated our investments in systems and process in order to create even more efficiency that will benefit us and our clients regardless of future circumstances.  Finally, we’ve tried to stay positive. We remain focused on the future while continuing to support our clients and each other.

Our clients have also shown amazing resilience.  They fought their fears and impulses during the market collapse.  They embraced the now commonplace Zoom meeting.  They have remained positive and empathetic, often reaching out simply to ask, “how are you?”  In many ways, the pandemic has brought us closer.  For them and for this, I am grateful.

I believe resilience has played a large role in the financial markets’ ability to look past the present to a better future.  This isn’t to say that there won’t be dark days ahead.  Negative outcomes and suffering will inevitably continue for a while despite having endured so much already.  Yet, this crisis has also served as a catalyst for Resilients across the globe.  The world’s brightest minds and most capable organizations are collaborating to develop life-saving medicines in record time.  Businesses are adapting and evolving in ways and at a pace we’ve never seen.

The 1960s and 1970s may have felt tumultuous and stagnant but it was the era that spawned Wal-Mart, Apple & Microsoft and that landed humans on the moon.  Just like winter before spring or dark before dawn, I believe that years from now, this dark phase will have set the stage for some of the most impactful and positive advances and outcomes we’ve ever seen.  I don’t know if these years will earn catchy monikers of prior eras, like the Roaring 20s or the Golden Age of Capitalism, but I remain positive on humanity, what we can do and how we can adapt.  Such is the power of resilience.

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With sorrow for those who are suffering and deep gratitude to all who are helping us advance through it together.

Mark Delfino

CEO & Senior Managing Director


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