Portfolio Management

I spent almost twenty years as an institutional portfolio manager (think billions of dollars of assets under management) before I made the leap.  My investment career began with the late 90s Dot Com Crash followed by a front row seat to the 2008 Great Recession and beyond. During that time I gained invaluable experience investing in almost every asset class and market globally.

I recently spoke to a group regarding my economic and financial market outlook.  I discussed where I believe we are in the current market cycle and potential impacts from artificial intelligence — more on both in the coming weeks.

One of the key points I made was the idea of managing your talent stack like an investment portfolio.

Investing in your talent portfolio has never been more important as AI is set to disrupt virtually everything it touches.

To further make the point, you save money and invest to provide future income. Your talent stack provides both current and future income.

AI could severely reduce — if not eliminate — the value of your talent stack. Alternatively—if managed well—your talent stack could increase 10x with AI.

The following is a simple approach to managing your talent stack which includes a helpful template for free subscribers linked at the end.

Evaluating Your Talent Stack

Scott Adams, the creator of Dilbert, coined the term talent stack but also provided an insight that made us all re-evaluate our skills and experience.

His observation is that it’s better—and easier—to be above average at a few complementary skills than elite at one.

Being good at a few complementary skills, Adams argues, makes you elite.

In my own case, I’ve met plenty of Fractional CFOs who exceed my finance and accounting knowledge. Similarly, many data scientist and software developers best me in their respective realms as well.

However, I’ve often heard with surprise:

“Wow, a CFO who can build software?” or

“I wouldn’t have expected you to know SQL and Python (programming languages used primarily in data science).”

I’m not elite in any of the specific disciplines but the combination—at least for now— is highly valued in the marketplace.

So what is your talent stack?

Begin by listing your skills across categories such as technical, creative, interpersonal, operational, financial and meta-skills (mindset, etc.).

Next, rate your skill using a simple 1-5 score (1 = Bottom 20%, 5 = Top 20%, etc.).

Talent Stack Risk Assessment

Once you have evaluated your talent stack, you then need to provide two risk scores for each talent or skill.

The first is understanding how dependent your income is on the particular skill. Again, use a simple 1-5 rating (1 = No Impact, 5 = Significant Impact, etc.) to rate each skill.

The second is assigning an AI disruption score.

Objectivity here is difficult — We all like to think our skills and talents won’t be replaced by AI. “It won’t happen to me” is a real phenomenon.

I would ask AI to evaluate each skill. The Talent Stack Risk Assessment template provided below contains 38 skills across 7 categories. I risk scored each using ChatGPT.

If you prefer to score your own, provide Chat GPT or another AI with your skill list and prompt it to provide a score. Here is an example prompt to use:

You are my career advisor.  I have the following talent stack:
[Insert List of Skills and Talents]
Provide a score from 1-5 (1 = Least Likely to 5 = Most Likely) indicating the likelihood the skill or talent will be disrupted by AI. Include a brief reason for your score.  Provide the results in an Excel table.

Augment or be obsolete

I used the framework to evaluate my own talent stack.

For most of us our skill rating and dependency scores should be correlated. For example, my strongest areas are:

• Business / Strategic

• Technical / Analytical

• Meta-Skills / Mindset

Not surprising for someone who is an entrepreneur and provides Fractional CFO services for a living.

Where are the risks and opportunities in my stack?

Ideally, you want consistency (all green or all red) across the dimensions of risk, rating and dependency.

For example, I don’t depend on Create / Content type skills for my living and it is an area expected to be heavily disrupted. Good for me as I am a consumer of such services and my cost to acquire them should fall.

Conversely, I should be concerned about my Technical / Analytical talent stack.

For example, tools currently exist that:

• Generate financial forecasts

• Analyze financial statements

• Discover trends amongst customer or other business data

Why can I still charge for my services?

1. The tools aren’t great—yet

2. The data used by such tools is either a mess or isn’t connected (lives in spreadsheets)

How can I de-risk my Technical / Analytical skill stack?

• Run the transition - my financial knowledge plus data skills will remain valuable as companies transition to AI tools. How can I help them transition?

• Build the tools - I am experimenting with AI workflows and agents that can replace jobs and functions I currently perform. Is there a product to be found?

• Enhance my own skills - How can I use AI to improve the sub-skills that may be less commoditized.

The Next Step

How are you thinking about your own talent stack as AI becomes more widely adopted?

I’ve spoken to many on the subject and hear answers similar to:

• “I haven’t thought much about it.”

• “I don’t think it will affect me much.”

Would you same the same about your retirement portfolio?

The risk and possibility with AI will be tremendous and somewhat unpredictable.

Managing your talent stack like a portfolio of financial assets will be critical as AI adoption spreads.

If you would like to do a full talent stack assessment, free subscribers can access the Talent_Stack_Risk_Assessment template in the resources page.

My goal with The Leap is to provide you each Saturday with the knowledge, tools and lessons learned to help you get started and keep going toward building your future. 

Whether you are making the leap to startups, solo-entrepreneurship, freelancing, side hustles or other creative ventures, the tools and strategies to succeed in each are similar.