In Defense of the Difficult Person

In Defense of the Difficult Person

Learning how to say no is an essential part of becoming a better investor, lender, or financial modeler. The challenge is knowing when an analysis will genuinely improve a decision—and when it will merely consume time, create false precision, or confirm what you already know.

No. Just putting it on the page gives me unspeakable joy. “No” can be an adjective; it often serves as an adverb; in other cases, it cries loudly and proudly as an interjection; and do not sleep on “no” as a noun. No is dynamic. It sings with dulcet, mellifluous tones. So much can and is said with so little.

And yet, “no” is not easy. No to another slice of cake? Would that I were so strong. No to that not-so-clever idea that your boss keeps proffering as if it were the greatest revelation since Hamilton’s and Perelman’s work on proving the Poincaré conjecture? Bonne chance!

To be clear, I am not openly advocating for wanton insubordination; rather, a capable professional must develop the intuition – as informed by rigorous analysis that translates to quality experience and judgment over time – necessary to know when no is the appropriate answer.

Speaking from experience, too often I have known that a specific analysis might be an exercise in futility, and yet I lacked the courage to push back effectively. Many years ago, during the early days of the COVID 19 lockdown, when the financing of new-build power plants came to a complete halt, my then employer decided to use the comparative downtime as an opportunity to do a deep-dive on new international markets for the sale and financing of combined-cycle natural gas power plants.

I was, at the time, focused on the so-called “EMEA” (Europe, Middle East, and Africa) regions, and accordingly tasked with preparing a systematic ten-page investment memo for 15 countries within that region. One such investment memo was to be on the lovely island nation of the Seychelles.

I knew very little about the Seychelles, other than that it was an East African Island nation near Madagascar and a former territory under the iniquitous thumb of both the British and French imperial apparatus. So, as one did before the AI era, I googled the Seychelles and went straight to its Wikipedia page: approximately 100,000 residents; about 50 MW of electric load; USD 1.87 B of GDP in 2019; and no domestic source of natural gas. I stopped there and audibly laughed out loud (though for the avoidance of any doubt, not at or about the great and beautiful nation of the Seychelles!).

The notion that the Seychelles, namely an Archipelago nation with 115 islands, with a small population, and no access to natural gas, would have any use for a multi-billion-dollar natural-gas-fired power plant and the associated gas supply infrastructure – equal or greater than the size of its annual GDP no less – was ridiculous.

I strolled confidently into the weekly team meeting (or rather I dialed in two minutes early) thinking that I would simply articulate several of the above points in order to get out of the aforementioned exercise in futility in order to free me up to focus on another country, or some other productive task. When it came my turn to speak, I began my well-prepared monologue on all of the above, but the managing director responsible for the entire exercise quickly cut me off, and insisted that I just do as I was told. As associates often do, I reluctantly gave the equivalent of a “roger that” and stopped short of making the very rock-solid case for why this was a giant waste of everyone’s time.

As such, I spent the next week preparing a ten-page memo on the Seychelles that effectively said, for all intents and purposes, that it was a very poor candidate for a combined-cycle natural gas power plant. Later that month, as we went through the agenda at the outset of the meeting, the head of our group immediately dismissed the necessity of covering the Seychelles. She quipped, “who’s hair-brained idea was it to put together an investment memo on selling natural gas turbines to the Seychelles?”

Whilst the above case might seem like a particularly elaborate, self-indulgent, and obvious example, I share it as a relatable example of the kind work investors and lenders can often find themselves doing to no end.

Many of you can, no doubt, relate to the feeling of reluctantly agreeing to review a pitch deck for a deal because you do not want to say no to a friend or professional acquaintance, even though the investment is completely outside of your strike zone in terms of cheque size, industry sector, investment security type, or perhaps all of the above at the same time! Or perhaps a manager has asked you to convert a quarterly construction draw schedule into a monthly schedule (during an initial screening phase, no less) to produce a marginally more precise equity IRR, that is unlikely to drive outcomes but takes a day to model.

So how does one then effectively say no, you might ask? For that, I will start by sharing an other anecdote about the most effective CIO with whom I have ever had the pleasure of working. This CIO, who led not only investment strategy but also execution for one of the nation’s largest Green Banks, approached every introductory conversation with a counterpart with what can only be described as radical candour.

On one particular due diligence call with a prospective client, five minutes into a conversation in which the CEO and CFO were clearly hoping to dazzle us with science, the CIO, firmly but politely interrupted and asked two essential questions: (i) did they have a counterpart willing to underwrite an equity cheque for 30% of the project’s construction costs; and (ii) could they support a 9.5% interest rate on the specific deal. The other side, which was likely used to having at least thirty minutes to regale prospective lenders was taken aback with the candour, and flailed around for a few minutes, attempting to re-direct the conversation to a completely unrelated stock talking point with the conviction of a United States Senator on the campaign trail. The CIO – once again firmly but politely – noted that these were essential pre-requisites to any term sheet discussions. The door was left open to revisiting the topic if circumstances changed, but the call came to a swift end thereafter.

Whilst not everyone can pull that off, and no doubt this particular CIO’s approach may have rubbed some folks the wrong way, there is real virtue in our line of work in avoiding unnecessary work.

Too often, we are taught that as good negotiators, it is essential not to reveal too much about our investment needs, and to keep options alive as long as possible; however, both the withholding of information and the pursuit of endless optionality come at their own costs.

The lesson is not that investors and financial modelers should become reflexive naysayers. Nay, it is that we should become better at distinguishing between work that reduces uncertainty and work that merely produces more detail. A good “no” is rarely an assertion of preference; it is a judgment about materiality, decision-usefulness, and the opportunity cost of scarce time. A practical, non-exhaustive rubric might include:

• Start with a back-of-the-envelope calculation. Before building the model, estimate the outer bound of the possible impact. If the answer cannot plausibly change the decision, the analysis may not be worth doing. A simplified model, or a sensitivity analysis that can quantify the materiality of a driver of value can be powerful tools to that end.
• Ask what decision the work will inform. “What would we do differently if the answer were X rather than Y?” is often the most useful question in finance. If nobody can answer it, that is itself an answer.
• Test materiality before precision. Distinguish between an analysis that could move valuation, sizing, risk allocation, or investment approval and one that will merely add another decimal place.
• Make the opportunity cost visible. A request is easier to challenge when framed not as “I do not want to do this,” but as “this will take a day and displace these two higher-priority analyses.”
• Build organizational support for principled pushback. Teams should agree in advance on screening criteria, materiality thresholds, and minimum investment requirements so that “no” rests on shared standards rather than individual temperament.
• Where necessary, comply—but flag the concern. Sometimes the right answer is: “I will do it, but I do not expect it to affect the recommendation.” Afterward, revisit whether the result justified the effort. Repeating that cycle builds trust in your judgment.
• Leave the door open where circumstances may change. “No, because the project currently lacks committed equity” is more useful than “No, never.” A well-framed rejection identifies the conditions under which the answer could become yes.

The objective, then, is not to do less work for its own sake. It is to devote rigorous work to questions whose answers matter. In investing, lending, and financial modeling, the scarce resource is not Excel capacity, but rather, it is attention. Learning to protect said attention — politely, analytically, and with conviction — is one of the most valuable forms of professional judgment.

Here at Pivotal180, we accordingly focus not only on teaching the tools of financial analysis and transaction structuring, but also on developing the judgment to know when, how, and why to use them. Said another way, modelling is not simply about producing an answer; it is about improving outcomes, whether on individual transactions, across investment processes, or in the everyday allocation of time, attention, and judgment. That broader perspective is central to how we approach our courses and trainings.

If you have made it this far, I hope you too will take up the hallowed mantle of learning how to say no.