When Mark Zuckerberg turned up to Facebook’s IPO dressed in no more than his signature hoodie, Wall Street investors were decidedly unimpressed. ‘He’s got to show them the respect they deserve because he’s asking for their money’, sniped one irritated analyst. Even as he defended Zuckerberg’s behaviour, Business Insider’s Henry Blodget admitted that he was probably ‘the first man in history to ask for that much money ($5-$10 billion) while wearing a hoodie’.
Naturally, Silicon Valley were quick to respond to this perceived slight. As Aaron Levie, CEO of Box quipped; ‘after Facebook hit $1B in profits, you’d think investors would start demanding Zuck wear a hoodie’. Somewhat less elegantly, angel investor Dave McClure commented that; ‘Zuck could wear his tighty-fucking-whities to work and as long as he keeps delivering I’ll take him over some lying sack of shit trying to pull a fast one on me by wearing a nice-looking suit’.
The debate around Zuckerberg’s decision to wear a hoodie seems indicative of the battle between Wall Street and Silicon Valley. It is creative versus corporate, orthodox versus nonconformist, Steve Jobs’ turtleneck versus Gordon Gekko’s braces and contrast cuffs. Yet, even in the historically conservative world of finance, where not wearing a suit and tie was once considered tantamount to treason, there are signs of a sea-change. Ever since Barclays Bank first moved into its new headquarters in London’s Canary Wharf, ‘business casual’ has been permitted five days a week. At my own employer, Fidelity International, it is unusual to see any employee don a tie outside of meetings with clients. Even JP Morgan, once a bastion of tradition, has become a veritable trailblazer in the march towards informality. The campaign against the humble necktie has been even more vitriolic, with big players such as Google, Amazon, Apple and Ikea banning them outright.
“It is creative versus corporate, orthodox versus nonconformist, Steve Jobs’ turtleneck versus Gordon Gekko’s braces and contrast cuffs”
We seem to have entered an age where it has become extremely fashionable to view business formal wear with distaste. An afternoon’s stroll round the City of London has shown that whilst the suit may be clinging on in the heart of Europe’s financial centre, the tie is certainly on its last legs. Outside certain circles, the tie seems to appear either the preserve of the City’s ‘Old Guard’ or the go-to showpiece for panicky, self-conscious graduates, desperately attempting to seem ‘grown up’. For some prominent figures, the suit and tie have become a symbol of all they believe to be wrong and archaic in the world of business. Richard Branson, billionaire CEO of Virgin, refers to ties as ‘nooses’, and has publicly admitted to often carrying round a pair of scissors for the express purpose of cutting other people’s ties off. Peter Thiel, co-founder of PayPal, has gone as far as to say that he will ‘never invest in a tech CEO that wears a suit’. Notably, Mark Cuban – a celebrated businessman and owner of the Dallas Mavericks – launched his own vicious broadside on the beleaguered suit:
‘Exactly what purpose does a suit serve?’ he demands. ‘Why in the world are so many people required to wear a suit to work? Do the clothes make the man or woman in the western world today? Does wearing a tie make us work harder or smarter?’
Does wearing a tie make us work harder or smarter? Well, if you trust the evidence, yes it does.
In a fascinating study, Michael W. Kraus, an assistant professor of organisational behaviour at the Yale School of Management, proved that a business suit not only improved performance in ‘high stakes’ competitive tasks, but actually increased the ‘dominance’ of the man wearing it. This experiment saw 128 men take part in a mock negotiation over the sale of an imaginary factory, with the express aim of discovering whether the way the participants were dressed would affect the outcome. In each scenario, the ‘buyer’ was dressed in one of three ways. One group was dressed in ‘high status’ clothing, in the form of business suits and smart shoes. A second, ‘low status’ group wore tracksuit bottoms, plastic sandals and a white t-shirt. Last of all, a third group was dressed in ‘neutral’ clothing that basically consisted of whatever it was they turned up in. The ‘seller’, with whom the buyer was negotiating, wore neutral clothes every time.
To kick off the negotiations, each party was told the ‘fair value’ for the hypothetical factory, as well as other various pieces of information that could make a difference to their bid/ask prices. Interestingly, those wearing the suits were far more reluctant to back down than those wearing ‘low status’ or ‘neutral clothing’. In fact, the ‘suits’ moved an average of just $830,000 from their initial offer, compared to $1.58 million for the ‘neutrals’, and a whopping $2.81 million for those in tracksuits. Clearly, the way the participants were dressed had an enormous impact on how shrewdly they negotiated – but why?
Well, much of it seems to boil down to how wearing a suit makes us feel. In the modern world, suits are still regarded as ‘high status’ clothing, inherently connected with statesmen, business executives and other so-called pillars of authority. When we don the trappings of these figures, we subconsciously emulate the behaviours we associate with them. This, in turn, effects how others perceive and respond to us. Whilst it might be a blow to the ego to concede that we’re basically just children playing dress-up, a variety of studies have shown this phenomenon to be true. Notably, Adam Galinsky found that when a subject wore a white coat that they believed belonged to a doctor, they became more attentive than usual. If, on the other hand, they believed the coat to belong to a painter, this effect wasn’t replicated.
So powerful is the effect of simply donning a suit that it changes the way we think. In a 2015 study, researchers discovered that wearing formal clothing makes people think ‘broadly and holistically’, rather than getting bogged down in minute details. In short, those in suits deployed the sort of thinking that a senior executive might deploy. As one might imagine, the skills bestowed by a suit upon its wearer are ultimately reflected in their salary, with experts estimating that men who wear ties five days a week are more than 3x as likely to earn in excess of $200,000 a year, compared to those who wear ties less than twice a week. Strangest and most pleasing of all, it appears that the effect of wearing a suit remains consistent, whether you wear one every day or merely at every wedding.
‘Men who wear ties five days a week are more than 3x as likely to earn in excess of $200,000 a year, compared to those who wear ties less than twice a week’
Of course, as Zuckerberg has proven, it is possible to climb to the pinnacle of the business world without ever wearing anything more formal than a hoodie, but these men (and women) are the exception, not the rule. As casual attire becomes increasingly common in the workplace, the formality of a suit and tie is becoming more and more noticeable. Far from diminishing its reputation as the epitome of ‘high status’ clothing, the psychological effect of the business suit is only likely to be amplified by its demise.
All the same, if you do opt for a tie, remember to keep an eye out for Branson and his scissors.
By Callum Woodcock (@CDWoodcock)
IMAGE: Inspiring Potentials