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How to present your strategic ideas like a McKinsey consultant, James Gorman edition

How to optimize your charts for maximum leverage

How to optimize your charts for maximum leverage

The Morgan Stanley 2014 U.S. Financials Conference is on. Yesterday, James Gorman – Morgan Stanley CEO and a former senior partner in McKinsey & Co’s financial services practice, elaborated his ideas on the future strategy of the firm.  Among other things, Gorman confirmed that Morgan Stanley has been eliminating jobs in FX and rates trading and that M&A is a growth area. Less promisingly, Gorman said that Morgan Stanley plans to restrict the compensation ratio at its investment banking unit to 40% or less (it was 47% in the final quarter of 2013), suggesting Morgan Stanley’s investment bank staff might have their pay trimmed (further) in future.

As an ex-senior McKinsey man, Gorman might think that he has a few things to teach bankers about the expression of strategic ideas through the medium of the PowerPoint presentation. Some people in banking might disagree. However, if you want to present like Gorman here’s a distillation of his PowerPoint best practice.

1. Start simple

It all begins with a chart-heavy pastiche on how much Morgan Stanley has improved.

Morgan Stanley then and now

2. Leverage the emotion-chart interface

Use emotive words. Think green arrows. Green is the colour of fertility.

Morgan Stanley performance and growth

3. Speak not of redundancies 

Morgan Stanley optimizing

4. Drop in a few neologisms 

Everyone’s heard of ‘synergies’, but Gorman spoke too of ‘adjacencies.’ The FX business has ‘adjacencies’ to other institutional securities businesses, said Gorman. And the rates business has ‘strong adjacencies’ to other businesses.

These adjacencies seem to be a good thing. No one likes to see a neighbour disappear.

5. Present your strong points before your weak ones  

Morgan Stanley has some, ‘signature institutional franchises’ in investment banking (IBD) and equities, said Gorman. Both these businesses are doing rather well. Morgan Stanley’s equities business in particular has been outperforming key rivals (AKA Goldman Sachs).

Morgan Stanley growth

Morgan Stanley equities

7. Use generalizations to draw attention away from your own shortcomings 

There was a time (in 2011), when Morgan Stanley was hiring for its ‘growing’ fixed income trading business. In 2010 Gorman himself reportedly set a target for trading revenues of $26 billion, up $10bn on 2009, led by a resurgence in fixed income, currencies and commodities revenues. However, in the 12 months ending December 31st 2013 trading revenues at Morgan Stanley were a mere $9bn and Morgan Stanley has changed its mind about expanding in fixed income. The bank is now ‘optimizing’ its business, cutting risk weighted assets, and focusing on generating returns rather than revenues.

Gorman glossed over Morgan Stanley’s history of FICC strategy reversals by using a chart depicting industry-wide fixed income revenue changes, rather than anything specific to Morgan Stanley’s own business.

Morgan Stanley fixed income

8. Build to a bullet point conclusion 

Morgan Stanley summary

Related articles:

What McKinsey consultants think they can teach bankers

Some of the people said to leave FICC teams at Goldman, Barclays and Morgan Stanley last week

The new rules for succeeding in an investment bank



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