Rudolf Wötzel, the former head of M&A for German speaking countries at Lehman Brothers, worked in investment banking for over 20 years, holding senior positions at UBS and Deutsche before retiring to run a lodge in the Swiss Alps in 2007. During his time in the industry, he’s managed countless summer interns, and seen many drop out before the end of the programme due to mental and physical exhaustion.
A combination of personal insecurity and industry expectations drive interns to push themselves to unreasonable excess, he says. The workload for interns often doesn’t justify these punishing hours, and it’s also counterproductive. In the wake of Moritz Erhardt’s death whilst interning at Bank of America Merrill Lynch, he offers his opinions on what needs to change about investment banks’ summer programmes.
In the investment banking division, it depends a lot on the nature of the task and the individual’s responsibilities. On an ordinary day, an intern can expect a reasonably controlled workflow. But that is generally when they are working on less exciting projects. If the intern is working on a big project, they can be expected to work 80 hours a week and longer – and permanently on-call. They are treated as another member of the team. Working on a live deal is both fascinating and high pressured, and it requires ruthless self-sacrifice – all of which can be an explosive cocktail.
I recommend young interns take a different approach: How long do I want to and can I work in investment banking and where are my limits – taking into account that your working hours can always be arbitrarily extended?
I have seen interns unable to withstand high levels of stress and leave the internship programme prematurely, due to a mixture of mental and physical exhaustion. Thank God, I’ve never had an intern hospitalised or suffer long-term damage. People who are particularly at risk are those with low self-esteem, fierce professional ambition and a strong desire for recognition. They define themselves by what other people think of them. Robust, self-sufficient types who have a healthy self-protection reflex are less at risk. Although, they are also less likely to pursue a career in investment banking.
Working through the night means there is a huge loss in productivity the next day. To this end, all-nighters are ineffectual and pointless – and only justifiable when a deal takes an unexpected turn - with the corresponding ad hoc work that involves. In my experience, 9 out of 10 all-nighters are unnecessary on closer inspection and a result of poor planning and, ultimately, a contempt for HR on the part of a project manager. Unfortunately ‘juniors’ cultivate the idea that they are being heroic and are proud of pulling all-nighters and working excessively.
Most project managers are excellent M&A specialists, but they are poor leaders and aren’t sensitive to the needs of their human capital. Given the permanent staffing shortage, interns are unfortunately often viewed as cheap labour for difficult front office work. It’s important that managers are trained in leadership and project management skills. It’s also important that the ‘objectives’ used to assess executives are changed – so, the basis for bonuses, salary and promotion. Do they wear out the junior members of staff? Do they show empathy and interest in the personal development of their team members? Does an intern want to stay at the company and, if not, why not?
Management consultancies use sophisticated mentoring schemes to support juniors and trainees - it would make sense for these models to be used in investment banking. It’s important that managers actively assume the role of mentor to the junior members of staff.
Finally, managers should be expected to have a duty of care for the employees entrusted to them – and that should include sanctions for any violation of this duty.