Every year, fresh faced analysts and associates start their investment banking careers and – as unique as they believe themselves to be – most tend to fall into one of five character types once they start the job.
Am I stereotyping? Maybe. But one thing that ten years in the industry has taught me is that year after year, the same tendencies and traits inevitably emerge. A little self-awareness might help – do you see yourself in one of the characters below?
We’re not talking Enron egos here. Remember that guy from business school who ruined the curve for everyone else? Well, he followed you to the finance world.
It’s the Smartest Guy in the Room – the rarely (he’d argue, never) wrong, master of academic finance. A walking textbook, he is an undeniable asset who will quickly become the go-to guy for any technical questions that emerge. Less loved is his tendency to gleefully point out the errors in others’ work.
With a head full of theory, the Smartest Guy in the Room often has a hard time adjusting to real world finance. I’m sorry to say, but a discounted cash flow analysis is rarely an exercise of academic purity! In the real world, valuation begins with a number in a senior banker’s head. It’s up to you to make it work.
For someone who based his prior successes on the black and white elegance of text book academia, the murky grey of this reality is horrifying. The Smartest Guy in the Room has two options: bend or break.
Those who bend learn that their analytical prowess provides an amazing advantage if it can be tempered by practical realities. And when it comes to sniffing out errors and model busts in others’ work, they realise that a little tact is always appreciated.
As for those who break, they usually break hard. Pride prevails, and stubbornness makes them a liability, particularly with clients. At best, they find themselves tucked away in a corner, pulled out like a dusty reference guide when needed. It’s a dead end for career advancement.
Most newcomers in finance hit the desk ready to roll-up their sleeves and work very hard indeed. They know they must pay their dues over many years before they become a rainmaker. But a few sign on dreaming of martini lunches and golf-course negotiations. PowerPoint is for suckers. The Dealer is here to play big.
Eagerness is commendable. After all, firms are in this business to make money, and that requires clients and deal flow. And a client-focused junior has a perspective that is surprisingly rare. But it will most likely take months (or years) before even the slickest analyst is invited to join a client meeting, let alone have a speaking role.
Dealers are usually horribly frustrated to find themselves left behind in the office while the senior deal team steps out to deliver a pitch. Those who let that frustration get the better of them often quit, hoping to find a job that will provide the client access they feel they deserve. They are frequent job hoppers, but be warned - hiring managers can pick them out from a crowd.
But those who modify their outlook and stick it out are well-positioned for success. An odd reality of banking is that the day-to-day job and the accompanying skills for success change radically at each level. The superstar associate with his analytic savvy may become the managing director disaster, afraid to call on clients. But the junior who digs in, puts in the hours and turns out consistently strong work products - all the while keeping that client-focused drive – can climb the ladder quicker than most.
7am on a Monday, Noon on Sunday, New Year’s Day - no matter the time of day or the day of the week, there are some analysts and associates who never seem to leave the office.
The Face-Timer is convinced of the power of being present, and rightly so. Managers love to know that their resources are always available, as if waiting by the phone with nothing else to do but take that call.
But face-time is increasingly a double-edged sword. The most obvious problem is that someone who truly never leaves the office is on the fast track for burn out.
And with more firms implementing policies to improve the work-life balance of their junior resources (whether in good faith or simply in fear of another analyst death), the perception of face time is becoming more nuanced. More savvy managers may take a less favourable view of working at all hours – could it be a sign of inefficiency? Unless Ms. Face-Time is generating more output than her peers, maybe so.
And then there’s the social aspect. Who wants to work with someone who has no life outside of work - someone who cannot step away from the desk to have a Friday night beer with the rest of the team? Personal relationships are a critical part of career management too.
It’s a fine line to walk, yet some do it masterfully. In fact, The Face-Timer might just be tremendously astute. If she knows that her manager will arrive at 8:00am, she arrives at 7:59am. She uses technology to her advantage and remains hyper-responsive when it counts. As always, the only thing that really matters is that the work is getting done.
When Lloyd Blankfein of Goldman Sachs said that he and the firm were “doing God’s work”, he may actually have believed it, even as the rest of the world rolled its eyes.
Even from one of the most prominent CEOs in finance, calling finance “God’s work” is a stretch. For analysts and associates who are just starting out, even modest conviction is rare. Rather, True Believers usually evolve over time.
The emergence often begins as a defence mechanism – a way to justify all of those long hours, missed parties and canceled vacations. At first the money helps (as does the promise of more money for those who can persevere), but some start to question what they’ve sacrificed along the way.
Eventually, the job has to be viewed with purpose beyond a pay cheque. And those who find that purpose have healthier careers. The True Believer is more likely to be seen as a team-player and to be more personally satisfied by the job.
But the True Believer should also keep perspective, because even if no one will admit it, everyone gets the joke. It’s the promise of the next bonus check that keeps bankers coming back each morning and not some warm altruistic glow.
Everyone begins their first job in finance with at least a touch of apprehension. For some, it’s less of a touch and more of a stranglehold. They hope it will fade with time, only to watch as that apprehension grows into an all-consuming dread.
A few will mysteriously disappear, never to be seen or heard from again. But most will continue to return each day, often paralysed by their situation, staring blankly for hours at an empty spreadsheet. They’re waiting for the day of reckoning, the moment when things get so bad that they are finally let go.
How does this happen so predictably, year after year? First off, the job is difficult. The quantity and urgency of demands is unparalleled. Even those who love the job will occasionally find themselves literally pulling out their hair in frustration at 4am. For those starting out with doubts, it’s exponentially worse.
What matters is how the uncertainty, stress and dread are addressed. Inaction is not the answer. Asking for help is.
Not to be seen as a sign of weakness, asking for help as early as possible benefits everyone. A firm spends a lot of money to recruit, hire and train analysts and associates. Not surprisingly, they want everyone to succeed rather than spend more money to fill empty seats. Worst case, when someone categorically determines that they are in the wrong role, it’s in their best interest to leave as soon as possible. They can move on to pursue other career opportunities, and the firm frees up some headcount – a bit rough, but true.
For those working with someone who is in a state of panic, it’s critical to provide a helping hand when asked. There will undoubtedly come a time in everyone’s career where a little support from the team goes a long way.
Mark Franczyk is a former investment banker of ten-years. After becoming a vice president, he finally decided to leave finance, attended culinary school and became a pastry chef in New York City.