Mentoring helps to soften blow of the axe
Having an influential mentor can not only propel a banker up the ranks, but also provide invaluable protection when redundancies are on the cards. Picking the right mentor is the key. Investment banks may employ tens of thousands of people, but relatively few have any influence.
Hank Paulson, chairman and chief executive of Goldman Sachs, admitted as much last year when he reflected that 80% of the value at the bank was created by 15% to 20% of the people. If you want to stay ahead in banking, it helps to have one of that group on your side.
Successful bankers back this claim. Rama Ayman, head of corporate finance at Arcelor, the European steel company, and a former director in corporate finance at BNP Paribas, counts Olivier Barbaroux, former chief operating officer at the French bank, as a one-time mentor.
Eva Lindholm, a managing director in the government institutions group at JP Morgan, said her career benefited from the intervention of a member of the bank's executive committee. Joe Biernat, a director at fund manager European Credit Management and a former global head of credit research at BNP Paribas, had a mentor who helped him.
Ayman, Lindholm and Biernat were among 25 bankers, fund managers and headhunters who participated in the career path study by Shiva Dustdar, an MBA student at London Business School. Dustdar, who works at the European Investment Bank, found that the careers of more than half her subjects had been shaped by "significant other people".
Banks like Goldman Sachs and Morgan Stanley run mentor programmes for junior staff. However, Dustdar's significant others were not officially sanctioned. "None of the people I spoke to were talking about formal mentors. It was always an informal thing," she said.
In many cases, they were taken under the wing of a high-flying boss. Jean Facon, a headhunter at Christopher Beale Associates and former member of the European management committee at JP Morgan, said two former bosses at the bank looked out for him: "They were the people I went to if my team got shut down, or to make sure I was paid properly at the end of the year. I didn't realise they were my mentors at the time: it's only in retrospect I realise what they did for me."
When redundancies are in the air, a high-ranking guardian is particularly helpful. Mehmet Dalman, former head of investment banking at Commerzbank, invited former colleagues to join his new hedge fund venture, enabling them to remain in work despite the 490 investment banking job cuts announced by the bank after he left.
Facon said his influential advocates at JP Morgan helped find him a way out of the potentially disastrous role as head of the Moscow office during the Russian crisis of 1998. He went on to restructure the Zurich office.
Lindholm said it is particularly important to have someone championing your cause during a downturn: "If a firm is going through a downsizing exercise and no one really knows about you or the standard of work you perform, they will have a hard time trying to assess the value of your contribution."
However, just as other significant people can enhance career prospects, the intervention of a senior colleague can stifle progress. Nearly a quarter of Dustdar's interviewees said their careers had been adversely affected by other people. Self-absorbed, self-centred bosses were the main culprits.
One interviewee described a personality clash with a manager who tried to have him fired: "She did everything she could to get rid of me but one of my mentors stepped in and arranged for me to move elsewhere."
When redundancies are threatened, it also helps to have broad experience, rather than being a specialist. Lindholm said: "I worked in debt capital markets, asset management and emerging markets before moving into investment banking coverage.
"While you can do extremely well by specialising in a particular field, like derivatives, you may be more vulnerable to job loss if business in that area turns down."
Ayman attributes his avoidance of redundancy not only to benevolent mentors, but also to being willing to change his role to suit the markets' mood. He shifted from emerging markets into oil and gas after the Russian crisis, moving to Arcelor in 2001 to spend more time with his family.
He said bankers who are not proactive risk career derailment: "You need to be alert, not only to what is happening in your own organisation, but also to your own area or sector. If your sector is on a diminishing trend, you need to position yourself proactively to avoid it."
