OUT OF LEHMAN: Bankers should be treated like strategy consultants

What a week! The axe is falling everywhere. Today's survivors have nothing to rejoice about - after all, they live in fear of being tomorrow's victims.

As for me, I have found a small cave to hide in and am witnessing this massacre from my temporary shelter. If the mute CNBC TV screen above my office desk is to be believed, the worst is yet to come.

The culling seems to be indiscriminate. One on hand, senior people are being fired because they are too expensive. On the other, junior people are shown the door because they won't make money any time soon. Talk about burning the cigarette from both ends.

At the height of the dotcom crisis, banks were blamed for cutting prematurely. (I remember how Lehman thumped its chest on campus for not having laid off anyone in 2001 - only seven years later it has made up for it by screwing everyone.) Are banks repeating the same mistakes again?

I don't think so. Banks need to use this opportunity to set things right. And that may mean getting rid of some of the people they've hired over the past few years, who have gone into the industry for the wrong reasons.

Banks could benefit from treating staff more like strategy consulting firms do. The two industries have a lot in common: consulting firms are extremely profitable, charge money for delivering intangible value (intellectual content), and pay their employees top money for working long hours.

Unlike strategy consulting firms, banks have made two big mistakes.

· Paying a quick buck: Consultants are paid well, but never too much, too early. MBAs flock to banking to make the quick money that will allow them to pay off their loans in no time. Similarly, analysts who join trading are lured by the prospects of making six-figure bonuses in less than four years. For many, banking is a funding machine, not a career option.

· Crash and burn: For every Dick who spends his entire career in banking, there are a hundred others who quit because they are either unable or unwilling to take the pressure. Sure, the drop-out rate in consulting is high as well, but consultants at least have the option of joining industry in a management role. The exit options for a CDS trader are pretty much limited.

The resulting occupational risk encourages a higher risk appetite. And this results in volatile returns. Instead of money, banks need to offer longer, strategy-consulting style career paths. Stability will give the traders and bankers the confidence to play the course instead of shooting for a hole-in-one.