Bonus culture is corrosive, says former Citi private banking chief who now makes £3k shoes
When Richard Edgecliffe-Johnson started out in banking in the 1960s, it was a different world. Working for a small branch of Barclays, one of his duties – in Dickensian fashion – was to stoke the coal-fired boiler. In 1966, he was one of six people to be recruited on to Citi’s first ever London graduate scheme, and stayed with the bank for 34 years, eventually leading its UK private banking business with over 2,000 employees.
In 2000, he left the industry, essentially retiring but also looking for an avenue out of banking, which he thought had been “eroded” by the bonus culture that many say fuelled the 2008 financial crisis and is still hitting the headlines.
“I worked incredibly hard for the bank during my time there and still took home modest bonuses. The City used to be a very collegial place to work, but by 2000 this huge bonus culture had become very corrosive,” he tells us. “It used to be that you’d call up someone in a support function and they’d be happy to help you. By the time I left, they were continually questioning how helping me would help them get a bigger bonus. It was narrow-minded and not at all constructive.”
The culture shift was one trigger, but he also wanted a change of scene: “Banks give you permission to work yourself to death. You can get sucked into the long hours and never do anything else, but you only get one life.”
A career switch in retirement
Thrust into semi-retirement, Edgecliffe-Johnson spent a lot of his time…playing backgammon. It was through this, however, that he stumbled upon his current venture as chairman of Foster & Son and Henry Maxwell, a firm that makes bespoke shoes for those with a lot of spending power. The shoes take nine months to make, tailored to individual customers’ needs, and cost £3,000 a pair. He played backgammon with the wife of the owner at the time, who passed away and, as a former banker, Edgecliffe-Johnson was drafted in to sort out the business.
Now, he says, he’s “up to his elbows” in the business, working over 100 hours a week to ensure it reaches its full potential. A great deal of the shop’s commissions still come from City of London workers, he says, but usually they’re partners or CEOs rather than rank and file employees. Then there are the high net worth individuals and the occasional oligarch. “The U.S. is still our biggest market, followed by Japan, then the UK and then only around 2.5% of our business comes from other countries.”
As a former private banker, working with the sort of people who are able to spend £3,000 on a pair shoes comes naturally to Edgecliffe-Johnson. “They don’t really want servile bowing and excessive attention,” he says. “They want good personal service and a relationship with someone they can trust and feel comfortable with as a fellow human being. Not to be treated like an extra-terrestrial.”
Taking someone through the long process of buying an expensive pair of bespoke shoes is a long-term relationship, he says. You need to find their exact requirements, work through any bumps in the road and provide reassurance that they’re making the right decision. Much like the work of a private banker.
However, Edgcliffe-Johnson insists that he’s “consciously abandoned” a lot of the knowledge he acquired in the City. “The financial sector is geared around short-term profits, and squeezing people in the luxury shoe business will do no good what so ever. It takes five years to learn how to make these shoes, so staff turnover is low. The financial aspect is secondary to building the brand and customer trust and integrity. This is something alien to the financial sector.”