This is why some junior bankers make MD and most don't
There are two types of juniors in banking: those who see the big picture and those who just grind it out with their noses to the screen. Guess which makes managing director (MD)? Not the second.
When I was an MD at Goldman Sachs, I saw these two types of associate all the time. You had some who were sitting there, making slide decks and scrubbing models. And you had the others who were always questioning what was happening in their sector, what their clients needed and how they could help. They wanted the context. They wanted to know where they could fit.
When they saw the big picture, they knew the battlefield. And when they knew the battlefield, they could start devising their own strategy. If you want to be a good junior banker you have to be very strategic, by building up your internal and external networks, getting in front of the right people, making sure you are focusing your time on energy on the right projects.
The most strategic associates I saw had Scenario A through D planned out with multiple contingencies. They were able to think four or five steps ahead and see how the chain of events they were kicking off would ripple through the firm. For example, they could see that a certain high revenue project is coming. Rather than leaving it to chance that they would get staffed on it, they'd hustle to make sure they were. They'd talk to the deal staffer and outline why they might be a good fit. They'd mention insights into the deal in conversations with MDs. They'd find similar deals and bring that intel back to the boss. They had the networking ecosystems that allowed them to do all this.
The best juniors also admitted their mistakes early, took feed back and learnt. They failed early, failed often and kept growing. The worst bankers were the ones that could never admit that they were imperfect. When I was at Lehman, I had an associate just like that. Full of ego, always talking about how great he was, always making mistakes cause he wasn’t willing to learn. He was smart, could see the big picture, and even be strategic, but he just couldn’t admit mistakes and learn from them. He went from working at Lehman as a VP, to being an associate at Jefferies. Backwards and downwards.
Now, strangely enough, these two qualities (big picture thinking and admitting mistakes) are also what make great entrepreneurs. This is why when young bankers tell me they want to quit banking to become an entrepreneur, I tell them it's not necessary. You can think and act like an entrepreneur in finance. The best juniors do exactly that. And this is why they get promoted up the hierarchy while the rest slowly disappear. A great junior banker is actually the perfect entrepreneur. It’s all about the same skills and mind set.
The author is a former Goldman Sachs managing director and blogger at the site What I Learnt on Wall Street.