Beware the toxic and ambitious directors in investment banks
I am writing this story as a warning. A warning about what can happen when you hire the wrong person into a mid-ranking job in an investment bank. This didn't happen at Goldman Sachs (I worked for another major U.S. bank), but it's something that banks like Goldman might want to think hard about as it hires-in executive directors externally.
What happened to my team was this. We were happy and successful. We were well respected within the equities business at our Big American Bank bank and our clients loved us. Our manager was a nice and competent guy. He wasn't a managing director, but he deserved to be - and we all expected him to be promoted come the next MD promotion round. Until he hired-in the director from hell.
It happened after a member of our team resigned and went to work for a competitor. Our manager had to fill her role quickly. He started interviewing and came across a smart and talented guy who worked for a small firm. It seemed like a perfect fit on both sides.
Except it wasn't. The new guy, who joined as a director, turned out to be a player. Not just a small player, but the kind of dark prince would make Machiavelli would seem pale.
This new director came along at a time when were going through some managerial changes (again, Goldman take note). It wasn't long before we started seeing him spending more and more time with the new head of our business. He was always popping into the corner office or hanging around the new boss in the cafeteria.
None of us cared at first. We all respected our manager and this guy was part of our team. The manager was mentoring him and the new guy was bedding-in and becoming one of us. Or so we thought.
Then, after around three months, our manager was called into a meeting. He was told that even though he'd done a great job, he hadn't done enough and that he needed to be more pushy with clients along different channels to those we'd used previously. He agreed - even though he didn't, and things carried on. We continued to do well with our existing clients, but continued to be pushed to win more business from new channels. All the while, the new director kept lurking around the MDs. Eventually, our boss started to associate the two things: the new director was subtly suggesting our existing manager was weak.
This wasn't the case. We ranked highly in various surveys and had excellent client feedback. But our existing manager was all about clients and had little time for internal politics. The new director was the polar opposite.
If you've worked in banking, you know how this ends. Six months later, the MD promotion round arrived and guess who got promoted? - The poisonous ambitious director hired-in by our capable and competent manager. Guess who got overlooked? That's right.
My manager was told he had to report-in to the guy he'd hired and mentored who was now an MD. To start with he was in total shock: he could barely concentrate at work. He tried to be positive and to focus on the clients rather than the politics, but in the end he got out. He spoke to a friend who was working elsewhere who got him an interview. Within two years, he turned that business around and once again the awards, the clients and the commissions started coming his way.
Meanwhile, at the bank I was working for, business disappeared and team-members resigned. The bosses there put toxic sycophancy ahead of client service and got what they deserved. It's a story worth remembering at banks which have hired heavily and are making key promotions this year.
Julian Preissner is the pseudonym of an equities professional at a U.S. investment bank
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