Morning Coffee: Goldman Sachs' new treatment of its most important employees. Too late for Credit Suisse bankers to redeem their bonuses
Times are changing at Goldman Sachs' all important engineering (technology) division. New men have been hired from outside of the banking industry to take control of Goldman's 9,000 or so engineers, and they're already shaking things up.
Marco Argenti and Atte Lahtiranta were friends before they began at Goldman. They joined last month from Amazon Web Services (AWS) and Nokia, respectively. Argenti is Goldman's new co-chief information officer (alongside George Lee, a Goldman investment banker who has a long history of working with Silicon Valley) and is known for playing in a grunge band. Lahtiranta is Goldman's new chief technology officer and describes himself as a 'miracle monger.' It's a different era.
Argenti is already making himself known. Business Insider says he's asking Goldman's engineers to stop communicating their ideas in the form of PowerPoint presentations and to adopt the sorts of 'narrative memos' used at Amazon instead. Appropriately enough, Argenti has communicated this request in the form of a memo to his large team.
The Argenti art of memo writing is to start with the customer and to consider their problem or opportunity. Begin with their most important benefit, what they want and what their experience will be like. Write as crisply and precisely as possible and use simple and concrete language. Be objective, factual and humble. "Do not be afraid to talk about your failures in addition to your successes," says Argenti. "Ask yourself the hardest questions, and answer them objectively without bias."
Unlike at Amazon, Argenti isn't demanding that all communication must through memos - it's up to Goldman's technologists to ween themselves off PowerPoint presentations, but the memo preference is pretty strong. PowerPoint places too much emphasis on "charisma and presentation flair," says Argenti. Memos mean you need to get down and dirty and think through "all facets of a problem" before telling your story "without being interrupted." They should be circulated before meetings so that everyone has the facts. More guidelines are coming from Argenti soon.
It's not all about memos, although memos are certainly a big deal. Argenti also wants people to reach him on the chat app Symphony instead of via email. And Lahtiranta has said he wants a new culture in which third-party developers are made to feel like Goldman's "most valued customers" (even though Goldman is surely the customer here) so that they have a more fun time working for the firm and develop better products.
Elisha Wiesel, the outgoing CIO, who wanted to write computer games but ended up working for Goldman instead has been lightly ribbing his successor. Wiesel reportedly wrote a memo on the topic of what Argenti thinks when he reads your memo. He's also been demonstrating his own prowess with a guitar and reportedly sang and strummed at his leaving party, including songs he wrote himself - although whether they were about his time with GS engineering and his memo-writing successor is not clear.
Separately, Credit Suisse has done what Credit Suisse was always going to do, and has cut the bonus pool for its investment bankers after a terrible year. Bloomberg reports that the Swiss bank is cutting bonuses of its investment banking and capital markets division and moving capital to other areas. This comes after the division made a loss of CHF102m in the first nine months of the year and after pay per head was cut by 7% to CHF300k over the same period.
The bonus cut therefore isn't all that surprising. What's more surprising is the absence of an opportunity for CS bankers to redeem themselves. Bloomberg cites unnamed CS sources who say bonuses will be cut even if bankers there have an excellent final quarter.
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