How did investment banking culture end up this way?

In general, I've always blindly accepted investment banking culture. The rules, the interview process, the face time, the mistreatment of younger employees. It never really bothered me...

That said, I am currently reading a fantastic book called "In the Plex: How Google Thinks, Works, and Shapes Our Lives" by Steven Levy. If you read this book, you will find out that Google has a similar elite culture associated with its workforce. Google only hires individuals from top schools with outstanding GPAs. As well, Google is notorious for extremely difficult interview questions. The company brags that it hires the best of the best... does that sound familiar?

So I ask the following question: is it possible that the financial services industry hasn't been as successful or innovative this past decade because banks hire top talent but subsequently force these bright, energetic, creative, ambitious individuals to focus on face time, dry-cleaned suits, and overpriced ties instead of actually maximizing their full potential?

More of the original post at end of post.

Investment Banking Culture

Investment Banking is known for its grueling hours, sharp dress code, and high-stress environment. It is the accepted culture throughout the industry. Where did this come from and does it need to be this way?

  • Money: The most obvious motivator of this culture is the potential earning opportunities. Industry players wear expensive suits because they can. There’s money to be made and for the most part, it is why they are here. It is also why they make the sacrifices to their social lives, and sometimes health. There’s a prestige working in finance.
  • Client Facing: Investment banking jobs are, in a lot of ways, sales job. It requires putting your best foot forward. A lot of the roles on Wall Street involve meeting directly with clients and convincing them to do business with them. This is a big difference when comparing to Google employees who are largely in front of a computer and never speak to, let alone meet with, clients.
  • Dressing For The Job: To build upon the above element regarding the culture of Wall Street, for better or worse, there is an image employees in finance are expected to maintain. They are dealing with people’s money. Sometimes their life’s savings and huge sums. They need to look the part. It’s part of what instils confidence in clients.

User @WSRenaissanceMan shares his perspective:

IB is a sales job in the end. These software developers you speak of, never see a client. And they can thank Steve Jobs for the laid back attitude of Silicon Valley. Analyst/Associate Bankers are being prepped to land deals with CEOs and CFOs once they are VP/Director/MDs.

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Original Post Continued: But as you keep reading, you'll notice a drastic difference between Google and the investment banks. Google is proud to let employees dress any way they please. Employees are given every creature comfort imaginable including free food (with an in-house chief), massive gym and yoga center, etc. You even have access to a free car if you need to run an errand and butler service in case you prefer that someone else run your errand for you! The list of perks is endless.

Google also implemented a rule where employees can spend one day per week working on a "fun side project" of their choice. Believe it or not, Google News was created via one of these side projects! The employee can pick any project he wants without requiring approval from his managers.

Lastly, employees are trusted and treated with respect at a very young age. Believe it or not, the product manager overseeing the launch of GMAIL was just 22 at the time! Can you imagine being in charge of the most successful email program of all time at the age of 22?

Suffice it to say that Google's stock price has significantly outperformed just about any index or stock in North America (please don't be a smart *$#* and write a comment below about the one or two companies that you found which outperformed Google since 2004...).

 
hot1590:
What kind of creativity can banking analysts bring forth? Maybe a new application like Excel but exclusive for banking. Or a chemical formula for colon that instantly attracts all the CEO's.

The problem: exhibit B

 

lol, I'm pretty sure that google employees don't have a one track mind trying to get rich and burning out while tryin g. the google employees might actually like their jobs despite the $$$$$

 

Why do you think Google's culture would fit or succeed in finance? Finance is built on a hierarchy and every emperor needs an army of really smart, hard working peons to help sustain their empire. You become the emperor by killing other emperors.

Google may be looking for entrepreneurs and outside the box thinkers, investment banking is looking for the best highest paid corporate slave one could buy or mold.

 

Obviously you asked about IB but looking at finance more generally, some of the top prop shops have cultures similar to this...although you probably aren't going to get a butler service anytime soon.

 

IB's are full of high functioning sociopaths; what would you expect from a culture that promotes them over all others? Besides, google actually likes their employees, and their employees arent expected to fit in the same sort of mold that IBers are.

“...all truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.” - Schopenhauer
 

IB is a sales job in the end. These software developers you speak of, never see a client. And they can thank Steve Jobs for the laid back attitude of Sillicon Valley. Analyst/Associate Bankers are being prepped to land deals with CEOs and CFOs once they are VP/Director/MDs.

BTW I love my $1,000+ suits! And if you don't like face time, feel free to find a back office job and die lonely and poor in your cubicle.

Make opportunities. Not excuses.
 
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