I understand that analysts do most of the grunt work and spend most of their time crunching numbers. I also know that IBD is not a meritocracy at the junior level. However, if an analyst were to be very good at understanding the business world and the industry they work in (near VP level of knowledge...or at least more than a B-school associate), what would be the benefit? Would the analyst get associate level responsibilities and be able to have much more of a say than other analysts, or would it all be discounted simply because he is an analyst?
You may argue that it is very unlikely for a junior-level employee to understand business and the industry in the way as someone who is more experienced. Still, imgagine someone who (determined to become a superstar) spent their college years just reading and reading about the business world (WSJ, The Deal, Dealmaker, etc.), the economy and how things link together, who the big players were and what CEOs and different fund managers were up to, read tons of books on finance and business for fun, and was very good at finance and excel, then went into banking as a first year at a BB. I understand that the theoretical does not translate into real world practices, but I feel this would come quickly for the guy.
Would someone like this be shafted into the same role as everyone else? It just doesn't seem right given the fact that he would know a lot more than a lot of his coworkers (regardless of position). What would happen in this scenario?
on the firm's culture and a few other things. There are some like Goldman that can very much be a meritocracy, while others like Citi that are a total waste of time. You also have to be at the right place at the right time, i.e. luck. I know people that had some of the characteristics you've mentioned and a horseshoe up their you-know-what that propelled them up the ranks.
Choose your IB carefully (if you are afforded that luxury given current market conditions), do all of the above (and make sure you enjoy what you do because believe it or not, people can actually tell when you're there to learn), play your cards right (make friends where you have to and don't be a jackass to ANYONE because you never know when it will come back to bite you), and you'll be fine.
I know thats a lot of variables but hey, nobody said it was going to be easy.
CPA guy what did you mean by Citi is a complete waste, I just accepted a FT offer in their IBD and wanted to get some insight from your comment, thanks.
your goal (at any level) should be to take as much off of the plate of the person above you so that they are free to take something off of the plate of the person above them. so yes, as an analyst it would be awesome if you are doing associate level jobs so the associate can do VP level jobs which ultimately trickles up to the MD allowing him to go out and generate business and not worry about what pages are in a book.
Banking is very hierarchical. With that said, I have never heard of an analyst having more power than an associate. You will not be assigning work to fellow analysts and especially associates, nor telling them what needs to be done.
However, yes, the more capable you are, the more likely it is that you will be given greater responsibility. Some groups/firms essentially require that there be an MD/VP/Associate/Analyst on a project, but this is not always the case. Regardless, as much as you may have read and think you understand, banking is something you learn most about on the job, not through the WSJ. What would help make you a star is an insatiable curiosity, sharp intellect, and the standard skills that make one a great analyst. The final key is the more intangible aspect: social skills. No one wants a nerd. At the senior level, banking is a sales job.
I understand that reading will not necessarily translate into on the job performance, but I do not see how this is detrimental in any way. If anything, I think this person would simply learn the "on the job" tasks faster than his peers. As for having curiosity, a sharp intellect, and the standard skills, I would say these are givens considering the fact that the individual learns about this stuff for fun. Finally, I do not think it is safe to assume that having good social skills and having the rest of the package as described above (intellect, drive, etc) are mutually exclusive...
I never said it was detrimental, I only said that it wouldn't give you a huge leg up. Knowing more about finance is always helpful.
No... being book-smart and being a good banker are not necessarily correlated. Maybe this person is more self-motivated and hardworking, so that might be the basis of your argument, but I'm getting the feeling that that's not the case.
No, it shows that the person has curiosity and a desire to learn. You can't make any other assumptions. My mom has been reading a ton about finance lately. Does that suddenly make her qualified to be a banker?
I never said they were. I said that IN ADDITION to the attributes I listed, it is important to have good social skills.
You seem to be convinced that you'll somehow gain some special insight into the world of finance by reading the WSJ, etc. and become a star overnight. That's absolutely not the case. I've immersed myself in finance literature pretty heavily, as did many of the other summers I interned with. Still, when we started the job we knew very little about what was expected of us and how to perform.
Finally, stop making stupid assumptions and putting words in my mouth. It's not appreciated. No one likes a smartass.
I had a 3rd year analyst during my summer analyst stint that had more power then most of the associates. Of course, he didn't get an office or associate pay, but when a VP/D/MD needed to know something about anything, they would usually bypass the associates and come straight to this guy. Keep in mind, this individual was exceptionally talented and was being primed for an associate position in the first place.
A little arrogant if you ask me... to think that just because you sat your college years out reading a bunch of financial press and reading a bunch of textbooks that you are a golden child.
"I understand that the theoretical does not translate into real world practices, but I feel this would come quickly for the guy."
There are book smarts and then there are street smarts. Deal guys always have more "street smarts"!
There comes a point where someone could actually be too intelligent and not have other valuable skills, e.g. social intelligence. Also, don't forget the power of political capital. You'd be surprised how fast someone with the right attitude and street smarts builds stronger political capital in an organization. I've seen it countless times.
Honestly, no matter how good you are, you're not going to get the senior guys to transfer the grunt work to the associate rather than you. In fact, you'll find that the more associate level responsibility you take, the worse your life gets. You see, while the whole team is working to make life easier for the person above you, there is no one there to step up and take your responsibilities when you play up. As a result, the more associate work you do, the more work you have on your plate, period. On top of that, the grunt work -must- get done, so someone has to do it. There is no one below you, so no matter how smart you are, you don't have someone to pass it off to. Sorry bud.
Also, as mentioned above, no matter how much industry knowledge you have, it really won't prepare you enough to guarantee success in this job. Most of the skills you learn are from interacting with more senior professionals and management teams. In addition, an infinite knowledge of the business landscape still doesn't build crucial skills such as attention to detail and knowing how the process works. Make sure you enter this job with the appropriate mindset otherwise you'll be in for quite a shock.
~~~~~~~~~~~ CompBanker
Seriously, you read a bunch of books etc and magically think this will make it so you don't have to do grunt work?
That level of "knowledge" is had by basically every Wharton undergrad, and every top tier analyst within a few months of starting.
Yes, analysts who perform and have a better knowledge base are given more responsibility. Star analysts may be given roles of responsibility over other analysts, especially in their second and third years. However, very rarely if ever will they be put above an associate, unless the associate is a summer, or straight off the b-school boat. Even then, the analyst should tread carefully because after a seasoning period they will be back to reporting to the associate.
I have known plenty of retarded associates, VPs, and even MDs in my day that I have had to report to. That doesn't change your job, function, or place in the scheme of things. I agree with CompBanker, you need to get your head in the right place, work hard, and you will be rewarded, but that sense of entitlement is going to get you in a lot of trouble.
Just out of curiosity what happens when an MBA associate comes in and you are a 3rd year analyst, are you assumed to be on an even level? I just really can't imagine that they would have the authority to boss around somebody with 2 years more banking experience than them.
It's called teamwork.
If you immediately come in with an uber ego making demands, and shifting an attitude around to those around you, you will quickly learn the hard way.
On the otherhand if you walk in the door with the attitude that you'll do what it takes to make the team look good, then it's not about a first year MBA associate over a 3rd year analyst etc., it's about the TEAM. Titles are best left at the door.
Does this not make sense to you? If not, I guarantee you will be miserable.
Remember, all things have a way of sorting themselves out in time. Don't sweat the small stuff.
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