Applying 80/20 in investment banking
So, I just finished the 80/20 book, which got me thinking… how can I apply 80/20 thinking in my IB career ?
A lot of the work comes down to attention to detail and there are some quality standards you just can’t cut, however surely there are best practices to become more efficient. I want to become better while freeing more time to go to the gym, socialize, and engage in other ventures.
I am Associate 2 and A2A. As I see it, most of my value add within the firm comes down to:
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Training and integrating analysts into the firm
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Guiding analysts and reviewing their work
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Creating materials for clients (whether setting a detailed outline or creating pages / running XLS work myself)
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Being the bridge between seniors and the analysts
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Transcribing vague ideas from seniors into presentable analyses and presentations
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Leading client calls
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Leading processes
How can I be most productive ? How can I increase my output quality while working less ?
Similarly, what activities should I delete in the workplace, anything value destructive that I should avoid altogether?
For now, the things that I found increased quality as an associate are 1) putting pressure on analysts with regards to deadlines as they are always late 2) being proactive with regards to planning and processes and the ) engaging more often with analysts so we have quicker feedback loops and can course correct and manage their time better. Most of these don’t save much time though.
Ah, the classic 80/20 rule, also known as the Pareto Principle! It's like finding the golden bananas in the jungle of your workload. Here's how you can swing through the vines of investment banking more efficiently:
Prioritize Tasks: Identify which tasks yield the most significant results. For instance, focus on the parts of client materials that truly drive decisions. Not all pages in a pitch book are created equal.
Streamline Communication: Be the bridge, but don't be the bottleneck. Ensure clear, concise communication between seniors and analysts to minimize back-and-forth.
Delegate Effectively: Train your analysts well so they can take on more complex tasks. This will free up your time and increase overall team productivity.
Optimize Meetings and Calls: Lead client calls and processes with an agenda and a clear goal. Time spent in directionless meetings is often unproductive.
Automate and Standardize: Use templates and tools for recurring tasks like financial models and presentations. This can drastically reduce the time spent on creating materials.
Set Clear Deadlines: Continue to enforce deadlines. It keeps the team on track and can prevent last-minute rushes.
Eliminate Low-Value Activities: Cut out or reduce time spent on activities that don't contribute to your main goals. This might include excessive double-checking of work that's already been reviewed or attending non-essential meetings.
Feedback Loops: Keep engaging with your analysts frequently. This helps in quick course corrections and better time management.
To increase output quality while working less, consider the following:
Focus on High-Impact Work: Spend more time on activities that directly contribute to deal success or client satisfaction.
Quality Control: Implement a system where work is checked at critical stages, preventing errors from snowballing and saving time in the long run.
Professional Development: Invest time in improving your own and your team's skills, like financial modeling or presentation skills, which can increase efficiency.
Well-being: Don't forget to take care of yourself. A healthy work-life balance can improve focus and productivity during work hours.
Remember, it's not just about working harder, but smarter. By applying the 80/20 rule, you can potentially create more value in less time, leaving room for the gym, socializing, and other ventures. Keep swinging, champ!
Sources: Advice from an ex-IB MD: The Habits of Winners, Advice from an ex-IB MD: The Habits of Winners, Reflecting on my Investment Banking Experience: Lessons Learned, How To Quit Your Job (And Still Win), How To Quit Your Job (And Still Win)
Bump
you answered your own question. training analysts should be your focus. and you should resist the temptation of doing analysts' work because it's "faster" for you to do it and you have more control over the quality to do it (common temptation for associates). It'll pay dividends in the long run once analysts get ramped up and fully trained to take more workload off of you. Their quality / speed of work would also increase so you can spend less time worrying / checking.
you're right attention to detail on everything is important. ideally a book / model is spotless. however, the most important thing is checking the facts / analysis / numbers that support the core message to the clients. For example, if message of a comps page is that client should be valued at 10x EV/EBITDA (and that's the dominate valuation metric in the industry), then I'd make sure I check EV and EBITDAs of the comps, but I would not worry too much about whether all the P/Es are right if I don't have time.
I do think 20/80 rule applies to lots of places on the job. and it's something you'd get a sense of over time (may be different than what i had above).
You’re right on the first point. When I just made associate I had no trust in analysts and did all the AN work and my life was miserable. Now I still absolutely can’t forward anything without significant check when working with AN 1-2, but have a lot more leverage
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