After my Q&A I promised to write down some thoughts on office politics, since that was probably the topic that got the most interest from the WSO community. But then I realized that, although I consider myself fairly decent at surviving the IB/PE political environment, I didn’t have an actual framework in mind. In other words, when you present me with a situation it’s fairly obvious to me what the next step should be, but coming up with a general set of rules is much more challenging. So I’ve spent a lot of time drinking and thinking about this topic over the last few months. These are my preliminary conclusions, and they will probably come over the course of multiple posts over the next few months. I hope someone on here finds them somewhat useful.
With that, let’s jump into it. I will try to keep this as short as possible, and can elaborate in the comments section.
The Formula for Success: Work Ethic and Political Moments
Why do office politics matter? Simply put, we all know someone who got a promotion without deserving it, and we all know someone who “deserved it” and got screwed. When we talk about “merit” in finance, what we really mean is “work ethic” – i.e. showing up on time and doing all of the things that are expected of you, and then some. This includes everything from attention to detail to dressing the part to presenting your analysis in a well thought out way.
However, work ethic is not enough to get you to the top. Work ethic is something you develop in school through years of hard work and practice, then refine and improve early on in your career. It is a continuous process – like a long movie, it is the totality of the frames that matter, and you cannot point to a single moment of “hard work” as being especially meaningful. In other words, the grind is constant, it never ends, and it’s either a part of you or it’s not (in which case stop reading and go fix that before you go any further).
Politics is a different beast, because it happens in “moments”, not movies. Office politics is like the movie poster or trailer advertising the full feature film – arguably much less important than the substance of your work, but mess it up and no one will show up to watch the film. So after a month-long project with many all-nighters and a fantastic work product to show for it, you will likely end up sending it off or presenting it to someone. The way you go about doing this will color how people see your work – these moments of human interaction can and will either create or destroy your political capital / goodwill in the office.
So, work ethic is crucial, but mess up the politics hard enough and your hard work is worth nothing. Politics alone won’t get you there either. Which brings me to my formula for success:
Success = Work Ethic * Political Capital
Yes, it’s oversimplified but think about it. How are reviews done in banking? The MD’s and VP’s hold a conference call and go through all the names. If a senior likes someone, they will “go to bat” for them. If a person is not well liked, no one will want to spend their own political capital to help that person out. Of course, this only matters if the person’s work ethic was actually decent. But since we are conditioned from day 1 that work ethic is all that matters, too many of us tend to screw up the political capital side of the equation, which turns out to be just as important.
So if you think you are smart and good at your job, but things are not going your way, then chances are you need to work on your political game. How exactly to do that will be the subject of future posts, but for now I will leave you with what I believe are the various characteristics of work ethic and political capital. We need to understand how these concepts work before we identify where our shortcomings are and how to fix them.
Work Ethic is:
* Objective (you got it or you don’t)
* A constant grind
* Difficult to change
Political Capital is:
* Subjective (you know it when you see it)
* Made up of “moments”
* Very fluid (a political situation can change quickly)
In essence, work ethic and political capital are like Yin and Yang – inseparable and contradictory opposites. So to better understand political capital, let’s break explore what the opposite of work ethic would be. We value work ethic in banking because it is supposed to be “fair” – i.e., it’s about how hard you work and how good your work is, and not about whose ass you’ve kissed or whose son you are or who happens to like you.
You see? We like work ethic because it’s about your work, not about who likes you.
Political capital is all about who likes you
And that’s my biggest secret, my biggest piece of advice to any young monkey who struggles with this concept. If you already do good work, spend your energy not to learn how to build a slightly better model, but on how to make your co-workers and superiors like you more. This can feel like a soul-crushing task, because as I will explain in the next post, this can involve a lot of pretending to be someone you’re not. Pretending to like a certain person, pretending to enjoy football, acting like you really want to be at the company Christmas party, acting like a Wall Street frat bro just to fit into your group’s culture, etc. Yes, it’s soul crushing – but we always knew that. The job itself is soul crushing. We just tend to think of the hours as the soul crushing part, but I suspect for most people it’s actually the political side of the equation that causes the most heartburn. The sooner you start thinking about how all of this fits into the context of your own career, the sooner your heartburn will start to fade.
To be continued…
Mod Note (Andy): top 50 posts of 2017, this one ranks #26 (based on # of silver bananas)
Fantastic write up. Crazy how the one finance internships I've had in a small boutique will some real personalities, this would have been stellar to know.
And while I do not condone lying, it's always okay IMO to agree with others on their opinion, if it'll help you.
The political opinion issue is a perfect example of what I mean, actually. When I worked for a bunch of liberals, they were convinced I was pro universal healthcare (or at the very least I wasn't against it). I work for a bunch of conservatives now, and I've never joined in when the few liberals in the office criticize Trump. There's just no upside to being too honest, you're only going to risk having certain people like you less. That's not to say I don't mess up sometimes and talk too much (especially when the booze starts to flow), but every time I do I consciously say to myself "stop doing that shit, it's not worth it" - over time I learned to keep more and more to myself and just agree with my coworkers.
I like the analysis of political capital, especially that it is the collection of specific "moments." But I would say that it's more complex than a popularity contest, because I've seen popular guys that were good at their jobs fail to win the head boss' confidence.
What I feel would improve this, is if political capital were broken down into two parts: popularity and perceived competence. Perceived competence is related to how diligent you are, and how much everyone likes you, but also how well-spoken you are, ability to run a meeting, give presentations, etc...
Emotional Quotient so to speak.
You're right, and there are certainly many ways to frame this concept. I'll try to work this into my next post, as this one was meant to be a simple introduction and was getting too long.
I actually frame it this way: each political moment earns you political capital with that specific person. Political capital is not interchangeable between people, though. Like heat, it transfers from one person to the others closest to their circle of trust. So if you build a lot of political capital with a VP, chances are the MD will have a slightly more favorable view of you in the long run, i.e. you build a little with the MD as well. But your end goal may require you to build a lot more capital with the MD than is possible through indirect transfer (i.e. getting close to those around the MD), so that relationship is where the focus should be.
There was a great post/comment on WSO a few years back on this topic (will try to find it and link, may be in the hall of fame). It was about how when you have 3 projects in banking, you should think about which VP/MD has the most political capital in the office (the most influence over reviews, brings in the most revenue, etc) and do your best work on his/her project. You can't half ass the other two projects, but chances are you only have enough time to go the extra mile on a limited number of tasks. That post actually got me thinking about all of this back in the day.
Thanks for the feedback btw, I appreciate it.
While I agree that office politics are "moment" based and fluid, I'm not sure I consider likability to be the primary determinant of political capital.
If I were to try to pin down one factor as a primary determinant of political success I'd say it's your perceived status. If people perceive you as high status, you will get promoted, be given more responsibility, etc., regardless of how well liked you are. Perceived status is also far more important than work ethic as you rise up the ranks.
Adding my two cents. I'm still learning lots these days, but right now I report to an SVP who is making waves within my org (F500, $30 billion a year in revenue). He has taught me lots about politics, and the game that he is playing right now goes all the way to the CEO, COO, CFO.
Completely agree on work ethic. Half the battle is showing up, and straight up out-working the other guy. The majority of success in this world was achieved on the backs of men and women working late into the night. Don't listen to those gurus or other idiots preaching four hour work weeks. Whether you are working in a start-up, investment bank, F500, hospital, whatever. If you want success, you have to work harder than everyone - only then will you have what everyone doesn't have.
On the other side, I would add that political capital requires momentum and consistency. Much of the political capital that my boss has built up has been because he has been right over and over again. By building up a track record of success (your projects consistently deliver the benefits they said they would while coming under budget, you keep landing client after client, you keep hitting your sales targets, etc.) you gain credibility to push more visionary or "out-there" projects. Keep delivering on those, and pretty soon, your boss, and their bosses, start to come to you for answers. That's when you have political capital to play the game with.
Of course, the above is easier said than done. There's luck (maybe your projects just don't go right, no matter how hard you work). Maybe you piss off a particularly nasty exec / MD who just wants to end you. It happens. But this is why the hardest working or smartest don't make it to the top. It's those who work hard, are smart, AND, get lucky that get there.
I completely agree with this post and I would argue that political capital and ability to be liked is even more important than being a modeling star / working crazy hours. Promotions and bonuses in banking are given based on your expected ability to be a deal generator. It all comes to that. If the firm sees you as someone that has excellent social skills you may be getting a promotion faster and have someone under you doing the grunt work.
Guys this is even more important at a boutique.
When I was an analyst, I didn't understand / accept the concept of being political. I thought that doing an extraordinary job was enough.
2 analysts in my class were spending more time at the gym than doing work and were the classic frat bottle and models type of guys. they didn't miss any social events with partners and they made sure to entertain them with their weekend stories. They had the ability to have an opinion on pretty much every topic.
They weren't necessarily the hardest workers nor the smartest but they always got ranked at the top of our class.
During Friday drinks, I heard one of the partners being half drunk saying to these guys "you guys are going to be partner some day".
Building relationships is everything in banking and finance in general.
Its only when you are junior that political capital is about being liked. And even then, you could argue its more than that. The more senior you are, the more complex it becomes.
Politics is about understanding who has what influence to make a decision and what they care about. Ability and motivation. That is it. At the junior level, the only thing you can do to influence decision, beyond the quality of your work, is to be liked. But once you control resources in an organization then, obviously, you have other ways to build and wield political capital, beyond emotional connections.
Another benefit of being self-employed and making $50k a month from your own ad company is, you don't deal with "co-workers." No offense, but you just said everything that is wrong in this type of environment.
It's great that it worked out for you but I know dozens of people who went broke trying to start their own thing and now they are 35+ and catching up in the rat race.
I am ~30 years old and making a ton of money doing something I really enjoy. At some point I will have enough money to be able to take risks and build businesses on my own terms, while also enjoying life and not living off of microwaved ramen and tap water.
Every choice in life is a gamble to some extent. If you have the skills, confidence, resources, or if you just trust yourself to overcome all adversity when you throw yourself into the fire of entrepreneurship, then by all means go for it. I was not this confident in my abilities when I went into banking, and I had an opportunity to grind in IB and build a lot of option value (i.e. $$ in the savings account to allow me to do whatever I want in the future). The IB route was the higher expected value route for me, then PE was, and then something else until I eventually "work for myself".
You can't play it too safe in life, and if I understand you correctly too many people are scared of taking risks whereas they might actually be very successful if they just jumped out of their comfort zone. I don't disagree with that at all. It's just that I don't think there's anything wrong with hedging your bets and building skills in the rat race for a while before jumping into the shark tank.
Office Poly-Ticks (Originally Posted: 05/09/2012)
Looking to hear from the more experienced voices on this board: Are there any general guidelines for navigating office politics, especially as a 1st or 2nd year?
One of my most admired investors, Ken Fisher, describes politics thusly: “’Politics’ comes from the Greek poly, meaning tiny, and the English word “tick,” a tiny blood sucking animal. Therefore, when you have politics, you have, ‘many, tiny, blood-sucking animals.’”
It can be nerve-wrecking for a new hire to have any idea how approach office politics. Often described as the worst part of any job, and sadly a lot of other folks at work aren’t always interested in helping out the new guy/girl. Even more unfortunate is that none of us are immune from it, and Eddie Braverman’s sage signoff from NSFW (“Keep your heads low and your powder dry”) is blunt reality.
There are a ton of books out there on this, but in my experience most of the authors’ purely academic credentials simply don’t hold any water with me. I’m much more comfortable taking advice from someone who has lived the problem from both sides of the desk rather than someone who has just studied it. I hope this discussion can be helpful to the newer monkeys and those of us in our first job.
Be that as it may, here are two pieces of advice I’ve gleaned from a 30-year Wall Streeter:
Let’s help each other out here, monkeys! Any other pro tips from the rest of us?