Politics in IB is Hurting Us -- And Corrupting the One Real Principle We Had...

            I decided to get into finance for a few reasons: (i) money, (ii) transferrable skills, (iii) smart, driven people who avoided bullshit like the plague, (iv) I didn’t want to get into politics (read: maximum bullshit, no money, well, unless you sell paintings on the side). All in all, I thought it would be the closest thing I’d find to a meritocracy in non-athletic professional life, and that I could bust my balls and make a few million dollars in exchange for some grey hair, probably an alcohol problem and a graveyard of busted-up relationships. Then I could sit in a nice big house on a bay somewhere, pay for everything my kids would ever need, etc. etc. etc., you’ve heard it before.

            I’m going to leave my internship recruiting experience aside, because I don’t think it really has much to offer, it was as plain vanilla as they come, and I ended up at a decent bank on a great desk with some great people. It was a good outcome for me and turned out to be a great place for me to cut my teeth.

            As time went on, though, it became abundantly clear to me that high-fuh-nannce was as much a self-aggrandizing political contest as any other industry. Maybe I shouldn’t have been surprised, and I wasn’t by the sorts of climbing, soulless characters I ran into — I did some of that myself, who doesn’t during comp time? What got me was when politics came into the office. Isn’t that the first piece of advice everyone gets? “Work hard and don’t talk politics with your co-workers.” I might be hyperbolizing, but you get the point.

            The first thing that really struck me was on a call with HR, discussing resumes for the internship recruiting efforts. We’re talking through procedure and timelines, and then the HR rep says something to the tune of, “Oh, and make sure when you look at these resumes you read to see if the candidate is black.” We’ve all reviewed hundreds if not thousands of resumes, and I’ve never seen someone drop in a bullet to describe their skin color. I found that alarming — HR had, in no uncertain terms, just told us to make racial assumptions and treat those candidates differently, without any confirmation or non-speculative evidence to do so. So, I asked the rep to elaborate, and mentioned that I personally didn’t have any training to be able to identify someone’s race from resume-style information. The response was, in essence, “when you know, you know”…the rep wanted us to look at names and activities and conclude whether candidates were black.

            As time went on, I ended up playing a prominent role in the bank’s undergrad recruiting program. Then the quotas started, then they became the objective, then they became the only thing anyone in management cared about at all, well that and making sure their golf buddies’ kids received offer letters. I found the whole thing disorienting — this is a bank, shouldn’t we be recruiting for the candidates who are going to do the best job? I always tried to take that approach, and it usually ended up with a very evenly balanced group of top performers. Go through all the resumes, interview as many people as possible, select the most motivated and intelligent kids, full stop. Seems simple enough to me. And don’t get me wrong, we should have in place guardrails to make sure all resumes are getting the right attention in review, and that candidates all get a fair shot. My honest, and I think very well informed, opinion is that as quotas for arbitrary ‘diversity’ buckets became the goal, rather than a sanity check, the quality of the intern classes on the whole declined noticeably. (The buckets are very odd, excluding certain nationalities / provenances from otherwise broad descriptors — it’s strange to me that a poor kid from Taiwan or India, or Louisiana or Oklahoma is considered as equally ‘non-diverse’ as trust fund Chad with his diplomas from Choate and Harvard, which is exactly how it’s done, by the way.) To appease the higher-ups and make sure we got all our offers out, we sent dozens of highly-qualified candidates packing over the years simply because the bucket for ‘non-diverse’ candidates was somewhere in the neighborhood of 25% of the class, and they did not get a fair shot. I gave them the shots. And they were not fair.

            The most disturbing instance of these bankrupt policies in action really shattered any illusions I had about the industry. One year, there was a particular intern who was very obviously lagging behind the rest of the class, which was noted throughout the summer. When the time came for full time offers, we were, per standard operating procedure, asked to submit our ranking of our interns and reviews / offer recommendations. The aforementioned intern was last, no question. HR came back and asked us to re-rank only the male interns. The implication was clear — make a cut. The intern who had underperformed all summer and probably shouldn’t have gotten a return at all, was going to get a full time offer for one very simple reason — she was a female. The other intern who did very well and genuinely deserved the offer just lost his job because of a quota.

            He wasn’t my favorite, but I was outraged. Everyone just stood by and let this poor kid who just busted his ass get cut down to give a spot to someone who frankly did not care, if work product was any judge of whether they wanted to be in banking. What’s worse is that our staffer (VP-level at the time) coerced me and others on a call with all the analysts and associates to revise comments and concerns that had been raised regarding this intern’s underperformance both on an objective scale and in respect to her peers. I raised a stink in a public but respectful way, asking about the status of getting the intern we had just hung out to dry an offer, asking how this could have happened, when our rankings were so clear, etc. The staffer called me up and told me he understood why I would feel guilty, that it wasn’t my fault; he thought that my reaction was because the kid who got cut was my favorite intern, which he wasn’t. In fact, I was pissed, and I mean pissed, because the one thing I could’ve done to stop that fiasco from happening was to not have changed my honest and objective assessment of the other intern’s performance. But, instead, I was a good little sheep and I put down some meaningless fluff, because my staffer had just issued a public denouncement of any bad feedback, during which he never questioned the accuracy or objectivity of said feedback (it was painfully obvious), for that particular intern and told us that it would reflect poorly on the authors.

            I’m honestly not sure if it would have mattered, but man did it feel dirty as hell. And I felt like a coward. The good news is, after a lot of hell raising and prodding from a number of people (staffer included, credit where it's due), the kid did get the offer that was rightfully his. So, maybe there is hope after all.

            This was far shorter in my head, and I didn’t want to get into that last anecdote because it still gets me angrier than hell to think about. But, I hope that by saying this stuff out loud, and I know a lot of people are thinking the same thing, we can work back toward judging people based on their merits. And hell yeah that includes overcoming adversity. That makes strongest people, in my opinion. What I think is wrong is baking overt, institutionalized, and arbitrary racial, social, and national prejudice into our daily calculations. Usually, once powerful institutions start down that path, things end up in a very, very bad place.

            At the end of the day, when we start recruiting, hiring, and promoting people for the wrong reasons, you don’t end up with some utopic workplace, you end up with doubts, bitterness, factions, and, oh, by the way, a less efficient, less effective workforce, because you recruited for box checking, not competence and the right motives. And when you make an honest recruiting effort, there’s no doubt in my mind that you’re going to find that the most competent people don’t look very similar to each other at all. I don’t think I need to say this, but, if you think certain groups don’t produce the same level of competence as others, and therefore need to be handicapped, you’ve got some soul searching to do buddy.

            We don’t need to read race or creed into someone’s resume. Smart candidates will tell you exactly why they’re worth the offer, and tell you how they’ve gotten where they are. I’ve heard plenty of stories about really tough circumstances from students who are ‘non-diverse’ too.

I’d like to think that pretty much everyone on this forum just wants to work with smart, driven, and decent people, and I doubt what skin color or gender or sexual preference those people have matter much to any of us. I certainly don’t. What I do care about, however, is when people get preferential or punitive treatment for some arbitrary quality — any arbitrary quality — in what is supposed to be a meritocracy. It’s a far more dangerous precedent to set than a lot of people realize, and that kind of institutional behavior, which takes place everywhere on Wall Street, should be abhorred by everyone involved. We don’t need militant diversity; we need better programs to make sure every single candidate gets a fair shot. What we need is for people to hold true to the one very simple principle that drives the entire financial industry — whoever does x the best, wins.

P.S.      Since I haven’t offered any solutions in earnest, a quick blurb on some things I’ve done with candidates who I thought weren’t getting a fair shot, but were smart, and for one reason or another had missed something along the way. I’m not one for making excuses, especially when pretty much everything you need to do decently well in an interview is a few google searches away.

Send people who don’t have the interview guides the PDF’s. Send them to this forum and others. Give them a week. Interview them again. Now I’ve found that many of the candidates I’ve had to have those kinds of conversations with don’t do very well even if I tell them which questions they’re going to be asked or if I let them choose their own technical questions to answer. But I gave them the shot, took time out of my day to do it, and I’m glad I did. I’m still in touch with some of them, and they’ve eventually found jobs in the industry. Others capitalized on the opportunity and crushed their interviews, simply because they got onto level footing and did the work. Keep in mind, the kids who succeeded in this case were those who took the initiative, got in touch very early on, and cared enough to keep asking questions. My point is that, yes, if we grill 19 year-olds on DCF’s and unlevering beta, some people are going to need to be assessed on a different scale. Then we find ourselves trying to engineer outcomes, instead of making a better system. Things won't change for the better that way.