Tech vs Banking Culture

Hello monkeys,

This is an article about the productivity of employees in some tech companies that are way higher than the average company.

“They get more done by 10 a.m. Thursday morning than the others do in a week, but they don’t stop working,” says Mankins.

I think that this is relatable to banking (IBD, specifically), where they work really long hours! How efficient do you monkeys think these IBankers would be as the week drags on?

An example of how this can play out is Apple and Microsoft in early 2000s, says Mankins. “It took 600 Apple engineers fewer than two years to develop, debug, and deploy iOS 10,” he says. “Contrast that with 10,000 engineers at Microsoft that took more than five years to develop, debut, and ultimately retract Vista. The difference is in the way these companies chose to construct their teams.”
Apple used all-star teams because iOS 10 was a mission critical initiative. In addition, rewards were applied to team performance; no one person on the team could receive an exceptional performance appraisal unless the entire team did. On the other hand, Microsoft used a stacked ranking where 20% of every team got an exceptional review, and compensation was entirely based on individual performance. Microsoft eventually abolished stacked ranking, says Mankins.

“For every member of the team that is not a star player, productivity declines,” he says. “If 100% of the team is star players, productivity is extremely high.”

Read an article about how bonuses are allocated in banking, and it’s still the classical, “ranking” system of analysts. And as Microsoft has proven, productivity declines for these analysts that are at the bottom tier. Any solutions thought about this, and current bankers, how do you find the current system?

“At most companies, there are spending limits and audits, and employees are tracked,” he says. “At Netflix, however, there is no expense policy. The only policy is, ‘Act in the best interest of Netflix.’ The company is telling employees, ‘We assume you are not here to rip off the company, and we’re not going to put in place processes that consume human capital, waste time, and zap energy.’ They tell employees to assume their best judgment, and they can be more productive if they’re not held back.”

Definitely not applicable in banking, especially with the cut-throat culture and how bankers focus so much on bonuses! Do you monkeys think this can be done in banks? Let’s say, “act in the best interest of Goldman Sachs”… Hell no, more like “act in the best interest of ourselves”.

It’s interesting how organizational culture really varies across industry to industry. Any thoughts?