Mod Note (Andy): #TBT Throwback Thursday - this was originally posted on 6/21/12.
At the beginning of my analyst program i had a fixed-notion of what it takes to become one of the top-ranked analysts in my class, pocket top-bucket bonus and move on to a prosperous future in finance. I wasn't alone in believing that building up great modeling skills, understanding corporate finance and mastering the three financial statements would get me there. I still think that those skills will impress your deal teams and provide the basis for a career in finance, however they're not the only way to excel.
In fact, during my time in investment banking, I worked on a lot of deals with the same analyst who didn't master any of the three skills mentioned above, yet moved on to receive top-bucket at year-end. While financial analysis skills impress associates, the following three skills impress senior bankers. Since senior bankers rank higher in the banking hierarchy, the previous mentioned analyst became top-ranked despite below-average financial analysis skills.
Build Up Killer Organizational Skills
Investment banking consists of running many different processes. Vice presidents are valuable because they have run these processes over and over and master every single step. Banks have product-specific groups that can add even more value at the later stages of any given process.
While an analyst has not seen each process very often, they can still add value by keeping track of all the short-term deliverables that are required to eventually get to the finish line. Great analysts who master financial analysis often times overlook the importance of organizing and keeping track of all the internal deliverables and all client communication. However, an organized analyst will noticeably speed up the process and free up the associate's time. A vice president only looks good when a deal moves at a fast pace and thus he will quickly pick up that you are "driving the process".
It goes without saying that in the year-end review, due to hierarchy, the vice president will speak up ahead of the associate and the associate would not dare to contradict whatever the vice president says (unless you really did a terrible job). The vice president will not have a good sense for your financial analysis skills since all he cared about was the process. Organizational skills will also help you with my next point.
Build Relationships With Senior Bankers
The most important factor in your your year-end review is that a senior banker in your group supports you. The best way to build up this relationship is to make sure that every time you work with someone new you leave a favorite first impression. When I started as a banking analyst, I always had at least one 2nd year analyst who wasn't on my deal team look over my product before handing it to the associate. A 2nd year can quickly tell you some of the details that a particular associate looks for. This way you can quickly improve the first impression of your product.
When you do leave a favorite first impression, people will request to work with you again. Through this ongoing relationship, you will eventually be able to build up trust and gain more responsibilities. Once you take on more responsibilities, you will feel more ownership of your work and also start gain a better understanding of the bigger picture. This will quickly help in reducing the amount of mistakes you make in your everyday tasks. Eventually, more associate-level tasks will be delegated to you and you will get more staffings with someone who you already built a rapport with.
Come year-end this will pay huge dividends for you. In the analyst review process, there will be one meeting where the majority of the group gathers to discuss all the analysts. This review can be as simple as the group-head saying your name and starring in a blank space. When you have no major relationships, then the room will remain quiet for some time. Eventually someone will speak up and say that you did ok when you worked together.
If you were able to build up a relationship, the whole outcome will be much different. The moment your name drops, this person will speak up and say something simple to the point of: "we worked together on a bunch of deals and i think she/he did a great job." With the herd-like behavior in banking, unless someone had a terrible experience working with you, no one will dare to bring up something negative. Only those people who had a positive experience working with you will speak up. In most banking groups this quick review session will be the major determinant of your ranking.
Plan Enough Vacation Days and Find Time to Relax
A lot of analysts, especially when they first start, are incredibly eager to take on every single project that they can. Eagerness in itself is great because the whole office will quickly take a liking to your cheerful attitude (except for 2nd year analysts). The senior bankers will appreciate it. On the other hand, while everyone picks up quickly whether you're making mistakes or not, no one is tracking how many projects you do take on. At the end of the year, the one argument that carries very little weight in the ranking of an analyst is how many projects he took on. If you do take on too many projects, it's just a matter of time until your attitude starts fading. To senior bankers your attitude is more important than the number of projects you take on.
At year-end, when the group head calls your name, you don't want a managing director to start the discussion by saying he didn't like your attitude. No matter how much the associates in your group enjoyed working with you, they will probably not dare to speak up and say that the reason your attitude dropped was because you worked until 4am every single night.