What is street smart in Investment Banking business?

Hey monkeys,

I am a junior analyst who just landed a full time M&A analyst role in the city. I asked for the feedback from my director and MD and they say

'All the job you have done is great, that's why we gave you an offer. BUT, you need to learn to be STREET SMART in the business and do not expose your weakness to your clients, both internal and external.

One of my personal philosophies is the radical truth and radical transparency (BTW I am reading Ray Dario's Principles and I strongly recommend this book to you), which means I am not afraid to ask dumb questions (for example, this one) as long as I can get the best answer to make my decisions.

Could anyone offer me some tips on being STREET SMART in the IB business? Any book or speech I could refer to?

Cheers

Comments (35)

 
Jan 5, 2018 - 8:59pm

Being street smart means you are able to deal with difficult social situations effectively. It means you are able to maneuver and present yourself as a strong, confident person and you are able to think fast on the spot. It means you can outsmart and outwit most people and you generally know what is happening around you and what the people around you are thinking. Street smarts come from instincts and can be developed through practice.

While I highly respect your philosophy of truth and transparency (indeed, you are a rare type in the business world), many successful bankers often bend the truth. While I am sure you can still be successful by being honest, the business world is often filled with people who are successful through rather untransparent ways. Having said that, you don't have to be a swindler to be street smart - you just need to know how to handle difficult social situations and how to outsmart and outwit your opponents.

Your best practice would come from practice, not from books or videos. Yet, I am sure there are tons of resources examining the thoughts of street-smart people.

 
Jan 23, 2018 - 5:17am

Respect to you my friend I like your answer!

Sony Santana
  • 1
 
Best Response
Jan 6, 2018 - 12:12am

I have given and received my fair share of reviews. If someone says that to you, as an analyst, it means that you lack common sense...such as, thinking it is OK to practice Dalio's principles at the bank you're at. That is not a good comment to get. The reason it's bad is because common sense is hard to learn. People tend to be more forgiving if the person who lacks common sense is just starting out ("oh, he just doesn't know any better" type of thing). But it becomes a real liability very quickly. For example, I had one analyst who was very smart (3.8 gpa from top school, high test scores, hard working, great person) but he lacked "street smarts". People thought he did fantastic work, but everyone was afraid to bring him to meetings with clients or even with senior people internally because everyone was afraid what would come out of his mouth. My best advice to you is...observe the people around you and copy what they do. If nobody at work is practicing radical honesty and transparency, then don't go around doing it even if you believe in it.

 
Jan 17, 2018 - 5:51pm

Great comment.

White collar service industries are trust businesses that are built on the reputation of the firm as well as the individuals that work for it. There is a famous adage about reputation - it takes forever to build a good one, but it can only take a moment to lose it. That means that the goodwill garnered over the course of a hundred successful engagements can potentially be outweighed by one particularly embarrassing or costly mistake.

What your bosses are saying is that you're okay for now because your role hasn't involved many client-facing responsibilities up until this point. Doesn't matter if you're emotionally intelligent when you're grinding out decks and spreadsheets for some associate in a cube all day.

However (and you will learn this when you start talking to clients), it is imperative that when talking with the client, you know the right answers. This means never being caught by surprise, which means carefully planning your response to anything that might come up in a client interaction. Personally, if I know I have to be on the phone with a client, I take however long I need to sit down and make a mental decision tree for the conversation. That way, my responses are airtight no matter what sort of curve ball I am thrown (at least, this is the goal).

You will quickly learn as a full time hire that your success is largely dependent on your ability to interface confidently with clients. Consider the following hypothetical:

  1. Analyst A gets on phone with the client and sends an out-of-date version of the latest financials before the call starts. He quickly rectifies it and the call proceeds.

  2. Analyst B does the same thing, but sends the right version from the start.

I know it might seem silly, but in professional services you are dealing with skeptical, critical people. Personally, if I was the client on the phone with Analyst A, I would be pleasant about his or her mistake, but I would regard all their work from that point forward with skepticism. By contrast, after a call with Analyst B, I'd probably say to Analyst B's boss "I like that kid you just hired, he did a solid job", and from that point forward I'd be inclined to think of you as competent and trustworthy.

In closing, I'll just say that a lot of professional services at a low to mid level is about the following: Never make a silly mistake. At best, mistakes are embarassing. At worst, they are disastrous. Every interaction you have, internally or externally, should adhere to the following maxim: "Whatever I do, I will not make a simple mistake." Before every interaction, think about what constitutes a mistake within the interaction. Typically it's something from the following list:

  1. Providing a wrong answer;
  2. Providing a correct answer that looks like it was arrived at haphazardly;
  3. Offending, embarassing, or putting in an uncomfortable position someone senior to you (or anyone who doesn't deserve it, for that matter);

Pay special attention to not put someone in an uncomfortable position. Whatever you are doing should result in a situation that your colleagues and clients are not just content, but happy to be in.

Array

  • 17
 
Jan 6, 2018 - 9:35pm

Radical Transparency sounds valiant and noble but that's not how you play chess or poker. It's not how you get ahead in ibanking. My colleague uses the term 'rat like cunning'. Street smarts is understanding the personalities at play, the human frailties, desires, etc and how to satisfy everyone at the table while still taking the lion's share. Play more poker.

Global buyer of highly distressed industrial companies. Pays Finder Fees Criteria = $50 - $500M revenues. Highly distressed industrial. Limited Reps and Warranties. Can close in 1-2 weeks.
  • 3
 
Jan 8, 2018 - 10:36pm

Being street smart means knowing how people work so they can't screw you over, simply put.

Array

  • 4
 
Jan 15, 2018 - 5:49pm

Thanks for all your relies. Very insightful indeed. Much appreciated.

I spent some time reflecting in the last few days and here are some of my thoughts.

  1. Though street smart cannot not be picked up immediately, it is still possible to learn the tricks. I decided to talk less and listen more in the business nowadays and always swallow the first thing I would say when talking to people and give it a second thought. Surprisingly, loads of craps I used to say actually exposed how ignorant I was.

  2. I put down all my egos and always smile, even at the hard truth (loads of ass kissing though). I found it very hard but somehow laying down my defence does me loads of good.

  3. There is a book I am reading right now which covers loads of 'business common sense'. It's Mark H. McCormack's What They Don't Teach You at Harvard Business School.

 
Jan 19, 2018 - 1:46pm

I have no idea why you're getting shit for this, it is not only factually correct, I found it funny, so props.

-"Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance."
 
Jan 17, 2018 - 5:18pm

Just on an unrelated side note,...... I have disliked every manager that has referred to "internal clients".....complete dogshit.

Best and most functional firms that I have worked at functioned as a team serving external client where everyone has each other's back in an effort to create the best product for the client.

 
Jan 17, 2018 - 10:31pm

Sitting, listening, copying others who exude professionalism, and keeping your cards close to your chest are great ways to act the part if you haven't quite learned how to play the game.

"A man can convince anyone he's somebody else, but never himself."
  • 2
 
Jan 18, 2018 - 12:26am

Stupid questions make you sound stupid and/or lazy. This reminds me of a convo I had with a mentor of mine on this topic that went something like this:
Me- "Back in HS teachers used to say 'there is no such thing as a stupid question'."
Him- "You should ask your teacher 'Is there such thing as a stupid teacher, after all there is no such thing as a stupid question'? "

LOL, on a real note, street smarts comes with experience, perceptiveness, common sense(turns out it's not so common anymore) and a shrewd business intelligence. It's also from your ability to read people, predict their intentions, understand body language and making an accurate judgement call based on the given info you have. Hope this helps.

 
Jan 19, 2018 - 10:44am

Any time anyone describes a philosophy as "radical" anything it imbues a sense that they think or act in absolutes... Not a great philosophical bent and is likely to some extent exactly to what this senior banker is referring. Banking isn't a business predicated on full transparency or radical anything...

 
Jan 21, 2018 - 5:45pm

Dalio isn't a banker. He's sort of a macro trader whose job it is is to think about what's priced wrong. Not a banker who services clients.

Where radical transparency works - analyzing the market is pricing wrong and discussing if the differing view is in fact correct.

Where radical transparency is awful. Telling a client the new product they are launching is awful.

 
Jan 21, 2018 - 8:56pm

First of all, Ray Dalio is an arrogant asshole. That works as a HF manager, it doesn't work when your job is to sell advice to clients.

Secondly, nobody in banking is radically honest. Fuck that. Everyone successful is neither truthful nor untruthful. They're tactically transparent and tactically tight-lipped. They're pragmatic, not radical. That's how you survive in a world where there are a thousand kids gunning for your job, a hundred rainmakers trying to snake your client, and a dozen corporate managers telling their boss your value-add doesn't justify your fee so they can earn a promotion.

Third, being "street smart" isn't a single coherent skillset. It's a general way of thinking and diagnosing situations. It's you. Because of that, street smarts are rarely learned, at least not directly as a result of an effort by a clueless person to understand the implications of what they say and how they act. When it is learned, it's a long and arduous process wherein you witness hundreds and thousands of interactions and slowly understand how people interpret shit.

Fourth, self-books are for the weak and feeble to read to feel better about themselves and their lives. They're written by arrogant assholes and glorified scam artists. They're not going to give you some sort of magic playbook to diagnose situations. Even if they did, would you trust them over your own internal logic? At least I hope not or you're even more fucked.

The fact that you're on here asking for books about street smarts in all caps is pretty much a guarantee that you'll never become the type of situationally conscientious go-to guy your boss is looking for.

 
Feb 14, 2018 - 1:23am

Naoki Hanzawa:

The 48 Laws of Power by Robert Greene.

Read it. Understand it. Use it. Repeat.

^^this

just a monkey trying to find his way in the finance jungle
 
Feb 14, 2018 - 1:50am

I would not recommend anyone in "actively using these strategies against their peers" under the age of 30. However, knowing these rules help you to become more aware of your surroundings.

The first rule is "Never Outshine The Master". At my first job in Asia, I came in as department head of a business unit at a major bank.

Trying very hard to prove myself, I was always trying too hard to impress my MD, who is the division head. Although my work proven useful and my department made money, I was not put under consideration for the promotion. The feedback I got from my fellow department heads was that I was too aggressive, too reformist and too confrontational.

On the other hand, my peer who get along with my MD was promoted over me despite not producing any results. His secret? He would always visit the MD at least 3 times per week either over lunch, coffee, or drinks. The MD did not find him threatening. He was probably the most poorly dressed guy in the office.

In the end I had to make friends with someone above my MD, who is from the group head office; thus, got assigned into a new role at another portfolio company within the conglomerate.

If I had read this book earlier, I would have adjusted my professional image to accelerate my career advancement within my firm. So in such instance, I find this book very useful.

Start Discussion

Popular Content See all

IB Sucks. I'm out
+101IBby 1st Year Analyst in Investment Banking - Generalist">Analyst 1 in IB - Gen
IB is not intellectually challenging
+54IBby Intern in Investment Banking - Mergers and Acquisitions">Intern in IB-M&A
Janet Yellen - Unrealized Capital Gains Tax. WTF
+27OFFby 1st Year Analyst in Investment Banking - Generalist">Analyst 1 in IB - Gen
VP Lying
+24IBby Prospective Monkey in Investment Banking - Mergers and Acquisitions">Prospect in IB-M&A

Total Avg Compensation

January 2021 Investment Banking

  • Director/MD (9) $911
  • Vice President (31) $349
  • Associates (141) $232
  • 2nd Year Analyst (89) $151
  • 3rd+ Year Analyst (19) $150
  • Intern/Summer Associate (91) $144
  • 1st Year Analyst (351) $132
  • Intern/Summer Analyst (299) $82

Leaderboard See all

1
LonLonMilk's picture
LonLonMilk
98.5
2
Jamoldo's picture
Jamoldo
98.4
3
Secyh62's picture
Secyh62
98.3
4
CompBanker's picture
CompBanker
97.9
5
redever's picture
redever
97.7
6
frgna's picture
frgna
97.6
7
Addinator's picture
Addinator
97.5
8
NuckFuts's picture
NuckFuts
97.5
9
bolo up's picture
bolo up
97.5
10
Edifice's picture
Edifice
97.5