How Bankers Are Coping
Much has been written in the financial press and elsewhere about the crisis in the banking sector. My colleague Umair Haque has examined the wider strategic questions behind it, while recent coverage in the Financial Times says the industry is in its worst crisis in 30 years, with revenues forecast to fall by as much as 45 per cent this year.
Commentators and banking experts believe the industry will recover in the medium to long term, but the short-term fall-out is tough. As an executive coach with many clients in the banking sector, I have been observing how individual bankers and their teams have been dealing with the crisis at a human level, beyond the strategy and business.
Of the hundreds of investment bankers I have worked with, I have noticed some striking similarities. First, they are usually smart, focused and tenacious. Second, they are adaptable and capable of dealing with huge amounts of complexity and uncertainty in their day-to-day roles. Third, they live in a black-and- white, transactional world. If they meet their budgets, they get their bonus. If they don’t…well, better not go there.
Beyond these three fundamentals lie some interesting differentiators. Of all the professions, banking seems to draw people from the widest range of backgrounds. Some have Ph.Ds in mathematics or quantum physics, others left school at 16. Some have worked their way to the top in a single bank, others have hopped around a number of banks. Some are career bankers, others have changed mid-career. I have come across nuclear scientists, concert pianists, sports professionals and artists who have found their way into banks.
Despite of all the energy, intelligence, and undoubted talents they bring to the industry, banking remains – at least to outsiders like myself – curiously inert and soulless. The obvious reason would be that, unlike other professions, bankers are motivated primarily – sometimes solely - by money. Intellectual, entrepreneurial or creative considerations come a long way behind financial motivators. However, the relentless focus and drive that is needed to make money result in organisations where individuals become highly transactional and efficient. People skills are eroded and undervalued. The cultures are transactional, short-term, full of conflict.
One thing I have long observed among bankers is their marked ambivalence towards their careers – and it is becoming more evident as the banking crisis deepens. Few appear to have made the profession their first choice. The financial rewards are initially a great draw, yet for many they become a trap. I have lost count of the number of people who are desperate to leave, but want to last for another five or 10 years, to pay off the mortgage, see their children through school, or build some financial security for their families.
As the banks have admitted huge write-downs, as senior industry figures have been fired and the industry has been criticised, their usual confidence, ambition and certainty have given way to self-doubt and an admission that the industry needs to put its house in order. However adaptable bankers are, the current challenges could prove a turning point. In recent months, many bankers have told me it is a challenge too far: many have never dealt with such uncertainty or the increasingly negative perceptions of their industry.
These factors, together with the pressures of daily business, the relentless drive for profits, the lack of job security and the fact that many are ambivalent about their careers, mean that many are seriously questioning how long – or whether - they want to stay in the profession.
So what do all the bankers out there think? How are you dealing with the current challenges? What do you think the future holds for you? What qualities will leaders need to withstand the current crisis and where do you look for inspiration?
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Gill Corkindale is an executive coach and writer based in London. She works with managers and leaders from Europe, Asia, Africa, Latin America and the Middle East to develop strategies for business effectiveness and personal change. Formerly management editor of the Financial Times, she uses her journalistic skills and business insights to bring a new perspective on global management and leadership.
Comments
Only a few people are fortunate enough to work in jobs that have 'a purpose' - such as medicine or science. And only a few of this minority also earn handsome salaries. Most people who do 'important'jobs such as the police or fire fighters must gain their satisfaction from what they do and not how much money they make. Most of us work to live and take as much pride as possible in our work. We can tell ourselves that what we do is important but we know in our hearts that this is an exaggeration. Those who work at the cutting edge of capitalism, who take huge risks in the hope of making huge profits for their customers and themselves, are confronted daily with the truth that they only exist to make money. So I am not surprised Gill that you find so many bankers want to leave as quickly as possible.
- Posted by andrew
April 20, 2008 11:13 AM
Gill, The credit crunch that is hurting many millions around the world has meant that bankers are as unpopular now as used car salesmen. But I wonder if we have gone too far in demonising them. After all they haven't created the system that allows them to gamble billions using financial instruments most of us will never understand. Bankers should not blame themselves for what has happened. However each must examine his or own soul and ask if this is how they wish to spend their lives. That is healthy and it must count as a welcome consequence of the credit crunch.
- Posted by ahmed h
April 21, 2008 4:36 AM
I don't think the idea that bankers are just in the industry for the money is complete. Sure, it may be the primary driver for many in the industry, but I think there's plenty of purpose in banking. For example, take today's news about National City. Here's a company (it just so happens to be a bank) that was in desparate need of capital. If it didn't receive the $6 billion from Corsair Capital (which is led by Nicholas Paumgarten, a former First Boston investment banker, according to the WSJ), then thousands of jobs would have been lost in the Northeastern Ohio region and across the country. But due to the efforts of this banker and other bankers involved with the deal, these people's jobs will be saved. The regional economy will be bolstered. This is an example of the broader purpose of bankers.
- Posted by Tom
April 21, 2008 8:56 AM
Dear Gill
It is no bad thing for bankers to be shaken to the core by the credit crunch. For too long bankers operating in the investment arms of banks have looked down on their colleagues in retail banking. The retail bankers must deal with ordinary people. They mop up after the mess caused to their customers' lives by such disasters as the credit crunch. Investment bankers work for institutions, companies, governments and the super wealthy. Their clients are not personally affected when mistakes are made. The bankers are also traditionally not affected when they fail. It is surely healthy for all of us if they are chastened today. In future let us hope they will be more responsible.
- Posted by abdul hassan
April 24, 2008 9:38 AM
Bankers in the future must think of the impact of their decisions upon the world. Globalisation, the instantaneous nature of communications and the complexity of financial instruments have placed a great responsibility on them. Let us give bankers the chance to show they have taken on board the lessons of the recent past.
- Posted by andrew leigh
April 27, 2008 12:20 PM
Might I direct readers to the remarks today by Mr Mervyn A King, the famous economist and governor of the Bank of England, when he spoke to Members of Parliament on the Treasury Select Committee of the House of Commons today.
He is worried that so many talented young people are drawn to careers in the financial world because of the financial rewards on offer.
What will happen when these people reach middle age and look back at lives spent only in the pursuit of money?
- Posted by mr j khan
April 29, 2008 11:15 AM
Hi Gill,
great article, and timely too.
What drives most of the financing decisions of Bank(er)s? genuine interest to promote a good cause or the sometimes blinding need for short-term "paper" profitability. where is the professionalism?BANKING REMAINS THE MOST REGULATED INDUSTRY IN THE WORLD.it therefore behoves those at the helm of affairs to reduce recruitment errors by employing capable staff to oversee and run the Human Resources units.The operators in the banking industry should also provide adequate funding for (re)training of staff on corporate (while in employment) and personal (for retirement or enterpreneural reasons) survival.
- Posted by Anonymous
May 15, 2008 6:31 AM
My apologies. the last contribution emphasising HR contribution and listed as anonymous was sent in by Ini-odu Akpan, Nigeria.
Thank you.
- Posted by Anonymous
May 15, 2008 6:41 AM
How Bankers Are Coping
Posted by Gill Corkindale on April 17, 2008 10:24 AM
Much has been written in the financial press and elsewhere about the crisis in the banking sector. My colleague Umair Haque has examined the wider strategic questions behind it, while recent coverage in the Financial Times says the industry is in its worst crisis in 30 years, with revenues forecast to fall by as much as 45 per cent this year.
Gill
Three dogmas, modernist beliefs that perturb any are repeated for ease of references.
• methods of making payments in order to facilitate the exchange of goods and services;
• mechanisms for pooling resources to fund large-scale enterprises;
• ways to transfer economic resources over time and across distances, as in lending and investing;
• methods of managing risk, such as insuring, diversifying, and hedging;
Let us look at these as one issue then may be we will rethink of the Big Five , the old faithful that we had and we have no more of those types but now hypes.
Banks via LC still trade and exchange goods if not directly via the exporters and importers.
I seriously think that BP, Shell or Novartis would hesitate to take on bank as the partners for any purposes. It is the confidential as the formula of Coke is.
The industry of insurance is vested in reinsurances and I doubt the banks that are already a player in investing in many projects of insurances will want a direct hand in the reports as brokers, shareholders or agents. The insurance is based on law of averages. The banking is cash and liquidity. There is no assumption. The car 5thy car out of 100 cars is no problem to the insurance company. The one customer going bankrupt is a big think talk of the bank if the bank wants to stay in the business. The news spreads very fast.
While insurance is the service given to the assets, the humankind given the service to human like hotels etc. any mishap, it ruins the name.
Therefore, we cannot compare the two at any point.
Bank will have to cope as they are coping creating the money form branches to branches and resort to the Central Bank when the tough is in sight. .
I thank you
Firozali A. Mulla MBA PhD
P.O.Box 6044
Dar-Es-Salaam
Tanzania
East Africa
- Posted by Firozali A.Mulla MBA PhD
May 15, 2008 8:52 AM