We wrote a quick view of office politics at the entry level and it only gets worse. Once you’re able to distinguish who “matters” from who doesn’t and correctly align your reputation with the top performers… You’re only one step into the madness. We’ll attempt to explain some of the high level strategies to continue getting ahead while maintaining high external performance as well. Fortunately, we’re no longer in the field and this will likely be the last Wall Street related post we do for quite some time (excluding general market compensation updates well ahead of the news).
Review: Before jumping into office politics at the revenue generating level lets review what needs to be done for a junior banker who is trying to make the jump from low six figure income to mid-six figures as fast as possible:
1) Performance always comes first. Without doing your work correctly no person at the firm will ever like you. Throw away this notion that it is “all politics” in reality it is more of a 50/50. But. The first 50 percent is a *requirement* which means without good performance, nothing you do from a politics stand point will ever help you (only exception is your mom or dad is the CEO of a major client/company).
2) Once your performance is locked down… It is time to avoid association with people who are not in the “inner circle”. This is easy to find out. Write down all of the people who are generating the most revenue and write down the order of the names on internal large emails. People will mess up. You will be able to tell that the top priority people are generally mentioned up front in several emails “accidentally”.
3) While rank order at a firm is important it is not a 100% predictor of being in the “inner circle”. You may find that a managing director is on the verge of being fired, while a director has clear line of sight to an MD promotion. The clear move is to associate more with the director since the MD is losing more and more of his *political capital*
Now that we’ve reviewed the three basic items we’ll go into the details of how to survive in a revenue generating role.
It Only Gets Worse (Part 1): Make no mistake. The politics only get worse at a revenue generating role as you’re forced to cross pollinate your support internally. It is not enough to have one or two big hitters above you as support. You now must spread your marketing internally to other branches of the firm. If you’re a banker, you want the sales team and research time (only top performers) to know you extremely well. Once you have support from other branches the firm will then believe you’re “in it for the long haul”.
1) The first step is finding the top performers in each division and slowly building out a contact list there. Maybe you can meet at conferences and industry events or you can meet at Company wide “global leaders” events. Either way. You must find a quick way to begin establishing rapport with the rest of the top performers
2) You must avoid stepping on the wrong toes. If person A is well liked by person B (higher up)… and Person A does not like you… You’re going to have to find a way to get Person B to like you. Why? Well, with 100% certainty Person A is sharpening a knife to throw right into your back as soon as you slip up even once. Make one mis-step and he’ll take you out. The only way to avoid this political disaster is if Person B already likes you and he’s aware… Now you’ve effectively castrated a potential conflicting situation. Person A will now find a easier fish to fry.
3) Divest the HR team. At this point, HR becomes less meaningful and you can simply begin divesting your interest in their opinion. While you were previously building rapport across HR as a junior employee, your best bet is to simply get Junior employees to be “okay” working for you and HR will view you as a “middle of the road employee”. This is now okay. Your pay does not touch the hands of HR anymore so you’re best to invest time internally promoting your own work.
In summary, while your previous goal was 1) performance, 2) top performers and 3) HR. Your new goals are 1) clients, 2) Top Performers and 3) performers outside of your group. This is a key distinction as your time spent being the HR cheerleader is no longer worth it.
The VP Avalanche Zone: To summarize the first level of revenue generation, you’re on the chopping block. The best way to think about Wall Street is as follows: 1) Analyst – overpaid person they are trying to invest in, 2) Associate underpaid person by year 2 as you should be client facing, 3) VP – every single action scrutinized, 4) director/MD – consistent performance based income.
1) The biggest mistake is mentioned above. Now that your entire livelihood is based on performance there is no reason to waste your valuable time with issues that do not generate income. You already have a strong foothold with HR and other non-revenue pieces of the Company so you just need to maintain your perception in the office. Do not reinvest valuable time into being a cheerleader when you can make 2-3 phone calls to clients instead. Finally, if you have an extra 10-15 minutes to help a non-revenue generating position like HR… Then go for it. The point is that you never spend a single second on it if you can find ways to generate revenue instead.
2) Bolt on if possible. Assuming you’ve done a great job establishing relationships with top performers, there is a high likelihood that the top performer has spill over clients. This is a gold mine. While you’re not going to make a ton of money taking table scraps from the guy making $3M+ a year… You’re not going to get yelled at either. There is nothing wrong with serving clientele who were previously *underserved* in the past. Lots of people make the mistake of either 1) going it all alone into a different direction or 2) trying to build a base from scratch when others are willing to help. There is a clear middle ground where you pick up easy slack and spend your free time on adhoc client building.
3) Get ready to manage egos. No matter what you do, lots of clients and internal employees will not like you. This is the name of the game. The president of the United States gets a 50% approval rating so don’t expect a 90% approval rating from clients either. Again. This emphasizes the importance of solid internal relationships as the hand me down clients are the easiest to win over if you can simply avoid dropping the ball.
In summary, you’re going to take the low hanging fruit if possible and get used to lots of people not liking you because… well.. it’s always a numbers game.
Break Off Transition: Assuming you’ve done a good job with the three items above it is now absolutely paramount to do the following 1) give credit to everyone who helped you and 2) get an offer from a competing firm. What?! Yes you read that correctly.
If you do extremely well and give credit to people who help… you’ve successfully done the right thing in the eyes of everyone. However. If you have correctly built out a base outside the low hanging fruit it will be extremely easy to jump to another platform. Once you obtain an offer you’re going to see exactly what they think in terms of your potential long term. This is going to result in a direct promotion or a new position… with of course another promotion.
There are rare instances where you won’t need a bargaining chip. But. The reality is that they will hold you at the VP level for as long as possible. They will claim all your success is related to people above you and you’ll “play dumb” by echoing the same sentiment. Again. If you’re smart. You’ve used the low hanging fruit as selling points to your other group of organic clients and can hit the ground running at a new firm. In addition, once your current firm realizes you’ve already carved out a new niche, they will have a hard time letting you simply walk out the door.
It Only Gets Worse (Part 2): Now lets assume you’ve done everything correctly. You survived the avalanche zone. You have moved into an SVP or Director role. Now you’re effectively a standalone entity with a dwindling amount of political capital. The positive is that all your political capital can be used directly to make more money and the negative is that you’re officially back to square zero from a political capital perspective. (Reminder, each year of solid performance is about 1 unit of political capital and every 3-4 units means a meaningful promotion or raise).
Just one problem. The ceiling is becoming real.
At this point, you’re surrounded by ~80% solid performers and 20% mediocre ones. The bonus pool to chase after is now a dog-eat-dog fight as all of you understand the game and will be leveraging every single offer to get more money. Every transaction closed, every single item that shows up as revenue will be an immediate tug into the direction of the generator. In an ideal world you’ll be doing more transactions than most. But. That is not always the case.
Finally, the last bit of headache is the client hurdle. The top performers naturally have the top clients so it is even more difficult to crack into the higher fee transactions without even being in the room.
You can guess what needs to be done now… Which is latch on aggressively to your new carved out sector and client base. Your new game plan is to continue growing the base outside of the giant clients and wait for them to evolve and grow. The faster your new clients grow to become major companies, the better and easier your life will become.
One last word on this… Wall Street is extremely small. If you find a specific person was recently fired or jumped to a new firm… You should immediately email and contact that firm to see if you can jump in with a few extra business cards (IE: they let you take over a sector that was already covered internally by your firm).
Thoughts on the Future: Near-term we’re not incredibly bullish on Wall Street compensation. If money is continuously printed perhaps we see a couple of years of flattish pay until the inevitable decline and eventual recession. The layoffs have already occurred and as we noted… well in advance… bonuses were down about 5-10% (9% being the average).
The quick take is that we’ll eventually have to go through a downturn or compensation compression time period for a couple of years. In this environment it is actually better to *enter* the industry at the bottom and it is best to *exit* the industry around now before the decline (higher payout of negotiated severance or layoff).
Thoughts on What to Do: We’ll say it a million times (pun intended), there is no reason to rely on someone else to pay for your food, rent and livelihood. Every single person should own a business that does not require you to trade time for money (no scale). Once you can create an actual product that sells and is not a mumbo jumbo feel good product (heroine for regular people) you can sit back and really appreciate actual control of your life. Most think they dislike their career, but in reality they dislike *reporting to other people*. Being in charge of your own life and freedom is really the first step to being rich in the first place.