Monday, March 28, 2011

Minneapolis-Bound: OP, 2011

Minneapolis will host the Consortium's 45th Orientation Program in June

The Consortium's annual Orientation Program for new students and alumni will take place in Minneapolis this year, June 26-29. Minneapolis will be the host city for the third time. This is the Consortium's 45th orientation. The program was in Orlando last year and in Charlotte the previous year.

Depending on sponsors and arrangements with at various locations, the Orientation Program has criss-crossed the country. Dallas, New York, St. Louis, Atlanta, Cincinnati, Indianapolis, and San Francisco have also hosted the OP in the past.

The Orientation Program celebrates the achievements of new students and introduces them to each other and to business-school deans and officials and corporate sponsors. Activities involving alumni and others are included. The career fair has always been one of the most popular events during the week. New students also like the panel events on industry sectors from consumer products to investment banking.

Alumni, sponsors and corporate representatives interested in more information about this year's program should go directly to the Consortium website:

As at the last two OPs, the Consortium Finance Network plans to have a presence during the week and at the career fair (along with other special-interest groups). It will introduce CFN to new students and other alumni, solicit input about programs and events, and welcome others interested in working with the steering committee.

For the past two years, CFN has prepared a detailed, useful guide for first-year MBA students in finance. The guide will be updated and sent to new students in finance again this year in June. The guide offers advice on what students in finance should do in the summer before business school and how to gear up for recruiting once they get to campus.

The guide offers tools and hints on technical topics (from corporate finance to capital markets) and helps students keep up with the rapid changes and updates in finance.

If you plan to attend OP this year (as an alumnus, sponsor or corporate representative) and want to help CFN and other Consortium special-interest groups (at the career fair), let us know (via Linkedin or separate e-mail). If you're interested in a copy of this year's finance-student guide, we can send you a copy when it is ready.

Tracy Williams

Friday, March 18, 2011

Diversity: Time for an Update

With a recovery on the way (despite occasional bumps and bruises), it's time for a diversity update.

Have financial institutions revived their efforts to increase the number of professionals among under-represented minorities and women?  Is there a steady pipeline of blacks, Latinos, Asians and women joining banks, hedge funds, brokerage firms, asset managers, private-equity firms and insurance companies? Is diverse talent coming to Wall Street in growing numbers? Are they starting out in fast-track roles with ample opportunity to become vice presidents and senior managers?

In financial services, what grade does diversity as an agenda topic deserve in 2011?

Did progress slow down during the crisis and is stalled while the environment is better? Are institutions taking advantage of talent flow made possible by the Consortium and other programs--MLT, Toigo, InRoads, SEO, Jumpstart, NBMBA, NHMBA or 85 Broads?

Granted, diversity seems sometimes to be a cyclical phenomenon.  Financial institutions devote time, attention and energy to open their doors, and then something impedes progress or slows it to a crawl. Attention is diverted, or energy dims. Mergers, reorganizations, and restructurings can douse enthusiasm. So can bad corporate performance, indifferent management, or a corporate culture that caters to nepotism and cliques.

Most financial institutions made laudable progress in the 2000s. But then came the financial crisis.  All of a sudden, diversity committees were tabled, didn't have time to meet or were no longer a priority.  The Executive Vice President, who convened a monthly meeting to address topics raised by senior women or senior bankers of color, suddenly cancels sessions. The investment firm that supported pipeline organizations and advertised everywhere its support of such programs suddenly withdraws sponsorship.

Senior managers focused on the survival of institutions.  They focused on reviving sagging businesses and attracting capital and clients. Many firms curtailed recruiting--sometimes because resources were gone, other times because competent leaders of diversity efforts were no longer around.

Through it all, however, a few firms, worthy of praise, stuck through. They fought for their lives to survive a downturn and remain viable, but diversity remained a priority.  The best firms understand that diversity is not a short-term project. They believe in the long-term payout.

As many financial institutions have rebounded and put turmoil behind them, has diversity revived, too? Is it an important, legitimate part of the corporate agenda? 

In 2011, major financial institutions don't dismiss the agenda. Many have permanent programs in place. Smaller firms sometimes neglect its importance, because they are struggling to grow and expand and may not appreciate the value of diversity. Or they may not yet value talent, input and experience from those with different backgrounds.

In 2011, major institutions are likely rearranging the diversity agenda in various ways.  Most--like a Goldman Sachs, Wells Fargo, New York Life, Citi, or Bank of America--hire diverse talent into entry-level programs in satisfactory numbers. They hire Consortium and Toigo MBA graduates. They recruit at HBCUs, and they sponsor programs to encourage women to seek opportunities in finance. They examine whether they can improve recruiting among all groups--blacks, Latinos, gays, women, and Asians.

But in 2011, larger institutions notice something else that requires fixing. Some worry about what to do; some are not sure what to do. They say they need to replenish diverse talent at middle and upper levels. They say it and know it. They just aren't sure of a solution. Where are the Latino senior associates, the black vice presidents or female heads of trading desks, all of whom will one day become managing directors, sector executives, presidents of international divisions or chief financial officers? Who will be the next Kenneth Chenault?

The financial downturn depleted the ranks of mid-and-upper-level diverse talent at many institutions. Some were dismissed, some retired, some reassigned to roles with less responsibility, and many others opted out, electing to explore other less-pressured areas. At some banks, brokerages, investment firms and funds, there are fewer people of color in mid-to-upper roles today than five years ago.

Why have they been successful in hiring into entry positions, but watch the numbers at higher echelons? Some institutions whine they can't find and retain mid-level talent. They complain, aren't sure what to do, and stumble in forming strategies to do something. Other institutions take action and do something.

Citi, for example, sponsored the Consortium Finance Network event in Feb., primarily because it hoped to identify experienced diverse talent, people whom they can hire now at senior-associate and vice-president levels in many areas of corporate- and investment-banking.  JPMorgan has appointed recruiting officers to find diverse talent, who can move laterally onto trading desks, into research spots, into operations and financial management, or into corporate-finance roles.

The crisis took its toll. It could have been a traumatic memory for many early-career professionals from under-represented groups. So the challenge to boost numbers in the upper ranks might continue. Many MBAs who were once willing to do whatever it takes to secure a position in private banking, private equity, mergers & acquisitions, equity research or derivatives trading may have second thoughts or may have discovered other  appealing opportunities, where they can deploy the same skills.

Others may no longer want to guess at or pull their brains to figure out the intangibles necessary to move up the ranks. Hard work, productivity, deals, and new clients, they learned, don't always guarantee promotions to managing director or sector head. Networking, special ties, and "the right vibes" are also factors or variables--based on subjective impressions of performance.

Those starting out today may also be subject to more pressure to produce and generate revenues faster than in years before. At many companies, there is no more apprentice period or chance to learn the business first.

For some MBAs, there could be a looming fear of  another market collapse around the corner, an interruption that would once again jeopardize job security and long-term careers. Some from under-represented groups might prefer the security of other industries or opportunities--especially after an investment of two years in business school.

But some in under-represented groups are just as motivated and interested as ever. They want long-term careers in private banking, venture capital, and corporate finance. So the talent is out there. 

In finance circles, institutions finally achieved, say, a B+ grade in improvements in the 2000s. That grade slipped to C- or D at many organizations during the two-year crisis period. A renewed interest in trying to do the right thing merits a B- grade. Diversity still appears cyclical. Some firms keep the momentum going, others still need the occasional push or thrust.

Tracy Williams

Friday, March 11, 2011

New Consortium Class: A Well-Thought-Out Detour

In a matter of days, around the country, over 300 Consortium applicants will have received good news. They will have been invited to become Consortium members and will prepare to enter top-tier business schools. Many will be awarded full-tuition fellowships.  Of course, they will be invited to the annual Orientation Program (this year in Minneapolis), where they'll meet fellow Consortium students from 17 schools. They will join more than 6,000 other Consortium alumni and students.

They'll be relieved, knowing the painstaking effort to apply, write detailed essays about their business aspirations, solicit recommendations, and present themselves in neat, powerful packages will have been worth it.  

This year's class, more than a conventional class, endured much to reach the point of returning to school. A typical applicant probably finished college in the mid-2000s and joined a prominent institution in an entry-level program. When applicants started out, it would have been bustling years; markets soared and there was little hint that a collapse was approaching.  But just as they began to make full impressions in their work worlds, rugs were pulled from them.

Hence, this new crop of Consortium students endured and survived the worst of the financial crisis and recession. They had to bear lay-offs, uncertainty, changes in jobs, and re-locations; they had to reflect candidly about what they wanted to do in the long run. Their reflections likely led them to consider business school as the best option to rekindle their careers, transition into something they enjoy or prefer, or steer themselves onto a better long-term track.

This new crop, too, was well-schooled on how to take next steps, make switches, or present themselves in attractive ways. One outcome of the recent times has been a flood of career advice offered to young MBAs or pre-MBAs--a cottage industry of executive and business coaching.  Before they set off to business school, many in this class reached out to mentors, managers, and career counselors. They will have had chances to get their resumes' reviewed, polished, and reformatted, their elevator pitches perfected, and--thanks to Facebook and Linkedin--their networks expanded and nurtured. 

In the midst of turmoil, transitions, and coaching, applicants decided the next step would be business school.

Applicants and new students are not necessarily abandoning old, favorite career paths, but they don't appear to fall into conventional or prestige traps.  Recall the days when students marched into business school wanting investment banking or consulting, but weren't sure why or aware what it entailed--beyond the fact that this is what students at top schools do, so they heard.

Or remember way back when business-school graduates fled to dot-com start-ups, not because they had an idea or a plan, but because that was the target path for a period. Some applicants and students this year (and in recent classes) still want investment banking or consulting and some want to work for Internet companies on the West Coast, but they know why and understand why. 

Applicants and new students today also are willing to explore, change their minds, and pursue something they had not thought of initially. Thus, students start out with mergers and acquisitions in mind and decide (with emphasis and determination) they prefer private banking. Some say they want to be derivatives traders, but learn about green technology, microfinance, media management and take detours into that direction.

Some, while in school, discover pharmaceutical or energy sectors or international business and all of a sudden focus on new interests.  Others start in real estate and switch into investment management. Others, too, become turned on to industry groups and decide to accept corporate-finance offers in industrial or consumer-product companies. Or they learn they can do mergers, acquisitions, consulting or business strategy at companies outside of Wall Street or Park Avenue.

Today's Consortium applicants and students appear comfortable switching into something else without regret or without missing the career that might have been if they stayed on a conventional path. Business schools have stepped up to explain and present a variety of career options--from entrepreneurship to non-profit management to innovative business models--and to show the advantages of working abroad.

Gone are the days when applicants, after they are admitted to a top school, checked off they wanted to do consulting at McKinsey and spend 5-10 years there before deciding what's next.  Applicants and students, nowadays, don't necessarily know what they want to do, and they are comfortable with that. They do know, more than ever, they must seize control and chart pathways for themselves.

First, however, comes the thrilling anticipation of an overwhelming, memorable two-year experience in school.  There will be core courses, case studies and mind-boggling amounts of work. But there will also be eye-opening sessions with professors who are doing new things, spring-break jaunts to foreign companies, important projects that reach into the community or across the country, taps into elaborate alumni and student networks, and perhaps a semester in South America, China or Europe. An exciting detour before they resume a career path better thought out.

Tracy Williams

Friday, March 4, 2011

The Dreaded Performance Review

Here is the scenario. You are a fourth-year associate at a major financial institution. It's late December, or early January. Your supervising manager summons you to his (or her) office. You know the meeting topic has nothing to do with a client, deal, financial model, or presentation. You discern the uneasiness of your manager. The calendar hints at the nature of the meeting. It's time for the dreaded performance review.

You dread it because you had no meaningful review of performance during the course of the year. You dread it because you have no clue in which direction the evaluation will swing: Outstanding? Superb? Above-average? Insufficient? Below par? Didn't meet expectations? Your manager decides.

You prepare yourself for the worst of assessments and hope for the best--good or bad, fair or unfair, subjective or objective, misleading or straightforward. If you are inexperienced, you may approach it with too much confidence, because if the boss hasn't critiqued your work in severe, traumatizing ways, you assume must doing fine.

If you have been around long enough and you understand the "game" of performance reviews, you arm yourself with statistics, lists of accomplishments, any summary output from long hours of toil, and examples of where you had a notable impact on the bottom line--all matters of record that will deflect the slings of unfair observations of what you've done the past year.

Some managers handle the performance review well. It's not a rushed, one-hour session late on New Year's Eve.  The best managers provide ongoing feedback, focus on constructive commentary, start the year with goals and objectives, and revise or update them as the year unfurls.  The best managers use metrics or objective standards to measure progress with goals and are sticklers for making the process as fair as possible. They minimize bias and try for an uplifting, forward-looking experience when giving feedback.

But some managers fail at it. Many managers, especially those in a deal-doing, trading-oriented, client-focused environments at financial institutions, will say they can't find time, energy or attention span to do this for all who report directly to them. They don't hold regular review sessions, because there are other pressures to tend to--responding to clients, boosting revenues, or preparing reports for senior managers.

So they skimp. They skip quarterly feedback sessions, or provide critiques in the form of hollow, unknowing comments or in emotional outbursts. Or they whisper their assessments to colleagues, not directly to employees.  Manager and employee during the year have countless conversations in business settings, when they plot strategies to ward off competitors, make plans to win a client over, or review details of a major presentation to senior business leaders.  But they avoid the uneasiness of having regular dialogue about how both are performing--employee and the manager. They put it off, and the manager always promises there will be an in-depth performance review at year end.

For the best managers, because they have meaningful exchange throughout the year with employees, the dreaded performance reviews are welcome, lively meetings. There is less tension. The year-end  meetings are more about setting goals and objectives for the next year.

For others, these sessions often turn out to be clumsy and difficult. The employee comes away with a superficial or unfair evaluation, or sometimes the employee emerges so scathed that he or she decides "it's time to leave the insitution." That's why some experts have a radical solution:  The formal, year-end performance review ought to be done away with. 

Samuel Culbert, a professor at Consortium school UCLA-Anderson, says performance reviews--the way they are customarily conducted--ought to be abolished. He wrote the book on it:  "Get Rid of the Performance Review! How Companies Stop Intimidating, Start Managing--and Focus on What Really Matters."  The title is a mouthful, but Culbert might be on to something.

This week he wrote about it in an Op-Ed piece in the New York Times. The essay was intended to prove the error in the ways of state politicians, who favor performance reviews of state workers vs. the restrictive review standards of unions. However, he used the Times platform to say that performance reviews, in general, whether among public-school teachers in Wisconsin or engineers at IBM or fourth-year associates at Morgan Stanley, don't work well. And he explained why.

"I've learned that they are subjective evaluations that measure how 'comfortable' a boss is with an employee," Culbert said in the Times.  "Not how much an employee contributes to overall results. they are an intimidating tool that makes employees too scared to speak their minds, lest their criticsm come back to haunt them in their annual evaluations.

"Performance reviews corrupt the system," he wrote, "by getting employees to focus on pleasing the boss, rather than on achieving desired results." (See for more about Culbert's ideas and the book.)

Culbert recommends "top-down reviews," where managers and employees together set goals and objectives, measure the progress of both parties achieving those goals, and hold both accountable. In this way, it's not about the employee messing up or trying to please the boss; it's about the manager-employee in unison making accomplishments or assessing together why they may have fallen short. In this setting, the review of performance is objective, measurable, and mutual.

He also recommends a "pre-performance review."  Those sessions are comfortable for participants, revolve around honest, open discussion of goals and accountability, and often prove to be more beneficial to employee, manager and the business group.  It eliminates the one-sidedness of performance reviews.

It does, however, require time and priority. Managers must set aside time to help employees set goals and review them throughout the year. And managers' managers must similarly provide goals and objectives and incentives to make sure they do.

Many financial institutions assess employees based on forced ranking and rating systems--arguably the primary reason why performance reviews are dreaded. Ranking and ratings make it easy for business groups to carve out pieces of the bonus pie as quickly and efficiently as possible.  For most finance professionals, a year's worth of work, projects, business trips, research, revenue generation, presentations, modeling, strategizing, risk assessment, and tough client negotiations come down to a single ranking or rating. That ranking or rating contributes to holiday stress and tension among employees. They worry and wonder about it; they can't interpret what it implies.

Often managers are pleased with the work, progress and contributions of most employees.  They may say so throughout the year in passing comments and summarize this well in performance write-ups. Some are rarely critical in written evaluations and worry that criticism will discourage the best employee and cause them to leave. But a ranking-rating system requires that they "grade on a curve."

Managers are forced to assign a rating or ranking for most employees that says bluntly they are "middle of the pack," "just getting by," or "no longer essential"--even if managers don't feel it or mean it. The ranking system requires that most employees in a group must be deemed "average," even if in a group, division or sector, a large number of them are truly outstanding.

Knowing there is such a system, the fourth-year associate above dreads performance-review day. And for all the 60-80-hour work-weeks and missed vacations and enormous output (in projects, presentations, decks, models, and travel all over the country), he or she knows the ranking may likely suggest "just average" or "just getting by."

If young professionals or MBAs early in their careers cannot squash the system or are too junior to try to overhaul it for something fair and better or something that emphasizes development and improvement, what can they do?

1.  If your manager doesn't present or articulate goals and objectives, prepare your own. This doesn't require much time; it may, nonetheless, require thought and contemplation.  Show them to the manager at the beginning of the year and schedule meetings to discuss progress during the year.

2.  Scheduling meetings with managers to discuss clients, business, revenue trends and deals is not hard. Scheduling meetings to discuss performance and solicit constructive feedback is downright difficult. Many managers put them off. Some don't like this part of management. So find ways to have informal, ongoing discussions with managers about priorities, workload, working agenda, and progress. Informal dialogue will be more comfortable and often more productive. This permits you and the manager to understand better your contributions and the factors that might affect performance.

3. Prepare your own self-assessment about twice a year. This also doesn't require much time, if you keep notes during the year of what you have done and the impact you have on a team or larger group. Include contributions, strengths, accomplishments, and measured impact on the bottom line. Include areas of improvement, new interests and activities related to recruiting and development of yourself and others. Include, too, current career plans--what you hope to do five years from now.

4. Throughout the year, show initiative and insight; be creative and helpful. Find a way to show that you are thinking three or four steps ahead of everybody else. This helps you stand out among others.

Some financial institutions endorse and implement some of these procedures. But they do so primarily to ease the burden of managers who may not be familiar with employees' specific contributions during the year. At the end of the year, be prepared to present your self-assessment, if only because it helps to create a comfortable session and will spur an immediate discussion of upcoming goals and objectives.  In this way, you manage the review of performance and minimize subjectivity, biases and emotions.

These aren't solutions to Culbert's problems with performance reviews. But they are ways for that fourth-year associate or any other recent MBA to take control and present the best side of him- or herself.

Tracy Williams