UK
THE OUTSIDER: Redundancy – it isn’t your fault, honestly
6 June 2008
In the City, technical competence is taken for granted, sometimes wrongly. It’s regarded as a commodity that can be bought by the yard, a bit like the people who provide it. What turns the workforce into individuals who stand out, get noticed, promoted and paid, is the confidence and skill with which they do what they do. Confidence – though not over-confidence – is a key differentiator, and it can be the first casualty when the horrible axe of redundancy falls.
Having lived through several down cycles in the Square Mile, and seen friends and business associates apparently randomly taken out and shot, I’ve become cynical both about why people get fired and what to do when it happens.
The only certainty that traditional investment banks had at the start of the new financial year was their overhead. The chief operating officer might beat up all the teams to produce probability weighted forecasts of deal revenues, but everyone knew that if reality matched the forecast, it was an accident. Most firms went the integrated route, thinking to build in diversity and even quality of earnings – yes, really – by running trading books, taking positions, getting into asset management, and generally taking initiatives – management-think for activity which is actually a goal in its own right, regardless of what it achieves.
In fact, the investment banking industry, which holds itself out as a source of advice for other industries at critical points in their development, is itself about as badly managed as any of its clients, although it does have the edge on most of them when it comes to presentation skills and logical argument about whatever is its latest money-risking, bonus-generating wheeze.
So when things go wrong – and just lately they’ve been going terribly wrong – the greedy, impatient, short-term orientated individuals running the firm do what comes to them instinctively. They take greedy, impatient, short-term action.
What this means in practice is a first round of belt tightening – junior members of the firm flying at the back of the plane, staying in cheap hotels, not being allowed to charge taxis home at night, while the senior people, who are the real big spenders, show leadership by carrying on as before.
The next stage is shedding people. Once again, the axe rarely falls on senior people, who have been around a while and are part of the club, but on the junior ranks, where firing 10 people may save the same as one under-achieving managing director, but at least the impression can be created that a lot of activity is under way, that things are happening and management is being decisive.
The third stage is exiting whole business areas, with ethnic cleansing of entire departments, regardless of talent, ability or hard work.
The key point about all three stages is that they are unfair. Words like random, arbitrary, ruthless and thoughtless spring to mind. There is no covenant to ‘look after your people’. People are a commodity and commodities get traded.
But therein lies hope. Having seen confident, successful, exuberant people walking out of the office carrying their belongings in cardboard boxes – so much more thoughtful and discreet than bin-liners – and looking diminished by the experience, shocked and surprised and bewildered, the lesson I take away is that however hard it seems, you mustn’t allow it to matter. If you do, you risk becoming unravelled, and without confidence you won’t bounce back.
Of course it’s unfair. But keep your perspective and see it for what it is. It’s a casino, and not just any casino. We’re not here to play the slots. We’re in the high stakes room playing roulette. It may be random, it may be arbitrary, but we don’t complain when we win.
And when we lose, which everyone does from time to time, accept it and bounce back. You haven’t necessarily failed. Your firm, your boss, your team may have hit the rocks. Maybe it was the market, which is bigger than any of us. But you are still in the game, and in the long term that’s what matters.
David Charters’ latest book, The Ego Has Landed, is published by Elliott and Thompson, price £9.99.
I was made redundant on the day I returned from a year of maternity leave. "Global downturn rubbish." My boss was one of the worst managers I had ever had. I had a really good go at him with HR sitting in the conference room. I got a decent package and being on the "saver lifestyle" after having a child hasn't hurt along with a very understanding and supportive husband who is also in the business. I've picked myself off and dusted myself off and am looking for the right next job for myself. But basically, all investment banks are full of a bunch of insecure, money grubbing men. I will probably go back to one again because of the money and I am stating "flexble working hours please" at the start. It's not looking too good at the moment but let's see what happens. I give the next role a year and a quarter before I get pregnant again. And then let's see what happens after that...
Cross but Savvy 19 Aug 2008
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