BANK CAREER DEMANDS AN MBA STRATEGY

[agk99]

BANK CAREER DEMANDS AN MBA STRATEGY

By Neil Courtis

Monday, February 25, 2008

(excerpt from Finanial Times)


For many, an MBA is a path to a new career. And for those targeting investment banking, top business schools certainly offer a springboard. But to what? With fear of recession rising and banks reeling from huge credit write-offs, potential business school applicants need to appreciate that they may face a more competitive job market when they graduate. Banks, in particular, may hire fewer and be less willing to take risks with those they hire. Career changers more than ever need a strategy.

First off, applicants need to pick the right school. Recruiters at investment banks have never been short of résumés. Time is limited and leading business schools appeal because they provide a filtered talent pool.

Many banks will visit only three to five schools in Europe and a handful more in the US. Accordingly, a career switcher going into banking really needs to get into one of these top schools. If you have a particular bank in mind, look at the schools' annual graduate employment data and see which ones banks favour most for their MBA hires.

But read these statistics carefully. Many step from business school into the financial sector, but many come from there in the first place, too. Career-switchers need a strategy to compete with their more experienced peers.

Advance preparation is key. Investment banks usually recruit primarily through internships. Many expect to make all their offers to those they have seen perform as summer interns and will only return to recruit full-time if their offers are not accepted. In Europe, where one-year MBAs are the norm, this creates a conundrum: often candidates are being interviewed for internships only weeks into their first finance classes. Banks make allowances, but personal study helps. The Vault Career Guide to Investment Banking is a popular interview preparation text. Talking to alumni is even better.

So what are investment banks looking for? In many ways, the same things as all employers: good academics; a clear career progression at a prestigious firm; language skills (increasingly important); and, for some special teams, strong knowledge of a particular industry. But ideally banks want to see something exceptional. Investment banking is an intensely competitive and increasingly commoditised business and banks look for people who will give them an edge.

“We want entrepreneurial ability,” says Gaynor Arnold, a former banker who now heads Lehman Brothers' investment banking recruitment for Europe. “Some evidence from a candidate's life that shows they have pushed themselves outside their comfort zone: perhaps starting a business or even doing something philanthropic.

“We want people who can step into a difficult situation – perhaps dealing with an unfamiliar product or a particularly tough client – and have the personal drive to survive and succeed.”

And candidates need to show they understand this work environment. MBAs hired as first-year associates work gruelling hours (80-90 hours a week even as interns) and have to face starting again near the bottom of the food chain. Importantly, this means getting along with those who have been promoted internally after three years of hard labour as analysts. Candidates who show they are prepared for these demands are obviously more attractive.

Conversely, those with lots of managerial experience or family responsibilities may have their work cut out demonstrating that they have thought about how they will cope with the long hours and initial lack of status.

According to Sandra Schwarzer, director of business school Insead's careers service, some introspection is in order. She says: “If what you really enjoy is managing people, you need to be aware that it is not a big part of most roles.

“However,” she continues, “if you like quantitative analysis and juggling multiple projects and the excitement of being where the action is, you may thrive.”

Regarding quantitative skills, banks clearly require some level of numeracy. If you cannot find a short cut to calculate 12.5 per cent of 64 you should probably look elsewhere.

However, MBAs are not being recruited as quantitative specialists (banks look to PhDs and stars from the natural sciences for these roles). Banking remains a people business and networking is a crucial skill. Not only for the job itself, but so that you can get to know the people you might be working with and understand if the job is for you.

But how to strike the balance between charm and ingratiation? Anyone who has watched a clutch of job-hungry students surround a potential employer at a drinks reception will know this is not an easy balance. A little bit of human courtesy can work wonders: something as simple as asking a glassless recruiter if they need a drink can mark you out from the ravenous crowd.

Reading the headlines, potential business school applicants may wonder whether to make the leap at all. However, the picture may not be so grim. While belts are being tightened, no bank wants to repeat the mistakes of the recent past according to Mark Pettman, a director at Michael Page Financial Services. “In 2002,” he says, “banks let too many junior people go and struggled to replace that capacity in 2004 when the market was picking up.”

This cyclicality could even be an advantage. Those considering business school now are still 18 months to two years away from the job market. In that time some skills, notably risk management, may well become more important, and the market as a whole may dip and turn up.

According to Mr Pettman now might be a good time for MBA study. “You get out when the market is tough and come back later when hopefully things are looking up,” he says.

Time to start downloading those application forms, perhaps?

[GOBLIN]

fair enough!! good argument.