a. Week 1 McKinsey Connecting Employees in IBs

Companies in a variety of sectors from biotechnology

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Unformatted text preview: rganizations. Companies in a variety of sectors, from biotechnology to construction, have been using these well-established techniques to track and replicate high-performing networks, to help employees emulate the collaborative behavior of other colleagues, and to serve customers more effectively. But investment banks have only recently started to learn the power of that approach. Banks should carefully tailor their use of such ideas to the industry’s context and circumstances. Collaboration is as hard as it is desirable in all knowledge-intensive businesses—and investment banking is a knowledge industry par excellence. Yet the rewards for looking beyond the organizational chart to unlock value can be considerable. The need for silos The first step is to recognize that silos are here to stay—and not necessarily bad. Three key factors have reinforced the building of silos in leading financial institutions. First, the increasing complexity of products demands greater specialization. Unlike the bankers of old, few of today’s practitioners can single-handedly understand, let alone solve, the whole range of a client’s problems. Banks compete on the depth of their intellectual capital, and in most markets today that calls for people with deep, specific skills and relationships. Second, these institutions are now so large and complex that people working for them just don’t know one another. The number of employees at even the more specialized institutions, let alone the large universal banks, has often grown three- to fivefold over the past 15 years. The silos themselves, routinely organized by geography or subproduct, have thus become huge and complex. Even senior 1 managers sometimes lack a full understanding of what the franchise can do. At most investment banks, the annual managing directors’ conference, far from helping to create a shared understanding, often entails a series of predictable presentations and cocktail receptions. Typically, it has little lasting impact in building genuinely deep professional ne...
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This document was uploaded on 02/19/2014.

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