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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
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
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
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This document was uploaded on 02/19/2014.
- Spring '14