As anyone with experience of the hedge fund industry will tell you, one of the biggest signs of impending trouble for a portfolio manager is “thesis drift” – the phenomenon where the investments stay the same, but the reason for holding them changes. On similar grounds, the argument that bankers need to return to the office for the good of the corporate culture and to train juniors might be more convincing if it had been made two years ago. In fact, justifications have gone on a speedy drift through “technologically impossible”, “compliance won’t allow it”, “ you need the buzz and communication of the dealing floor” and “well trading’s one thing but nobody will do an M&A deal over Zoom”, before ending up where they are now.
Rich Handler and Brian Friedman’s latest Leadership Letter is a little bit more emotionally intelligent than the run of the mill, addressing itself to the senior MDs and recognising that for many of them, “the break from endless road warrior travel and monotonous commutes has given many of us a rebirth in terms of energy and excitement”. The Jefferies CEO and President promise their rainmakers that they “will never ask any of you to go back to the way things were (pre-COVID) and miss the chance to have a reasonable balance in your life”. But they want people to show up for “critical mass days”, for the sake of the kids.
The letter is an appeal to empathy, saying that the mid-level and junior bankers “justifiably feel abandoned” by the lack of physical presence of their superiors, and that even though the MDs have demonstrated that they can be effective and efficient from their home office, they need to come in and be positive role models. Handler and Friedman have been leading by example, “traveling extensively to our various offices around the globe, enjoying our industry conferences, and spending a lot of time with clients”, as well as having lunches, meetings and dinners with teammates. They end up concluding that getting more people back in the office is good for everyone’s mental health and that it’s the selfless thing to do.
It’s a case that deserves to be taken seriously. But in all these cases where you have C-Suite executives talking to senior MDs about what Vice-Presidents need, it’s hard not to wonder whether the high value placed on in-person contact might be a mixture of projection and “fresh paint syndrome”. Just as the Queen of England presumably thinks the whole world smells of fresh paint, of course Rich Handler mainly has productive, inspiring and energizing experiences when he meets his colleagues in person. They’re on their best behavior and they’re trying to impress the CEO!
Perhaps the most interesting thing, though, is that CEOs are now realizing that they are going to have to sell the case for returning to the office, rather than just issuing an order. And that the argument now is over getting people to respect “critical mass days” and come in reasonably often, rather than whether hybrid working is going to be tolerated at all. Even real skeptics like David Solomon at Goldman Sachs are now admitting that full return to the office might take years.
Daniel Davies – Read more on efinancialcareers.co.uk
