When Investment Banks Kill

Traditionally, investments bankers were always easy marks for derision. The affectations, braces and bordeaux and easy to see and easy to mock. But, the basic equation made them advisors and the goals of the most of the ambitious were to one day be a principal of the deal or transaction. There was much to admire in their counselor role--in fact, we once created a brand strategy based on the thought that our client bank were 'counselors to kings' and communicated their ability to enable the vision of a CEO through intellect, creativity and muscle. With the client front-running, technology and proprietary trading which dominate all the major houses, this isn't even a strategy most firms aspire to. Yet, this is still the formula of a successful banker that CEOs and CFOs look for and need.

But, where are these counselors to kings. Bankers focused on being long-term advisors, enabling the vision of good management and the growth of companies and the creation of value for the society are not readily apparent in the public debate. In the chaos of the corporate investment banking world there is huge churn--the bulge bracket firms compete with clients as often as they service the. Lehman, Bear and Merrill all gone. Middle market mainstays like Jefferies have continued to grow. (Un)surprisingly, they are lead-managing major deals with the likes of Goldman-Sachs and Morgan Stanley and at this scale and with a newly developed appetite for the bulge, it's not likely that they can offer the same type of entrepreneurial creativity and tenacity to smaller companies on the way up. The boutiques are apparently consigned to developing their brands and businesses one deal at a time and flogging themselves on blogs and chat rooms and conference rooms. They are small and they seem smaller. Clients in moments like these are also whipsawed by the chaos. There are more choices and more regulations and more public opinion to be mindful of. There are fewer names which bring any certainty of success. Many firms have given up for the time being on communicating market relevant brand values and have avoided taking any leadership positions on the issues that trouble us. While obviously politically incorrect for any CEO to admit ignorance of even being mystified, the fact is that no one has a clear handle on the strategic possibilities available through investment banking and corporate finance. Everyone is grappling with a mountain of conflicting data and opinions. And added to that mix is the fear that while your banker is selling you, he's also selling you out.

Every C-level manager at any significant company has even more reasons to hate the investment banker. There are too many opportunities in too many situations for the banker to exert his firms agenda over the clients. The power and scale of the bulge bracket firms far outstrip all but a select few of the global businesses looking to acquire, merge, capital raise or otherwise strategically plan finance. Every one of their private equity practices can compete with most any enterprise. The advisors are now the adversaries.

This is one of those moments where brands are made or broken. The current economic and cultural climate is focusing eyes and ears on the financial services industry. The focus right now stems from a wide variety of industry factors--flash trading, dark pools, CDOs, the mortgage meltdown, the bailout and from a confluence of related forces--ill-informed journalists and bloggers looking for hits, naive and pandering legislators looking for votes and others. But this is probably a transformative moment where some of the traditional models of banking and finance and the value chain between bankers and clients is essentially changing.

Like any inflection point, there are opportunities for new losers and leaders to surface from the chaos.

Out of this maelstrom, a brand is surely to rise, addressing the truths (in so far as there are any) of this crazy marketplace. As investors have become less and less empowered, they've become more and more sophisticated and understand, whether at a micro level or more intuitively on the macro, that the game has changed and that people are clinging to old behaviors in desperation. It isn't surprising that G-S runs ads about their philanthropy during bonus season. Most large firms won't take a public stand, because they're already too complex and inter-connected. Most small firms want to act like big firms. And, while much of marketing is exhausted, the need for fully realized brands that are competitive and relevant, screams out.

The 'white space' for a competitive brand in this environment is to address reality. Call the fear out. Leadership brands create the dialogue, they address issues and become meaningful. Straight talk through a combination of market validated performance and intellectual capital that leverages the experience and perspective of their senior management. Heed the fact that everyone is tired of the bullshit. Understand that clients require someone on their side, working their agenda. Until, the machines began trading without any human brainpower or supervision, the most valuable thing on Wall Street was integrity and creativity. If the firms in this industry allow the creativity to be focused only on faster and darker machines, it will be at the  expense of the integrity. The machines don't have judgement. The don't have vision, understanding and they don't enable a CEOs dreams. They only trade.

Tiger Woods: I'm Shocked. Shocked To Learn There's Gambling In The Casino' originally posted 1/15/10

Oh the hew, cry and shock we've shown at being clued into Tiger Woods' lifestyle. Of the many aspects of this that gives one pause, a few additional comments: 1. his arrogance and omnipotence: a thirty-something who's made over a billion dollars. His world is a bubble floated exclusively by and for the people with only one job--service Tiger. Yes Tiger. That's amazing Tiger. You're right Tiger. He goes nowhere, speaks to no one, buys nothing without having first had someone set it up for him. 2. the cocktail waitress and the party planner. We've devolved to the point where celebrity is so all-pervasive that celeb service workers are transacting in the glow themselves. Could anyone have predicted that we'd see headsets and clipboards become status symbols? 3. pro athletes all have groupies. See Claude Raines' 'Casablanca' title quote above. Ever been in the lobby of a hotel where an NBA team is staying? Ever read a rock band tell-all book? Ever read People? The Star?US? Of course we have. But the pious and sanctimonious copy pouring out of mass media is because moral shock is the only handle any of them have been given as a lead to cover the story. Greater minds than mine are required to parse why bottom-feeders like these groupies, like TMZ or Radaronline can assume outrage when their brands are based on their own sleaziness. However, the outrage at Woods is fake and will only last til the audience gets bored with the angle. Because it's not the sex--see Kardashian, Hilton, et al who've used scandal to move up the food chain. It's not marriage--see Bryant, Spitzer. And I don't think it's this great disparity between the 'nice young man' imagery of his branding. 4. talent drain and laziness. The media could find another way to cover this. Woods' handlers could try strategy other than 'he's using this time to work on himself and his family to repair the blah blah blah and we ask you to respect the privacy blah blah blah'. The surfers and the bouncers who make up the reporting staff at TMZ don't have the ambition or the skills to look for a story. The current methodology is to get in the way of the story--or the SUV on the way out of the club/hospital/barneys. Tiger's management, and given the size of the Woods business, is large, highly paid and has access to anything is stuck on a playbook that's become a reflex for a celebrity in trouble. A Counter-Intuitive Strategy Approach the public with the truth. Understand that they viscerally understand the way pro sports and entertainment work. Explain that in the life of a Tiger Woods, these situations are everywhere. That groupies have been part of this world and handlers get paid to smooth it out since people have been famous. That it's not only Woods is behaved scandalously, it's the reporters, PageSix, his fellow players, the networks, the law firms and the management companies. Woods already lost the Accenture deal because the gap between the 'ideal' and the news was too great. More importantly than any single endorsement deal is that this whole fandango revealed a fatal flaw in the Tiger brand strategy--no authenticity. In the culture where almost everything is plastic, authenticity is the most valuable commodity. The only chance to get some back is to suck it up and face the world with the real story. What would the lead to the story be then?