"One day with an expert is worth a thousand of training" Japanese proverb
The City hardly changed for over 250 years it was deregulation, known as Big
Bang that set the City on an on-going course of massive change. Starting in 1986
the change process has hardly paused for breath and in fact is accelerating,
bringing enormous challenges for managers. Are they up to it?
Mostly, management remained the same from my entry into the City in 1969
until Big Bang in 1986. At that time I had started to learn about technology.
Technology in the office in 1969 amounted to the odd Comptometer (a kind of
manual abacus) and the electric calculator.
In the mid-seventies the London Stock Exchange introduced Talisman as a
central settlement system between Brokers and Jobbers and the automation of
matching bargains between the two began. Other system changes, introduced by the London Stock Exchange were Institutional net settlement and in the front office SEAQ International; the point being that I had to learn about technology
innovation and more importantly how to manage implementation. All this on top ofmy usual duties. A hard schooling but extremely beneficial in the long term, as
When the Banks entered the market in Big Bang, they inflated salaries and
bonuses and changed the management structure. This resulted in a dilution of
management's decision making capability and the beginning of the many managerial problems that we have today.
The industry lost experienced managers in droves, on the back of golden
goodbyes handed out by the banks, who did not understand their value to the
business, they had now entered. In the main they were replaced by people that
did not have the in-depth knowledge and range of honed skills that was required.
Managers were either assigned from the banks that had bought the Broker or
Jobber (we now call them Market Makers) or by people quick to recognise the
gravy train, in the age of the yuppie. It was during this phase of the City that
most of the bad seeds were shown and why there has been a twenty year period of major mistakes and catastrophes.
All of a sudden firms had rooms full of managers; all managing parts of the
process, but on the whole without an understanding of the complete process, or
with the capability to make decisions without referral to other senior managers.
Unfortunately, in many cases these Senior Managers also did not have a much
better understanding of the whole process.
The majority of this army of managers, had assistants and thus we entered the
age of the Director of this, that and the other, or in American based companies
the VP and all the other various job titles that arose in the City.
Unfortunately, more managers does not mean better quality or better management, in the way firms and the City is run.
Too many cooks spoil the broth and this has never been more the case than in
the Financial Services. Delegation is often said to be the art of good
management. However, delegation is a skill and requires confidence and the
capability to accept responsibility. In far too many cases delegation is either
used politically within a firm or as a basis of self-protection.
The need today is to give managers the power to make decisions and take
responsibility to move away from the committee consensus management structure that has plagued financial services for years. In this way we could expect that decision making would become more vibrant and accelerate the introduction of change, innovation and
the search for solutions to problems. We would at least know where the buck stops!