Junior bankers are not viewed as long-term investments, but this does not mean that the relationship entirely revolves around economic expedience. The relationship between junior and senior bankers can be rather symbiotic when both parties recognize value in the relationship. While junior bankers rely on senior bankers for recommendations and other help landing their next job, senior bankers see this role as an opportunity to both motivate current employees and develop relationships with potential sources of future business. However this is done on an individual basis by more senior bankers who see this as an opportunity to build their personal relationships (which translations into individual success and compensation) rather than a formal firm program.
This is definitely a major issue for boutique banks. I’ve seen many bankers who developed their careers inside boutiques struggle to successfully generate business after being promoted to Managing Director, as they never had access to a large firm’s institutional clients. Greenhill deals with this largely by hiring outside talent with existing relationships. The ratio of internally developed senior bankers is much lower than at competitors. Of course the risk with this is that you must remain successful in recruiting talented senior bankers whose clients are loyal to them rather than their previous employers.
Keeping mid-level employees is definitely challenging. The way Greenhill handles this is by having very few midlevel employees (starting with hiring small associate classes) and promoting those who have star potential to management positions. Although the firm has 75 Managing Directors (most senior position), the firm only has 20 Principals (second most senior). Further, in a given year only about a third of those Principals will come up for promotion. However, two of the firm’s most senior managers, its President and CFO, are relatively bankers who started at the firm as associates. Whereas Managing Directors hired laterally are hired primarily for relationships and are allowed considerable autonomy and financial upside, internally developed talent have tremendous opportunity to take on management roles in the firm and are rewarded commensurately.
This is really interesting. I was familiar with Paddle8 but did not know about their about their policy of not disclosing sale prices or that they verify works via uploaded photos. Although small relative to the major auction houses, Paddle8 has become somewhat dominant as an online platform for charity art auctions. Given the often limited audiences actively browsing these auctions, I imagine the lack of pricing disclosure was extremely helpful getting artists comfortable with having works listed on the site. I would be very curious to learn more about the photo validation process, how costly it is and if they have any automation tools that help expedite the process.
Really interesting! I had no idea Alinea developed their own ticketing platform, though I am a huge fan of its implementation at Next. I think variable pricing is a great way to optimize demand. When I ate Next over the summer with a few friends, we opted to eat at 8pm instead of 7:30pm as it was equally convenient for us but saved $30 per head. I find it amazing that more restaurants have not played with similar models, choosing to rely on an what is effectively a glorified cost+ pricing model. The standard, antiquated pricing model is totally detached from the true drivers of demand (when/where people want to eat, not which ingredients are used) and supply (fixed restaurant capacity). It’s absolutely ridiculous that so many restaurants blindly follow a model that yields months-long waitlists for tables on Friday and Saturdays night and empty tables throughout the week. Hopefully more restaurants will join Alinea in seeing the light!
What an awesome business! Sounds like a cash cow once it has a sizeable established footprint in a market. Who would have known that elevators are essentially sold under the same business model as printers/print cartridges? This is a really cool example of a business that maintains a competitive advantage by vertically integrated production and developing/employing proprietary systems that cannot be serviced by 3rd parties. Do you think the risks of entering markets with weak IP protection are serious potential threats to Schindler’s maintenance focused business model, or do you think the elevator market is too niche to attract serious reverse engineering efforts?
Just reading this has made me hungry and sad that I’m not currently in LA. It was really interesting reading about the interplay of their marketing a simple, fresh menu with their integrated supply chain. I’d love to learn how they arrived at their 500 mile maxim (is it based on a day’s drive?) and why they decided to unofficially break it for certain locations in Utah. Also, I never focused on the fact that In-N-Out specifically stocks a few ingredients solely for certain Secret Menu orders.