NEW YORK, Sept. 14, 2011 /PRNewswire/ -- Speculation flourished recently about who is going to run the corporate and investment banking business of a global bank that announced plans to elevate the head of that business to co-CEO in May 2012. Early focus on succession a level below CEO demonstrates progress compared to 2008, when bank boards scrambled to fill even the top spots vacated during the mortgage crisis.
However, according to Heather Evans, president and chief strategist of True Color, the challenge of finding qualified candidates is almost as hard now as three years ago, largely because of the complexity and cyclicality of today's financial instruments.
"The degree of specialized knowledge required to manage individual sales and trading businesses makes it almost impossible for managers to gain the breadth of product, client and management expertise necessary to run the global markets divisions of these banks, which is where much of the risk lies," says Ms. Evans, who today announced the launch of http://www.truecolor.net, which will deliver client insights exclusively for sales, trading and financing managers at bulge bracket firms.
Global markets division profits are generated by roughly 50 business units run by autonomous producer-managers, usually a sales head and a trading head. Each business unit has its own group of complex products and trades with highly specialized clients. Although business units may share client organizations, the individuals they deal with are generally distinct. The producer-managers report up to a thin management layer, each member of which usually oversees just one dimension of the businesses that report into them via a loose matrix. These managers one level below the head of global markets rarely stray far from their original product expertise, so moving up is a big leap.
Market cyclicality adds to the challenge of developing and identifying managers to promote. As anyone who follows them knows, markets for various products and regions swing wildly and out of sync with each other. This is good for global markets businesses overall, since diversification tends to even out the impact of these swings on the business as a whole but it makes evaluating managers particularly difficult.
"Until recently, it has been almost impossible to tell how much of a business's success is the result of good management and how much is attributable to a strong market for the product," says Ms. Evans of True Color. "Often, managers are promoted because theirs is the product du jour."
During 10 years as a senior global markets executive, Ms. Evans pioneered tools that add value at the business unit level while giving senior managers greater transparency into the businesses that report to them. Today, she publishes articles at http://www.truecolor.net and provides consulting services to global markets managers looking to get a leg up on their competition by using these analytic tools, usually starting with custom client feedback programs.
"The global markets divisions that embrace client strategy and analytics, along with state-of-the-art risk analytics, will empower managers to understand businesses across products and regions, nurturing talent with the capabilities necessary to manage the complexity of today's global banks," says Ms. Evans.
About Heather Evans, President & Chief Strategist of True Color
Heather Evans has advised bulge bracket business heads on their client strategies, working as both an internal manager and an external consultant, for more than 15 years. She is a business visionary and an expert at developing and applying leading-edge analytic tools to derive money-making client insights.
As Global Head of Client Feedback at Morgan Stanley Institutional Services, Heather advised the heads of all equities and fixed income business units around the world on how to increase their market shares and profitability. The global head of fixed income required managers to prepare business plans based on Heather's recommendations; the division's revenue increased 41% the following year.
Heather subsequently implemented revenue-driving programs as a member of the senior leadership teams of Morgan Stanley Prime Brokerage and Merrill Lynch Institutional Equities when each was a market leader.
Heather began her career in mergers and acquisitions at Morgan Stanley and Bear Stearns, where she became the youngest-ever investment banking vice president. She received her AB (Phi Beta Kappa) and MBA from Harvard University.
SOURCE True Color