The Scourge of Office Politics in Finance
Internal maneuvering can make or break your career. So why are finance types so bad at it?
When a new general auditor took over at JPMorgan Chase in the early 1990s, he received a greeting card from a fellow executive. “Congratulations on your promotion,” the card said on the front. Then he saw the message inside: “Now watch your back.”
Welcome to the thorny world of corporate politics. Though some people think it’s brains, accomplishments, and know-how that enable someone to move up and snare promotions, the truth is that office politics play a pivotal role in success. Being skillful at internal politics can be as critical for an investment manager as fundraising, for example.
Office politics exist because people are “emotional creatures, biased by unconscious needs, and riddled with insecurities,” according to business psychology professor Tomas Chamorro-Premuzic, writing in a 2014 Harvard Business Review article. Navigating them wears people out, he wrote, and accounts for a “significant portion of work-related stress and burnout.” Office politics are self-perpetuating because “if you are rewarded for playing the game, you surely have no incentive to stop playing,” Chamorro-Premuzic noted. As the best wheeler-dealers rise up, they continue to operate by the rules of the game.
A managing partner at a New York private equity firm has seen the value of office politics firsthand. “After one gets the initial job, social skills separate the wheat from the chaff in high finance,” says the partner, who declined to be named. “For deal makers, politics is everything.”
Yet most executives don’t put mastering corporate politics at the top of their priority lists, according to Patty DeDominic. The Santa Barbara, California–based business coach has counseled CEOs, COOs, traders, and investment bankers. “When the stakes are high, we often have to concentrate on the game with the highest returns,” DeDominic says. “And while most of us grow up learning how to please a boss, we don’t often want to invest time into learning to play the low-return game of office politics.”
But she also notes that relationships are at the heart of deal making. Hence getting along with nearly everyone — clients, bosses, colleagues, underlings — is critical to winning over people and sealing business.
DeDominic calls deal making for most traders and investment bankers the “elephant in the room, which is huge, and office politics the Chihuahua in the room.” Her advice: Focus on the elephant and pay less attention to the Chihuahua.
Few, if any, financial services firms offer workshops explicitly geared toward office politics — which many companies like to pretend they don’t have. But coaching and mentoring refine employees’ hands at inside baseball, DeDominic says. “They call it life skills. Coaching encourages you to use the forces you’ve been dealt to improve your career and benefit your job objectives. You learn to seek people that are naturally collaborative, not predatory,” she explains. “Corporate politics mimic life, and it’s often survival of the fittest.”
The skills required to master office politics are often quite subtle. “You need to be aware of reading people and reading signs,” DeDominic notes. If the staff is going out for happy hour and discussing work and you choose not to attend, you may pay a price by opting out. But perhaps the most important quality, in her view, is having a thick skin.
Envy in the workplace — “someone is getting ahead, and I’m not” — is a classic trigger for nefarious social games, Weaver suggests. “It’s because we tend to look at how we’re doing, comparing ourselves to those around us. And when we see someone else doing better than we are, it makes us feel less than.”
Financiers are acutely attuned to relative performance, versus complex and subjective social dynamics, according to Ben Dattner, a New York–based business consultant. “The market provides instantaneous, verifiable feedback on what things are worth.” So does compensation, which is why nothing vexes a Wall Street type like learning his or her mediocre co-worker got a bigger bonus. Pay aside, money pros don’t tend to go looking for drama. Instead, Dattner says, they learn office politics the hard way when they encounter an organizational snafu: why the software can’t be upgraded, why the organization clings to outdated ways when new methods are more efficient, why the bureaucracy won’t move faster.
On Wall Street as in other industries, mastering office politics can make the difference between succeeding and flopping in one’s career. For example, Dattner consulted at two firms that named interim successors. At one firm, the designated heir stayed in limbo for two years because his boss wasn’t ready to retire. Rather than handle the situation in a controlled or composed way, he kept pushing his boss to move on, asking why he was stalled and wondering when he would be named leader — alienating his boss in the process. The would-be successor stalled his career with his overexertion.
At the other firm, the interim department head did the best job possible, waited patiently, pleased his boss, and eventually earned the top job. “One pushed too hard and lost the opportunity, and the other bided his time and won,” Dattner notes.
Dattner explains that three driving forces rule internal entanglements: power, politics, and personality. “The guy who didn’t get the job didn’t understand part of the power structure, focused on his boss’s personality. If you don’t understand relationships and loyalty, you’ll see it through the wrong lens,” he says.
The traits that lead to success in office politics are extremely complex and nuanced. Dattner identifies them as:
1. being able to revise your view of a situation based on new information; 2. having a willingness to make mistakes and to be wrong and be humble if you do; 3. being open-minded; 4. understanding the firm’s culture; and 5. mastering personal relationships at multiple levels.
Dattner stresses that every firm’s culture is different and that office politics vary. What works at Goldman Sachs may not at Merrill Lynch or JPMorgan Chase, or at a smaller private equity firm.
The goal isn’t mastering internal politics as much as minimizing them, Dattner advises. “In today’s world the reciprocity and successfully navigating politics involve quid pro quos or mutual collaboration. Let’s try to reverse the cycle of negative politics.” In a healthy company people collaborate and one colleague says to another, “If I take ten minutes, I can save you a week’s work,” rather than viewing the colleague as a rival and perceiving that helping that colleague will reduce his or her own slice of the pie, Dattner notes.
Forming “authentic relationships” is key to navigating office politics, according to Shefali Raina, who spent 12 years at Lehman Brothers before launching executive coaching firm Alpha Lane Partners. Don’t make relationships transactional, she says. Instead establish a “real curiosity about people, and what makes them tick. Then approach them to create win-win situations. Go beyond your silo. Be vocal about your accomplishments. Learn to self-promote,” she explains.
Raina counseled one senior asset manager whose in-house reputation was as an “extremely smart but isolated” investor. He followed her advice to reach out across the firm and establish relationships. In doing so he became known as “a person who can lead varied teams and have an impact on his organization,” she says. Handling office politics demands resilience, and this manager succeeded in part because he could take her critique and work with it. Raina has advised some professionals who are reluctant to be judged, which limits their growth.
The first part of thriving in office politics is knowing they exist. Then, Lowry says, focus on accomplishing small tasks. If you know that a managing partner and a supervisor are influencing promotions, ask them to lunch, get to know them, and ask to work on a specific project to prove your strengths. Do what is in your own best interests. And playing the game often is just that, according to Lowry — a point of stark disagreement between him and other experts. In his firsthand experience, most who avoid internal maneuvering “aren’t promoted as quickly as they should be.”
The key to succeeding at office politics is “flexibility and moving back and forth between the need for autonomy and the need to fit in,” psychologist Weaver says. Hence the top employees can be aggressive in one meeting and conciliatory in the next. Those are the ones who thrive.
As Plato remarked, one of the penalties of refusing to participate in politics is that you end up being governed by your inferiors.
Tips on Becoming More Skilled at Office Politics
DeDominic offers these few tips on becoming more accomplished at office politics:
- Tune in to conversations. Really listen, and be present when you’re interacting with colleagues.
- In forming relationships with colleagues, take time to ask a few questions beyond “How are you today?”
- Steer clear of office gossip.
- Watch your facial expressions. Wear a smile when you can, which makes people feel more appreciated.
- Read Dale Carnegie’s How to Win Friends and Influence People.