Bankers are smart... aren’t they?

Any incoming class of bankers will likely be top performers from some of the world’s top schools, resumes filled with perfect GPAs and extra-curricular activities. After jumping through all the hoops of the investment banking recruitment process and meeting its stringent requirements they are the top 1% of the top 1%. Intellectually accomplished, polished individuals.

But would you want a beer with them?

I’m Australian, so whether I want a beer with someone is a natural test for me.

My propensity to want (or not want) a beer with someone has become a pretty good yardstick by which to measure job candidates. Although really, it’s not about beer at all, but a gut reaction to their emotional intelligence (EI), their capacity to be aware of—and control—their emotions and to interpret the emotions of others. It’s an important skill that guides an individual's behavior, thinking, and whether they can recognize feelings beyond themselves. It’s critical to effective communication and relationship management.

Before EI was identified as a thing, researchers were puzzled as to why in the real world those with average IQs could outperform individuals thought to be “smarter”. Once EI gained traction, it began to make more sense.

Business leader Patrick Lencioni argues that “Not education. Not experience. Not knowledge or intellectual horsepower. None of these serve as an adequate predictor as to why one person succeeds and another doesn’t. The answer almost always has to do with emotional intelligence.”

The last time I participated in a campus recruitment program, I recall objecting to a preferred candidate. At the time I said, “I wouldn’t want to have a beer with him” but what I really meant (and couldn’t put my finger on) was “I don’t think this candidate has a high enough emotional intelligence to excel on this desk. Especially given the required level of client interaction.” Sounds a little better than talking about having a beer.

You probably know exactly what I mean. I bet there was a banker you once worked with who graduated top of their class, but couldn’t think abstractly. Who couldn’t think about things from the client’s perspective or adapt to new challenges; something was you looked forward to the day they eventually moved over to private equity.

Typically, during the recruitment process, a bank uses a number of proxies to figure out if someone will be a good fit. High marks, a good school, outside interests etc. all point toward intelligence and hard work, but the process of figuring out if someone will fit with the team and the client is still pretty nascent. I know some firms use online tests (although the right answer is usually obvious and if you can’t get it, that probably says more about your intellectual capacity than emotional), and during Superdays, where a candidate can meet with seven or more people in a day, it tends to show capacity for small talk and alertness more than anything else.

Additionally, it makes you wonder if, as important as EI is, should more be done to teach EI skills? After all, to be a trusted advisor to clients, bankers need every tool they can get.

Since leaving investment banking and forming Pellucid Analytics, I have been able to design a recruitment process from scratch. While raw intelligence is still a base requirement, you’d be surprised at how different the recruitment process can be once you incorporate academic research about qualities such as EI into the process. It’s something we’ve taken into account and as such hire people who display strong emotional intelligence. I’ve found this leads to effective interdisciplinary partnerships, clear communications, and a stronger sense of team, which in turn means these people tend to stick around.

What are your thoughts on EI? Is it something you think should play a larger role? Email me at