You Were Brilliant at the Bank. But Did Anyone Teach You How to Manage?
- Joanna Floyd BSc, MSc
- 15 hours ago
- 8 min read
The investment banking world produces some of the sharpest minds in finance. It also produces some of the most undertrained people managers we have ever worked with.
That's not a criticism. It's a structural problem.
In a large investment bank, HR does a lot of the heavy lifting by level. There are frameworks, calibration processes, promotion committees. The institution holds the culture together. When you're an Associate or a VP, someone else is managing the performance process. I know this because for a time, that someone was me. Someone in the centre is running the feedback cycle. The system carries you.
Then you move to a 60-person private equity firm. And suddenly, you are the system.
We work with a lot of people in exactly this position. They're smart, driven, and technically exceptional. They've been rewarded for precision, speed, and output. And they're now managing juniors who are quietly disengaging, or leaving, or doing just enough to survive.
The managers are often baffled. "I give them feedback," they say. "I'm available on Teams. What's the problem?"
Here's the problem.
The Culture You Absorbed Is Not the Culture You Want to Build
Investment banking is a high-performance environment that, by design, manages through pressure. The feedback tends to be corrective. The communication tends to be urgent. The relationship between senior and junior is often transactional: produce the work, get it right, repeat.
This isn't malicious. It's a culture that formed under conditions of extreme intensity, long hours, and high stakes. And it works up to a point.
But the habits it builds are not management habits. They are survival habits. And when people carry them into smaller firms, the results follow a predictable pattern.
The junior analyst who receives nothing but critical redlines on their work doesn't think "I need to improve." They think "I'm not good enough." So they work harder. They stay later. They triple-check everything, not because the work demands it but because they're trying to outrun the next correction. They're in the office at 1am on a Tuesday not because there's a live deal but because leaving on time feels like evidence of not caring enough.
The cruel irony is that by the time the real crunch comes the deal that genuinely needs everyone at full stretch - they're already running on empty. The intensity that was supposed to signal commitment has quietly hollowed them out. And at some point, the body and mind simply stop cooperating. Burnout doesn't announce itself. It accumulates, quietly, in all those unnecessary late nights that nobody asked for but nobody stopped either.
This is backed by decades of research. Baumeister et al.'s (2001) landmark paper on the asymmetry between positive and negative experiences found that negative feedback has roughly three to five times the psychological impact of positive feedback. John Gottman's research, originally in relationships but now widely applied in organisational settings, suggests a ratio of at least five positive interactions to every one critical one to maintain a stable, trusting dynamic.
Most finance managers we work with are running at about 1:1. Some are running negative.
What Fear Does to a Junior Team
When people are waiting to be told what they got wrong, something shifts in how they work. They stop thinking creatively. They double-check everything, not for quality but for self protection. They ask for sign-off on decisions they could make themselves. They fill Teams messages with caveats.
This isn't weakness. It's a rational response to an environment where the risk of being wrong outweighs the reward of getting it right.
In psychological terms, this is the difference between a threat state and a challenge state. Research by Blascovich and Tomaka (1996) on cardiovascular responses to stress found that people appraise situations differently depending on whether they feel they have the resources to meet the demand. When the environment signals "you will be caught out," people appraise every task as a threat. Performance suffers. Thinking narrows.
The irony is that the managers who most want high-quality output are often the ones creating the conditions in which it is least likely to appear.
The Micromanagement Trap
Here's something we hear often from mid-level finance professionals who've moved into smaller firms: "I just need to make sure it's done properly."
Of course you do. The stakes are real. The clients are paying. The work has to be right.
But there's a difference between maintaining standards and managing every step. And the line between the two is worth understanding.
Micromanagement communicates one thing very clearly: I don't trust you. It doesn't matter how it's framed. When someone's work is checked before it's had a chance to breathe, when every draft comes back covered in edits, when every decision requires approval - the message lands as distrust. And distrust is corrosive.
Edward Deci and Richard Ryan's Self-Determination Theory (1985) identifies autonomy as a core psychological need. When it's absent, intrinsic motivation declines. People stop caring about the work and start caring about compliance.
The fix isn't lowering your standards. It's shifting where your oversight lives. Check at the start brief clearly. Check at natural milestones. And then let the work happen.
Two Examples Worth Sitting With
Example 1: Tom, a new VP at a mid-sized PE firm
Tom came from a bulge-bracket bank where everything ran on tight turnarounds and senior sign-off at every stage. He brought that model with him. His analyst, Rosa, was capable and keen. But within three months she was producing work that was technically accurate and completely devoid of original thought. She'd learned exactly what Tom wanted and was delivering it, no more.
Tom couldn't understand why her work felt "flat." In a coaching session, he described his process: send Rosa the brief via Teams, review the first draft heavily, send back with tracked changes, review the final. He'd never had a conversation with her about the purpose of the piece, what she found interesting about it, or what she thought a good answer might look like.
When he changed that starting with a 15-minute conversation, asking for her take first, commenting on what was working before what wasn't the quality of Rosa's work changed within weeks. Not because her ability changed. Because her relationship to the work did.
Example 2: The same manager, six months later
By month six with Rosa, Tom knew her work well. He trusted her judgement on certain things. He'd seen how she approached problems. At this point, the close review process he'd used at the start would have been insulting.
Good management is not a fixed setting. It's calibrated. With a new hire, you check in more, brief more carefully, give more context. With someone whose work you know and trust, you delegate more fully, get out of the way, and use your oversight time for the moments that genuinely need it a new type of analysis, a high-stakes deliverable, an area where they've told you they're less confident.
This is what Hersey and Blanchard's Situational Leadership model (1969, refined in 1977) describes so well: the right level of direction depends on the person's competence and confidence in a specific task. High competence, high confidence delegate. Low competence or new territory direct and support. The mistake most managers make is picking one mode and staying in it regardless.
The Teams Problem
We need to talk about this directly.
Written messages are not management. They are transactions. They carry no tone, no warmth, no reading of the room. For a junior who isn't sure whether they're doing well, a Teams message saying "see my comments" lands very differently from a two-minute conversation saying "good structure on this, let me show you a couple of things I'd tighten."
Face time, even brief face time, matters. Research on workplace belonging consistently shows that people who have regular personal contact with their manager feel more confident, more committed, and more willing to raise problems early before they become expensive.
If your primary mode of feedback is written, you are leaving most of the information out.
Checking In Is Not Soft. It's Strategic.
One thing we encourage managers to do is separate two distinct conversations. The first is about the work. The second is about the person.
Before you brief someone on a piece of work, spend 90 seconds on the second conversation. Not a lengthy check-in. Just: "How are you fixed this week? Anything on your plate I should know about?" It signals that you see the person, not just the deliverable. It also gives you useful information. If they're already running flat out, your expectation of a turnaround by Thursday might need revisiting.
This isn't being soft. It's being a competent manager. The research on psychological safety Amy Edmondson's work at Harvard is the most cited here - consistently shows that teams where people feel safe to speak up make better decisions, catch more errors early, and perform more consistently under pressure.
You don't build that by being available on Teams. You build it in small moments, consistently, over time.
What to Unlearn. What to Build Instead.
If you've come from a large institution, some of what you learned about management is valuable. Rigour, standards, pace these matter. But some of what you absorbed wasn't management at all. It was the institution doing the managing for you.
Now you need to do it yourself. That means:
Unlearn: Feedback is corrective by nature. Build: A ratio that actually sustains trust. Catch people doing things right, and say so explicitly.
Unlearn: If I don't review it closely, it won't be good enough. Build: Clear briefs at the start. Check-ins at milestones. Full delegation for people whose work you know.
Unlearn: My job is to get the work out. Build: My job is to grow the people who get the work out. That's a different role, and a harder one.
Unlearn: Teams messages are communication. Build: Teams messages are logistics. Real communication is a conversation.
The Leadership Opportunity Here is Real
Mid-sized firms like PE houses aren't just smaller versions of banks. They're different ecosystems. The people who thrive in them are the ones who can get excellent work out of small, lean teams over sustained periods of time. That doesn't happen through pressure alone. It happens because people feel capable, trusted, and invested in the outcome.
The managers who crack this who learn to give real feedback, delegate properly, and treat juniors like the intelligent adults they are don't just retain their teams. They build reputations that precede them. People want to work for them.
That's the leadership track you're on. The technical skills got you here. The people skills are what take you further.
Five Key Takeaways
Investment banking trains brilliant technicians. It does not reliably train managers. The institution holds too much of that load.
Fear-based management doesn't produce excellence. It produces exhaustion, creative risk-aversion, and eventually burnout.
Micromanagement signals distrust, and distrust kills motivation. Shift your oversight to the brief and the milestone, not the middle.
Your approach needs to match the individual and the task. More direction with new hires and unfamiliar territory; more autonomy with established, trusted performers.
Written messages handle logistics. Conversations handle management. The two are not interchangeable.
References
Baumeister, R. F., Bratslavsky, E., Finkenauer, C., & Vohs, K. D. (2001). Bad is stronger than good. Review of General Psychology, 5(4), 323-370.
Blascovich, J., & Tomaka, J. (1996). The biopsychosocial model of arousal regulation. Advances in Experimental Social Psychology, 28, 1-51.
Deci, E. L., & Ryan, R. M. (1985). Intrinsic Motivation and Self-Determination in Human Behavior. Plenum.
Edmondson, A. C. (1999). Psychological safety and learning behaviour in work teams. Administrative Science Quarterly, 44(2), 350-383.
Gottman, J. M. (1994). What Predicts Divorce? The Relationship Between Marital Processes and Marital Outcomes. Lawrence Erlbaum.
Hersey, P., & Blanchard, K. H. (1977). Management of Organizational Behavior: Utilizing Human Resources (3rd ed.). Prentice-Hall.
At The Work Psychologists, we work with finance professionals who are ready to become genuinely excellent managers and leaders. If you're making the transition from a large institution to a smaller firm, and you want to build a team that performs because it wants to rather than because it has to, we'd love to talk.
Joanna Floyd BSc, MSc, is a Business Psychologist and consultant at The Work Psychologists, an award-winning business psychology consultancy based in London. Joanna's career started in investment banking before she moved into in-house recruitment and programme management. She then trained as a business psychologist which means she brings genuine commercial experience to everything she does with leaders and organisations.  She specialises in leadership development, assessment, and helping clients translate psychological thinking into practical business impact. Alongside her consulting work, Joanna sits on the board of Canadian fintech company Orion Digital. She works from a clear belief: that the best work sits at the intersection of business reality and psychological depth.