Why is this interesting? - The Hazing Edition

On banking, rights of passage, and modernity

Colin here. There’s been a lot of chatter lately about Industry, the HBO series that follows a group of graduate intern hopefuls throughout their travails at a fictional bank in the City of London. Some of the stories are typical to young professionals in a major city: drinking, parties, drama, and so on. But some of them are more nefarious and show a culture of hazing that still exists despite a move for financial institutions to be kinder and gentler.  

Alice Fulwood, currently the American Finance Editor for The Economist, found that watching the show brought back a flood of memories, not all pretty:

When a character spread his company-branded fleece on the floor of a toilet cubicle to take a nap instead of returning home to sleep, I sighed with recognition. I remembered that choice: should I waste over an hour travelling back and forth for two hours’ sleep in a real bed, or kip on the bathroom floor for three? I, too, picked the loos – mostly because I was afraid that going home would mean I would turn up late the next day.

Without going into spoilers, the show does touch upon the cost of this frenzied pace: countless hours working on a pitchbook, and then the nighttime hedonism that qualifies as either client entertainment or team bonding. The burning of the candle at both ends serves as a bit of a hazing ritual, alongside menial tasks like buying salads for your trading desk, that come part and parcel with the gig. 

In some cases, though, this kind of work approach can turn deadly. Such was the sad case of a City intern who died in 2013 after working three nights in a row flat out. According to the Guardian, Moritz Erhardt, a promising candidate quite literally worked himself to death:

Keen to impress to the last, he worked three nights in a row. Over a 72-hour period, he got a taxi back from the office to his flat in Bethnal Green, east London, at around 5am each morning. He would then shower briefly before returning to his desk. This exhausting ritual is known in banking circles as the "magic roundabout" – so-called because the taxi driver will sometimes wait outside while an intern washes, puts on a fresh shirt and re-emerges blinking in the dawn light.

Why is this interesting? 

In some fields, it is true that you need to show you can cognitively function under stress or duress. And so the sleep deprivation and stress inoculation for aspiring doctors or people wanting to join the infantry might be a necessary evil. Ticking the box that you won’t fold under pressure or lack of sleep is important. But even this is a debate that is very much evolving, and even seasoned special operations soldiers are questioning the balance of how much is necessary, and how much of it is an outdated hazing tradition.

When it comes to banking, it seems like most things fall into the hazing tradition category. There’s nothing constructive or even corrective about the conditions. Often, the ones that are most sleep-deprived are the people doing the mundane, hyper detail-oriented work in the spreadsheet cells. And doing complicated work building complicated models might not be best suited for the intern who has been on a combination of exhaustion and nightly booze-ups. Sure, there’s someone more senior that looks over the work, but, to this non-finance observer, it strikes me as fragile. 

The actual question in this instance is: does the same hazing need to be handed out to people who aspire to move money around? Or is it a vestige of the age-old “it happened to me, so I will continue the tradition?”

In a Quora thread, a former banker outlines the effects in granular detail:

On little to no sleep you become much less efficient, but you can still very much get plenty of work done. As others have already mentioned, thoughtful/qualitative work becomes difficult to impossible, but process-type work is still doable. On low sleep your thoughts are slower, you have to think through concepts multiple times, reread emails, etc. and are much more prone to simple errors, e.g. model adjustments being pre or post-tax and being added or subtracted. It’s tough but if you go slower and take your time you can still output quality work. Your associate will also be aware of your lack of sleep, so he / she will usually go to extra lengths in reviewing your work to make sure there’s no errors.

And as we know, lack of sleep creates cognitive impairment that is akin to being drunk, or even worse. It begs the question: do the clients know that their models are being built by people frayed to the bone? Is this type of approach to intellectual labor sustainable? At what price is tradition? (CJN)

Newsletter of the day:

Friend of WITI Noah Wunch is in the process of launching Ruby, which is a nicely designed and packaged hibiscus water. He’s launching a newsletter that we have found to be filled with fresh links that have evaded our finely-tuned radar. Noah is truly attuned to the good stuff, so we both support him, and his new product. Sign up for it here. You may notice we love supporting entrepreneurs and new brands in WITI, so if you have one, reply to this email or drop us a DM on social. (CJN)

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Thanks for reading,

Noah (NRB) & Colin (CJN)

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