We were returning from a meeting with the treasury. I was accompanying our Group Business Head, the boss of my boss. He made a casual comment, then, almost 10 years back, the crux of which, I remember quite clearly. He had said referring to someone in treasury that they are grossly overpaid. Their bonuses come from profits they make on dealing in securities, but the profits come from market movements, rather than their decisions. They manage a large portfolio of investments. A small fraction of a percent gain results in huge bonuses. Losses can often be attributed to the market. He also, perhaps, mentioned that it was unfair – unfair to those in other parts of the bank, who struggle harder, take real decisions, and face sterner consequences.
That guy in treasury is representative of many others in the corporate world, whose salaries and growth aspirations have to be met out of interests of customers, other employees, shareholders and even the larger society. These sharks are commonplace nowadays; the number has risen over the years and is rapidly rising.
They’re not difficult to identify at all, especially by someone at the top with sharp senses. So often, during meetings, at conferences or even as one passes by, this guy with sharp senses must be noticing this shark and thinking to himself, “If this guy wasn’t around, we’d have saved 5 mn!” But 5 mn is just the direct cost of this shark...the derivative costs are much higher.
Financial impact apart, the presence of such sharks is huge dent in the work culture and work ethic. It pulls down those who work with him – thus costing an opportunity. The sharks generally tend to build an army of mediocre subordinates around themselves, thus further denting all of the above. All such impacts can be calculated in financial terms and it can be seen that these costs are paid for by others, often with the life of the institution.
Why do these people at the top let this menace bite through their companies? Shouldn’t they focus on this rather than on business numbers or regulators or media or stock prices? Or is it treated as an unavoidable hazard of a growing organisation?
Sharks are not just people. Often, departments or product propositions can have the same characteristics and consequences.