Attention To Detail: A True Story

11 Comments | Investment Banking - Random Misfortune & Mistakes

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Attention To Detail.

Even if you remember nothing else out of the Vault guide and all those other investment banking interview guides out there, you remember attention to detail. The one quality all prospective investment banking analysts really need.

“But wait,” you might say, “If all you do is crank out Excel and Powerpoint all day and an Associate is checking your work all the time, why is attention to detail so important?”

Make no mistake. It’s a game of diminishing returns. Attention to detail will never win you that new deal that results in $50 million of fees.

But a lack of attention to detail can easily derail projects. Or at least make you look stupid in front of everyone.

The Setting

It was a few months after I started, and it was the first investment banking deal I ever worked on. Times were good back then. Private Equity Firms were actually doing deals; there was no credit crunch; more people than Bill Gates had thoughts of buying Yahoo. And investment banking bonuses were at their highest levels ever.

A private equity firm was contemplating buying a division of a huge company we were representing, and we were deep in due diligence meetings with both sides. During due diligence, the buyer makes sure that the seller isn’t trying to screw them with funny accounting, legal problems or plain old lies about the business.

Since it was a divestiture, the key question was what the division of the company looked like as a standalone entity. Were the expenses accurate? Could it really generate that much revenue on its own? How many employees were going to come along for the ride?

The Answers

The role of an investment bank, at least in M&A, is to introduce buyers and sellers and “sell” both sides on doing the deal. Once you get past the initial meetings, the usefulness of a bank goes downhill faster than a Jamaican bob-sledding team (exceptions apply of course; sometimes banks really do make a difference all the way til the end).

In this case, we had to hand-hold and help management answer these key questions. We’re talking very detailed financial information, down to how a company would actually think about buying offices and furniture.

Needless to say, when investment bankers have to figure out how much chairs cost, you have some issues.

The Problem

The “leader” (I won’t say CEO) of this division had his own channel with the private equity firm and tried to do everything on his own.

One morning, he sent out a completely new version of the model to everyone without running it by his trusted investment bank first.

This was 2 hours before the next diligence meeting started.

The Associate on my team saw this and just said, “Check EVERYTHING! The meeting is in 2 hours! Make sure it’s perfect!”

Perfection…. Or Not

It’s hard to check a model with 20 or so detailed worksheets in under 2 hours. But rather than adopting brute force and hitting “F2″ in every single cell to see that all the formulas linked correctly, I decided to use the “eyeball method” to check Excel due to my time constraints.

I found a few mistakes with this method, and thought I had found everything….

Meeting Minutes

After printing about 30 copies of this 20-page long document, I went and delivered them to everyone in the meeting room. This had detailed, line-by-line expense projections down to individual employees.

Everything was going fine… until one of the many accountants in the room (Private Equity Firms hire big teams to conduct due diligence) saw an error – one of the formulas had not been copied across correctly and everything was divided by the wrong constant, throwing off someone’s salary by around $200,000 per year.

So What?

It seems like a minor mistake in the grand scheme of things. And it was the company’s fault, not mine. No one from the private equity firm blamed me or even said anything about it, but everyone from my investment banking team glared at me simultaneously while the Associate thought up different ways to crucify me (if this had been UBS LA, I would have actually been executed).

Up The Chain

Attention to detail. Not only can it embarrass you in front of clients, but it will also make you look bad to your superiors. And they, in turn will look bad to their superiors, all the way up the chain until the Managing Director is scolding a Vice President for some formatting error, and the VP is scolding the Associate, and the Associate comes over to your cube and tries to take away your models and bottles.

And that’s the real reason you’re tested for attention to detail in superday interviews: bankers don’t want to hire an Analyst whose screwups result in their investment banking salaries being cut in half because of an employee salary being off by $200,000.

About the Author

is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys learning obscure Excel functions, editing resumes, obsessing over TV shows, and traveling so much that he's forced to add additional pages to his passport on a regular basis.

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11 Comments to “Attention To Detail: A True Story”

Comments

  1. George says

    So what kind of attention to detail tests are candidates subjected to during the interview process?

    How the heck do you improve your attention to detail? Isn’t it something you either have or you don’t?

    • says

      You can practice and improve over time… try proofreading documents. You won’t necessarily get tested during interviews unless they give you a modeling test or case study.

  2. komodo dr says

    So if I have always sucked at finding errors and is not born with attention to detail am I screwed for IB or PE? does trading require as much?
    I still have my eyes on IB though, anything specific you can suggest on improving this?
    thanks

    • says

      Trading is a different type of attention to detail… not typing in the wrong number and losing $100 million by accident.

      All you can really do to improve is practice, print out documents, look for errors, always be watching for errors or inconsistencies when reading or even watching TV/movies.

  3. jerry says

    I work and IB and I struggled at begining because I do not have attention to details. But I’m pretty good at bul$%^tting so It wasn’t a career stopper for me. Screwed up forecasts, analysis that’s all me, but who gives a thing at the end?
    The truth is that they could have built in check in those spreadsheets but they too dumb to have them, so make sure you develop them yourselves and force them to implement these solutions!

  4. Christian says

    Has an intern or junior analyst bought in clients for a large investment bank like Goldman Sachs. I think I might have a lead, would that guarantee you a full time position after internship.

    • M&I - Nicole says

      If you can bring in a large client, yes, that would make you a more attractive candidate but it wouldn’t guarantee you a full time offer.

  5. Tom says

    “It’s hard to check a model with 20 or so detailed worksheets in under 2 hours. But rather than adopting brute force and hitting “F2? in every single cell to see that all the formulas linked correctly, I decided to use the “eyeball method” to check Excel due to my time constraints.”

    Wow… Talk about a textbook case of quality/time. In the case of this kind of document, I don’t know that printing would help since you have to check formulas.

    This kind of irritating “attention to detail” stuff is frustrating the hell out of me in my current bank job.

    What I struggle with even more is proofreading familiar that you’re overly familiar with; it’s just difficult to notice errors and other stuff in documents.

    Besides printing a document and reviewing it the next day (or whatever else kind of time gap one can afford to have), how else do you suggest one practice / get better at attention to detail?

  6. Paresh P. says

    I am not a banker, but I figure that it should definitely be important to have a good grasp on such matters at the Analyst level. It is >>the<< job one is hired for, as an analyst, isn't it… As one MBBB Partner once told me during a rendez-vous: "…When I am hiring you as an Analyst, it doesn't matter how good you are at managing people or handling clients, etc.–that comes later. For now, I need to know that you are able to handle the rigor of the grunt work, and have the skills for 'it'…"

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