The tattooed MBA

By Felix Salmon
August 20, 2009
tattoo post has become very interesting, and now Ryan Avent weighs in with his take:

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The conversation in the comments to my tattoo post has become very interesting, and now Ryan Avent weighs in with his take:

Most people don’t tend to see things the way Mr Salmon does, but rather take outward signs at face value. Most jobseekers do dress up for interviews. Most young people seeking professional work do not get large, visible tattoos. Firms pay for fancy offices and hire college graduates, even though fancy offices and college graduates are expensive and shabby offices and a staff of non-graduates might signal that the firm is very good at what it does—so good that it doesn’t need to bother with the normal trappings.

In general, I think it tends to be much more costly to depart from convention than to keep to it, at least until a reputation has been established.

I’m reminded of this recent post by James Kwak, formerly of McKinsey & Co:

It’s not what you learn at business school that matters, it’s the screening function. Top business schools screen for the attributes that certain types of companies, including consulting firms and investment banks, value – above-average intelligence, ambition, presentability, ability to get along with others, willingness to follow orders, and a strong streak of conformism. McKinsey recruits people with Ph.D.s (and certain other advanced degrees) as well because the Ph.D. is an indicator of intelligence and (to some extent) ambition, but it is considerably harder to get a consulting job as a Ph.D. from a top school than as an MBA from a top school because of the other things that an MBA signals.

I think there’s a gap in the market here, for a new high-end management consultancy, and/or boutique investment bank, which only hires people with tattoos and which doesn’t employ a single MBA. Even if only a minority of potential clients see things the way I do, that could easily be enough people to build a strong and sustainable business.

Once upon a time, in fact, the City of London was full of “barrow boys” who had left school at 16 and made it rich as traders. In the US, shops like Bear Stearns and Salomon Brothers often took great pride in being staffed with hungry guys from the streets, people with the opinion that it’s making money which matters, not being respectable. Even now, certain corners of the market, like the inter-dealer brokers, have similar characteristics. But as an ever-growing proportion of smart kids goes first to a good college before even looking for a job, and as these firms become better established, it becomes very easy to fall back onto hoary conventions when it comes to staffing.

I’m dedicating this post to a certain heavily-tattooed bank flack who never went to university and who has suffered as a result — more for the lack of formal education than for the ink, it must be said. No one thinks that at this point in her career what she did or didn’t learn as an undergraduate would make the slightest bit of difference to her performance in the job, but somehow it’s always easier to promote someone else. It’s a sign of overcaution and laziness on the part of her managers. And in theory there’s no reason why that laziness and overcaution can’t be exploited by their rivals.


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Again, I think you’re wrong here Felix. While the degree from a top school in and of itself may not make a huge impact (just like the tatoo), it’s a very strong signal. You should know that information is often extremely expensive, so any reliable signal of quality is a cheap way to narrow down the most worthy candidates.

I agree that the best candidates might not always be those from the best schools, but I’d bet that the average HBS grad is a much better banker than the average American (I know, I know – credit crisis…that doesn’t disprove my point).

And having worked in the pits in Chicago, I can assure you that talent isn’t the driving factor there. Most people get there through personal connections, and traders are losing a lot of money as trades go to the screens. As pit trading disappears, I’d guess that talent will be more of a driver (and elite college grads will dominate).

Posted by ab | Report as abusive

the natural human body is much more classy than one graffitied.. i would hope that highly trained/educated professionals appreciate finer art.

nothing wrong with a small tattoo here or there.. but a full arm sleeve signals to me that the person is a has been and their best days behind them

Posted by dvictr | Report as abusive

It may be a sign of overcaution. It may be sign of real caution. We don’t know. It may that attitudes toward tattoos will become progressively more accepting but it may be that tattooing will fade as a social phenomenon and then what do you have?

But my point – from an economics perspective – is that choices have consequences. A choice to tattoo one’s self in highly visual ways is a choice that a person – assume at least 18 – makes. It has repercussions, much as the decision to not do homework or drop out of school or to take extra classes, etc. affects your future positively or negatively. In that regard, you choose to tattoo yourself in a visible way which is not the same as being born dark-skinned or with a Jewish sounding name or having an Irish brogue in 19thC Boston.

So whatever the merits of any individual, you’re ignoring the basic economic truth that actions have consequences. The message being received by people who don’t know the specifics of a person’s actual life history is that this person was stupid enough to tattoo him or herself in such a highly visible manner. Maybe youthful rebellion and/or a bad family life drove the decision and the person has now grown up. Maybe the person intended then to mark him or herself as separate from the “straight” society of 9-5 regular jobs and now has grown or changed or accepted reality. Maybe the person was/is on off hours part of an artistic or other subgroup in which visible tattoos are normal but needs to be in a straight job for money. I don’t know and don’t care. But the basic economic point remains that visible tattoos are known by everyone to make getting a good job more difficult – the more highly visible, the harder it is – so it is bluntly a bad decision to get them. There is no reason not to ask, “What the heck was that person thinking?” And there are perfectly good reasons not to hire a person that you naturally and correctly wonder that about.

wasn’t the intent and the person has since grown

Posted by jonathan | Report as abusive

“In the US, shops like Bear Stearns and Salomon Brothers often took great pride in being staffed with hungry guys from the streets, people with the opinion that it’s making money which matters, not being respectable.”

Felix is certainly going against the prevailing wisdom in stating that a new Bear Stearns needs to be created, and let’s not forget that the old Salomon Brothers became the core of Citigroup’s investment bank.

On a broader note, however, I’d go so far as to state that it was this “opinion that it’s making money which matters, not being respectable” that, with some twists and turns over the years, is responsible for two of the key problems that led to the crisis – too much proprietary trading and a lack of respect for the client. Being “respectable” in the days of “old” Wall Street sometimes manifested itself in negative ways – for example, “respectability” might require employing only WASPS from the right families – but also in some positive ways – a focus on agent and advisory activities (equity and debt underwriting, M&A work, and executing trades for clients) rather than riskier principal investing and a concern with the quality of the securities that a firm underwrote, since it was not “respectable” (nor good for long-term business) to peddle crap to the institutions and individuals to whom you’d want to sell offerings in the future. I realize that I’ve oversimplified to some degree, but there’s a core of important truth within this generalization.

I would not underestimate the degree to which the desire to remain “respectable” – a sense of professional ethics that may not be codified – can help prevent abuses in finance, or any profession. Felix, wouldn’t you say that a desire to be “respectable” is a key factor for journalists – or at least good ones – in making sure that a story is accurate and well-written?

Posted by Dave | Report as abusive

I absolutely hate long-windedness.

So is the moral of the story that if, and only if, you’d like to wear a tatoo you should even consider getting one in the first place?

And if you’re five or six steps ahead of any rival, how can one possibly be exploited by them or their tatoos?

I worked at Bear Stearns, and cannot ever recall seeing a single visible tattoo.

I also grew up on what could (very vaguely) be called “the streets” and pretty much everyone I knew of an low-to-average intelligence went to at least a year of some form of post-secondary education.

Maybe it’s a generational thing, but your view seems to reflect a nostalgia for some place or time that exists largely in your head.

Posted by GP | Report as abusive

When I was a kid around 1970, only old people had tattoos, usually acquired in some foreign port in their youth. Funny if it goes full circle, with tattoos becoming “the old people” mark a few decades from now.

Posted by gs | Report as abusive

I think Felix is just saying mixing up the DNA of Wall St every now and then is not such a bad thing. Just look at where all those shiny MBAs got us. Companies could maybe be a little more adventurous in their hiring, it’s very easy to go to the top college and scoop up the top 5% and you’ll probably get pretty good employees in the same way you can buy all your clothes in GAP. That said although it takes more effort you could spend your time poking around vintage stores and get something very cool and everyone will go ‘that cool’. In summary, if you keep doing what you’ve always done you’ll keep getting what you’ve always gotten.

Posted by Davros | Report as abusive

Possibly related: the Federal employees found to have advanced degrees from diploma mills.

Posted by Jon H | Report as abusive

I think Felix is right. I’ve been a consultant for the better part of 15 years and have spent the last 8 helping hundreds of companies (from F100 to startups) with business strategy. And I don’t have an MBA. 9 times out of 10, MBA’s just do the standard thing they were taught, things that I am brought in to fix and do better.

Yes, an MBA means you’ve been selected, but you’ve been selected in exactly the same way as every other MBA and you will learn roughly the same things. Not exactly a recipe for creative problem solving, although MBAs are very good at jumping through hoops and applying standard, prescriptive solutions.

Personally, the only value I see in an MBA is the contacts you make when doing it. The downside of not having one is that you need to be effective at what you do since you don’t have the rubber stamp of an MBA.

If you are an executive looking to solve business problems, you need to seriously ask yourself if you are just looking for the same tired solutions sets or something that will put you ahead of everyone else. In the former case, hire an MBA, in the latter, hire anyone but an MBA….

This is for Dave regarding his statement above.

Even though Bear Stearns had to be bailed out by JPM does not mean that it wasn’t a good shop. Excuse me if I’m wrong but the majority of businesses started in the US don’t even make it a year and Bear was around since 1923. I don’t know about you but I think an 85 year run is a pretty good one. There are only a select few large companies out there today that could boast of a longer existence.

Just figured I would point out pure ignorance.

Posted by Nick | Report as abusive