Corporate death by a thousand paper cuts

Hello again! I was going to do a post about my experiences in Gdansk, Poland but once in a while, you get such a good question that it is just begging to be answered. Now my reader Naomi asked the following question: "Hey Alex! I was looking at corporate finance positions out of curiousity since you said a degree is not required in this field but I saw that a large firm in Singapore expecting a business/accounting/economics degree (please see the link). I was wondering of you would like to comment on this in your blog? Thanks." Well firstly, a big thank you to Naomi for her question - yes I love challenging questions like that. So let's begin by allowing me to explain two simple aspects of corporate finance for those of you not familiar with this industry. Corporate finance essentially involves the matchmaking of capital to investment and the middleman, the broker or the matchmaker who makes the deal happen gets to take a very big commission. #kerching

What kind of degree for you need to work in corporate finance?

There are several aspects to corporate finance: firstly there is origination - that's where you go out and look for companies who need to raise money. How each individual does that is always a secret, but essentially you need to have a good reputation for finding businesses the investment they need and once you have successfully pulled a few of these deals off, businesses will come knocking on your door asking you for your help to raise investment. Secondly, there is structuring: once you've agreed to help company "A1 Industries" to raise say US$100 million, you need somebody to do all the paperwork. This may sound boring, but it is nonetheless extremely lucrative because you need everyone from lawyers to accounts to other industry specialists to structure the deal in a way that will satisfy all parties involved. And finally there is placement: once you have agreed to help your client "A1 Industries" raise this US$100 million - do you have a list of people who have that kind of money to invest? We're not even talking about rich individuals here, we're talking about private bankers, hedge fund managers and pension fund managers. I realize I am really simplifying a very complicated process but I'm not here to explain to you how corporate finance works - there's already a very detailed, very TL;DR entry on Wikipedia if you are really interested. What I aim to do in this post is to address Naomi's question and to also ask one of my own: so how would a "relevant" degree in business, accounting or economics help you in this world?

I am involved in both origination and placement - I have a fairly good reputation in being the matchmaker and that's what most brokers in the industry do. Note that I have chosen to use a fairly generic name "A1 Industries" to describe the name of a typical client - that's because I am a broker who is industry-agnostic. What that means is that I will look at any business proposition as long as it is profitable - that's my only criteria. Whereas I have a Finnish friend who is a specialist in oil and gas, so she does what I do but she only focuses on deals to do with her niche area and I suppose she has enough business to keep her busy enough. You see, she has an engineering background and has worked in the oil and gas industry before, hence she brings with her a far more technical understanding of her industry whereas I have a degree that's pretty much useless and so I am essentially having to climb a steep learning curve about each industry each time I have a new deal to look at. I don't work on the structuring side though - that part is a lot more technical and if I may be frank, whilst the work can be highly paid, you will usually end up staying late in the office preparing contracts and going through loads of technical documents and increasingly, a lot of companies are outsourcing that function to places like Eastern Europe or India where labour costs are much cheaper than in London or New York. The fact is for every one accountant you hire in London, you can hire one and a half to two in Warsaw, around three in Tbilisi and up to five in Bangalore or Accra. However, London will remain a major financial center and a lot of this kind of business will still be done face to face; so that is why I have chosen a part of the industry that cannot be outsourced to a cheaper country.

Now from the description of the UOB Kay Hian job, it is a structuring job - now that's when the first alarm bells start to ring. Why would you hire someone in Singapore to do a job like that when wages in Singapore are so high and you really can outsource that to somewhere cheaper? But if we can put that issue aside for a moment, the next question I would raise is this: they're looking for a gradate with a degree in business, accounting or economics. That's a rather wide range - what an economics major would study at university could be quite different from someone with a business degree. Instead, you should be a lot more specific about the skills you expect the candidate to have to do this job rather than speak vaguely about degrees like that. And what if someone applies for the job with an engineering degree from Harvard or Oxford - would you turn them down because their degree is deemed irrelevant or would you gladly consider them since they're obviously very intelligent? In any case, what you would have studied at university would vary greatly depending on the country where you have done it in as well as the university you would have studied in. So if a Mongolian candidate shows up with a degree in business from a Mongolian university, would you then say, hold on - this course was taught under a completely different system in Mongolia, the student was taught and tested in Mongolian, is this somehow automatically considered the same as a student who has a degree from NUS? Likewise, what if the candidate has a degree from a private university that will admit anyone who can afford to pay the fees - what then? You see, there are so many flaws in terms of why UOB would make such a demand, like if you're going to insist on the person being a graduate, at the very least make it obvious that you want the candidate to have a degree from an elite university.

Now I know loads of people in my industry who do that kind of job in structuring within corporate finance and here's the thing: some of them don't have a degree, some of them have a degree but none of them actually have a degree in economics, business or accounting. However, that doesn't stop them from being exceeding good at their job for a simple reason: every company will have their own system when it comes to structuring - their own procedures, their own strategies, their own methods, rules and processes. So when you join a company and step into such a role, you need to become very good what what your company does: so let me give you an analogy. If you were to go work for a sushi restaurant as a chef, you need to learn how to make every kind of sushi that is on the menu of that restaurant - the fact that you may know how to bake delicious cookies becomes irrelevant because the customers at that restaurant wouldn't want to order cookies: they want sushi and quite specifically, the kinds of sushi on the menu of that restaurant. So the only way for you to become good at the job is to start off in a junior position assisting someone quite senior and then you learn on-the-job exactly what you have to do to produce exactly what the company needs. So by that token, given that your university has absolutely no idea what kind of job you will do or what kind of company you will work for in the future, how on earth are they going to teach you anything that is specific to the role you will play at the company then? Thus this is why I say that even if these people do have a degree, it is 99.9% irrelevant to the work they do on a day-by-day basis.

Allow me to state something pretty obvious: what these experts in structuring do is very complicated, technical and difficult so by that token, companies prefer to hire clever people who will be able to learn complex processes really quickly rather than idiots who still don't get it after you have explained it to them for the fourth time. Yeah, you don't want to hire stupid people who simply cannot do this kind of work. So if someone has proved that they are highly intelligent by getting a law or engineering degree from a great university, why wouldn't you want to hire them for the job? So allow me to point out the obvious: there's something wrong with UOB Kay Hian's requirements in that job ad because it doesn't point out the obvious and I can summarize it in one sentence. "Be truly brilliant, don't be stupid." Most super smart people tend to go to good universities, so why not just stipulate that you're looking for a graduate from an elite university? Asking for a degree in business, accounting or economics doesn't guarantee that because an idiot can get one of those from a degree mill and if it is merely a box ticking exercise for UOB Kay Hian, then I'm gonna call a spade a spade: that's a stupid box ticking exercise. My boss is an expert in his field who is making a ton of money in corporate finance, yet he would fail this box ticking exercise. His first degree is from Cambridge where he read history - that's not business, accounting or economics but do you have any idea how hard it is to get into Cambridge in the first place and then graduate with a first class honours? He then has his masters degree, but that's in a field of law that has nothing to do with UOB Kay Hian's requirement of a masters in accounting, investment or finance. So this stupid box ticking exercise would automatically exclude someone like my boss from the job, even though he is a highly successful CEO in this field.

So if my boss didn't have any relevant tertiary qualifications in business, accounting or economics, how the hell did he become such an expert in this field then? The answer is pretty darn obvious for those of us outside the Singaporean system but oblivious to you Singaporeans. Intelligent people like him can figure it out for himself. He didn't wait for a teacher to sit him down in a classroom to explain it to him. He taught himself everything he needed to know about business and finance to become as successful as he is today. If you're waiting for a teacher to teach you, then you're never going to learn more than what the teacher can teach you and therein lies a major problem. The truly intelligent, gifted and talented people in the world of business would never opt for the comparatively modest income of a teacher when they could be out there making millions and billions in the business world - therefore you only get the mediocre burn outs who are sick of being in middle management or those who could not hack it in the business world resorting to teaching business in a university. Who would want someone like that to teach you about the world of business? It seems that Singapore is one of the few places where people place so much emphasis on paper qualifications they totally lose focus on the real purpose the learning process - what is the point of a certificate if you don't ultimately benefit from what you have done to obtain that certificate? So UOB Kay Hian have misfired on this point about asking for a business, accounting or economics degree and it leads me to think that the person who wrote this is probably someone either from HR or even from a recruitment agency who doesn't have a freaking clue what people in structuring actually do. Just look at the pathetic cut & paste vague template language in the next four lines taken from the job ad posted on Jobs Central:

• Team player with strong interpersonal and project management skills
• High energy level and demonstrated ability to deliver results under tight deadlines
• Self motivated, results driven and resourceful individual
• Excellent written and verbal proficiency in English

Really? Are these really specific to the world of corporate finance? No, because I can use the same vague language to describe anyone from a manager at a fast food restaurant to a tuition teacher to a customer service assistant for just about any business. It's so freaking vague I can't believe UOB Kay Hian actually paid someone to write this big stinking pile of stupid bullshit. And I don't want to make this sound like a personal attack Naomi and I'm choosing my words carefully here, because I don't want to discourage my readers from asking questions in the future, but here's what's going on. Naomi in Singapore comes across this ad and says, "oh it is from UOB, we all know UOB, they're a famous bank in Singapore so this must be written by an expert and everything in this job ad must be accurate and correct." Do you Singaporeans really suspend any kind of critical thinking or judgement and just assume this position of complete trust when you see a familiar brand name? This job ad was very poorly written and it is riddled with so many errors. If a small company makes a mistake like that, I could understand it - but a big bank like UOB? Holy shit, what the fuck is going on here? Why didn't Naomi pause for a moment and think, "hang on a second, this doesn't make sense, it is illogical. Did they make a mistake here?" Why did she simply default to the position that, "I thought Alex said you don't need a degree to work in corporate finance but UOB have set this criteria - so Alex must be wrong." Well, did it occur to you that I'm right and that the person who wrote this ad for or on behalf of UOB Kay Hian actually did a rather lousy job? Are you Singaporeans prepared to question even those in authority when it is clear that the person in authority has made a silly mistake? This is what we call the Emperor's New Clothes syndrome: the Emperor is walking around naked, but you're all pretending that you can see his amazing new suit whilst I am the child who is laughing at the naked Emperor's genitalia. 

Now in a recent blog post, I talked about bad companies who make truly awful hiring decisions. Not all companies are run efficiently and sometimes, the bosses at these companies are flawed and they make some really stupid mistakes. We've witnessed huge companies crash into the ground despite having once been successful - Lehman Brothers, Enron, Barings Bank, MG Rover, Washington Mutual, Pan Am, need I go on? These companies don't grow from strength to strength and then collapse suddenly overnight because of a massive mistake - too often we simply focus on the last straw that broke the camel's back. Allow me to use a medical analogy - we call this a 'death by a thousand paper cuts' scenario. One paper cut is fairly minor and will heal quickly enough, but if you get a thousand paper cuts on a daily basis, then it is going to have a cumulative effect that is enough to kill you. And let's not kid ourselves - even the big businesses that are thriving today from Google to British Airways to Coca-Cola to Citibank to Apple to Amazon, they do make stupid mistakes all the time too! Case in point: just last month, a British Airways flight from London City bound for Dusseldorf landed in Edinburgh by mistake. Is that an embarrassing fuck up and a massive PR disaster? Of course it is. But would British Airways go bankrupt as a result? No, not this time. But if a company makes enough mistakes over a short period of time, then it risks landing in a 'death by a thousand paper cuts' situation. So by that token, should we be surprised that UOB Kay Hian made a stupid mistake in this job ad? Hardly - that's probably one of many mistakes that made that same day, we just happen to have had the opportunity in the public domain so we could put it under a microscope and expose it for how truly stupid it is. They probably would have covered up all the other silly mistakes they made that day and dealt with them all internally and so the public would never know about those other (really fucking stupid) mistakes they made.

I have seen this kind of mindset amongst Singaporeans before - quite notably amongst my parents. You see, they are much older (my dad is in his 80s now) and not very educated, so a good example of how they put blind faith in people in positions of authority is how they justify that drinking cold water is bad for you when you have a cough. They're simply not educated enough to start to understand the medical science concerning this issue, my father's only defence of this theory is that Dr Quek (our family GP in Ang Mo Kio) said so, hence it must be true. I simply roll my eyes when I see the way my father puts our GP on a pedestal because he is most educated person my father knows from his age group - oh he conveniently ignores the fact that his children are all graduates because he can't stand the fact that he is a lot less educated than us. When I get a prescription, I would want to know what the medicines are and the doctor or the pharmacist can explain the active ingredients in the medicines to me and I'd be able to have an intelligent conversation with them - but that's just not possible when you're as uneducated as my father. I've tried explaining complex concepts to him before and you can just see that look on his face when it is evident that he doesn't understand a word I am saying because he's way too stupid. I suppose uneducated, stupid people like that put blind faith in people like their doctors and others in a position of authority, to the point of putting them on a pedestal. So yes, I can understand if an uneducated, stupid elderly man like my father behaves like that - but Naomi? Goodness me, she's relatively young, she's educated and most importantly, she's not stupid at all. Why is she behaving like my uneducated, elderly father in this aspect then?

So yeah, I'm sorry if this is making me look rather mean but I'm still not letting Naomi off the hook because she seems to have completely missed the point that a company like UOB Kay Hian can make a dumb mistake like that. I wonder what they have done to have earned her blind trust in their corporate brand? As discussed, some companies do have bad bosses who make stupid mistakes - these mistakes happen on a daily basis and perhaps if you're as old as I am, if you've been working for as long as I have, you'll merely roll your eyes rather than be shocked when you see someone fuck up like that. UOB Kay Hian are depriving themselves the chance to hire some very intelligent candidates who would be great at structuring because of the way this job ad has been poorly worded. You only have to look around the world of corporate finance and you'll see a lot of highly successful CEOs in the business who clearly do not fit UOB Kay Hian's criteria. If you're one of those highly intelligent candidates who does not fit their criteria because you don't have a degree in business, accounting or economics, you'll merely respond by saying, "if that's the way they pick their candidates then no, I don't want to work for them either and I'll rather go work for a company with more enlightened hiring and HR policies. Limpeh is so freaking awesome, 我不怕找不到工作!" Hey, I lived through the crash of Lehman Brothers in 2008 and if someone as huge as Lehman Brothers can crash and burn, then I wouldn't put UOB Kay Hian on a pedestal the way Naomi did and imagine that they can do no wrong. You should never put any company on a pedestal by that token.

But I think it is necessary for me to speculate about what may actually happen at UOB Kay Hian - this paragraph is simply me giving UOB Kay Hian the benefit of the doubt because I actually doubt they are that incompetent or stupid. This job ad was posted fairly recently on the 25th March 2019, so if say a highly distinguished candidate with a law degree from Harvard applies for the job, that candidate would almost certainly be considered for the role - the gatekeeper there will undoubtedly have the discretion to bend or even break the rules when it comes to such outstanding candidates. It would be sheer insanity to reject such a brilliant candidate just because s/he didn't have a degree in business, accounting or economics especially if this brilliant candidate is up against someone with a business degree from a private university like SIM. I'm more than happy to assume that common sense will prevail in this case because you'll have to be pretty darn stupid to pick the SIM graduate over the Harvard graduate. Publishing a badly-worded job ad on a website like Jobs Central is but a paper cut to a company like UOB - yes it is mildly embarrassing but it would only be a serious injury to the company if they actually went ahead and hired a total idiot with a degree in business from some degree mill. The chances of that happening is actually quite slim, given that they will subject all candidates who have made the shortlist to an interview process and that part of the process will allow UOB to eliminate those who are either too stupid or plain unsuitable for the role. So regardless of what the job ad may have read, as long as UOB Kay Hian hires the right person for the job, no harm has been done and the badly-worded job ad on the website will eventually expire and be forgotten. So UOB suffers a minor paper cut in this episode but in the big scheme of things, it's no big deal.

Okay, let me move on by talking a bit more about what I do since it is a different aspect of corporate finance: origination and placement. It is a lot less technical and a lot more about whom you know - say for example, I get shown a project like, "A1 Industries is a company in America looking for US$500 million of investments through a corporate bond", it then boils down to whether or not I know the right people who have that kind of money. Being intelligent or having a degree in business, accounting or economics doesn't help me at all - instead, it's whom you know. I have friends in the business who are very lucky in that they are born into a rich family, so before they even start working, they have family friends who are in the business and it isn't hard for them to say, "oh I am sure I can speak to my uncle Hugh, he works in a big investment bank in New York, he would be able to introduce me to the right people for this kind of deal." Yeah, in case you didn't get the memo, life just isn't fair - so when someone like me tries to work in this industry, believe you me, all the degrees in the world are useless to me. In fact, I need to point out that what I did is highly unusual indeed: after all, I'm an immigrant, my parents don't speak English as a first language, they're not educated at all. I come from a working class background, I'm Asian, I'm openly gay and if someone like me somehow turns out to be extremely intelligent, they'll usually hide away in a department like structuring where they can be technical experts in their niche areas and be paid loads for what they do, rather than try to compete with the extremely privileged white kids who have all the right connections. The fact is I don't even think I'm that intelligent (I have met much smarter people in this industry) and I see how hard the people in the structuring department have to work, it simply isn't for me and I've always been good at sales.

What I am good at is networking - so when I attend events like conferences, product launches and cocktail receptions, I know how to work the room and chat to practically everyone in the room. There isn't a single course in university that will teach you how to do that - some people have the kind of soft skills to interact with strangers and engage them in polite small talk whilst others shudder at the thought of having to say hello to a complete stranger in a crowded room. This is when I think Singaporeans are extremely mistaken in terms of where these skills come from - teachers don't teach you skills like that, hell no. I was very lucky in having two older sisters who were great at nurturing me in this department and I also had neighbours whom I played with from a young age; fortunately, my childhood in the 1980s was way before kids had computer games and smart phones, so we were climbing trees and catching tadpoles in the monsoon drains. This is why the younger generation have far poorer social skills today because they simply lack that kind of human interaction if they grew up with computer games instead of playing with real human beings, It is through my extensive networking at events over the years that I have built up a good network of contacts within the industry that allows me to do what I do and quite frankly, nobody has ever asked me the question, "do you have a degree in business, accounting or economics?" before engaging me at such an event because it doesn't matter at all! I really don't care if the people I meet have degrees or what their degrees are in - instead I am more interested in whether or not we can do business together.

I learn a lot from others at the events through observation. If I see someone do something that's highly effective, I'll just copy them. Sometimes it works, sometimes it doesn't but the key thing is that I do this instinctively without asking for help from a 'teacher'. And that's a huge problem with you Singaporeans - you seem to be obsessed with learning in a classroom from a teacher and then obtaining a certificate or qualification to prove that you've been 'educated' whereas in the business world, the learning never stops. You don't need to learn from a teacher - you can learn from your bosses, from your colleagues, from your friends, from your peers, from your role model, heck even from the internet. This kind of learning is unstructured and less formal than attending a course where the teacher gives you everything from a textbook to lecture notes and even organizing the experiments and group activities that you need to participate in - of course, what I have just described is exactly what a teacher would do for a group of kids in primary school. You can't trust young children at that age to learn by themselves, you need to structure everything very clearly for them and then constantly check if they are doing the right thing. The problem is that many Singaporeans actually want to be treated like kids when it comes to learning rather than learn in a far more autonomous manner where they figure out stuff for themselves at their own pace, choosing their own methods of learning and whom they learn from. This is not a matter of being intelligent or stupid but more a mindset that is a result of the culture in Singapore where students are expected to strictly follow the rules rather than be encouraged to think outside the box, be creative and function independently from a very young age.

Let me give you an example of how this mindset manifests itself: I remember this conversation I had with my old friend Helen (not her real name) from Singapore. Now I know Helen since our VJC days and there's no doubt that she is extremely intelligent, she even got herself a scholarship to a prestigious American university. When work took her to London, she told me that she wanted to take a course in French as she had always wanted to learn French. I told her that she didn't need a course - a lot of people can teach themselves foreign languages: in the old days, we used books and tapes/CDs. Nowadays there are so many different apps out there to teach languages and you can even engage a native speaker teacher through the internet for an hour long weekly tutorial, which you can then fit around your busy schedule. There is a huge variety of informal ways to pick up new languages thanks to technology but Helen was adamant she wanted a course, "I'm a Singaporean, so sue me, I like sitting down in a classroom as if I am back in RGS and learning from a teacher. I feel totally at home in that kind of environment and learn best that way. It also provides a safe environment for me to speak French badly when I am surrounded by other learners so I won't embarrass myself by making mistakes when speaking to real French people. Doing a course and passing an exam is what I need to give me the confidence to speak French." Well guess what? She did one beginner's French course and learnt so little, then she got a new job before getting married and she still doesn't speak French today because she was so insistent on learning in a classroom environment. Helen isn't stupid, hell no. But her mindset is so Singaporean that she has held herself back when it comes to learning new things. She would probably make a great Singaporean civil servant but she is struggling to fit in here in England. So I can see how Naomi resembles Helen in some ways from the way she asked the question.

So there you go, that's it from me on this issue - what do you think? Are Singaporean companies totally barking up the wrong tree when it comes to their policies on insisting on graduates? Why are Singaporeans simply accepting the status quo rather than questioning why some companies have such bizarre if not stupid policies then? Am I too harsh on Naomi or is she genuinely guilty of not questioning those in positions of authority even when they seemingly do something strange or downright silly? Is this mindset quite typical amongst Singaporeans and if so, why? What have your experiences been when it comes to job hunting in Singapore and if you've worked in the West, how do the two differ? Or perhaps, have I been too harsh on Singaporean companies - is there a method to their madness? Is this simply a difference in business cultures between East and West? Leave your comments below please - many thanks for reading.