SG Cowen : New Recruits

Written Case Analysis

Name : Kaustubh Risodkar

Roll No : 190103069

Section : F

Due Date : 17-06-2019

EXECUTIVE SUMMARY :

Chip Rae is the director of recruitment at SG Cowen, an investment bank which follows a very

rigorous and meticulous process to hire 30 new associates from a large pool of applicants. The

process concludes on Super Saturday where the candidates are subjected to 5 hours of grilling

from senior associates and bankers of the firm. While most of the positions have been filled, Rae

is still left with 2 vacancies. The choice for these two positions is between 4 candidates each of

whom has some strong points as well as a few weaknesses. The bankers are having a hard time

deciding and also are running out of energy. Rae needs to make a decision soon as snow is also

coming down and people need to be home soon.

The recommended action plan would be to list out a finite set of characteristics that SG Cowen

expects from its associates and create a formalized grading system to assess the candidates based

on those characterisitics. This would streamline the entire process and be a meritocratic and fair

system to choose the remaining two candidates and would leave little room for doubt.

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 STATEMENT OF THE PROBLEM

The major problems facing Rae and his team are as follows:

1- Choosing the right candidates:

As Kim Fennebreques, the CEO of SG Cowen said – “Make the hiring process our most

important priority”. A lot of focus was put by SG Cowen on their recruitment process

which started as soon as early winter. The ideal hire should demonstrate a lot of qualities

like enthusiasm for banking, relevant technical skills, be a good cultural fit etc. Therefore,

it is imperative for SG Cowen to evaluate their applicants in the right way and choose the

best fit for the organization.

2- Restlessness in the team:

The process on Super Saturday was very exhaustive as a part of it began on Friday

afternoon. On Saturday morning, the interviews started at 9 and they were pretty grueling

both for the interviewers and the interviewee. The bankers were almost out of energy and

were unable to get things moving and get a consensus on the two candidates. The weather

was also worsening and people had to go home as well.

Although the hiring process of SG Cowen was well thought out and planned, it had a few flaws

in my opinion. Let’s take a look at the drawbacks of the recruitment process:

1- Intuitive Process:

The process carried out by SG Cowen for hiring their associates involved a lot of

intuitive work on behalf of the interviewers. As a result of this, lots of assumptions were

made about the candidates which weren’t necessarily true.

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 2- No Formal Marking or Grading System to Assess the Candidates:

While SG Cowen’s process was very exhaustive and long and the interviewers also made

notes about the applicants, there was no mechanism in place to quantify the qualities of

the candidates. The presence of a formal marking or grading system on certain criteria

would have made the decision making a lot easier and time spent pondering over the final

few candidates could have been saved.

Out of the problems identified, choosing the right candidate is a problem with long term

implications for the firm. SG Cowen should prioritize having a proper marking mechanism in

place so that it can avoid delays in decision making regarding hiring candidates. Restlessness in

the team is a short-term problem which can be dealt with if there is a proper structure in place.

The decision facing Rae is taking a call between the 4 candidates and selecting (or eliminating)

two of them as soon as possible with utmost fairness and un-biasedness.

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 CAUSES OF THE PROBLEM

SG Cowen’s recruitment process on the eye looks very well structured and organized. There are

however some problems with it because of which the bankers were not able to clearly decide on

the last two associates. The major causes for that have been stated in the section preceding this

and are further elaborated here:

1- Intuitive Process:

As mentioned before, the hiring process was very intuitive and allowed a lot of room for

biases. For instance, one managing director felt that some bankers might lose patience with

Natalya Godlewska’s less than perfect English and that it would affect her ability to work

smoothly. There was no prior evidence though which suggested that this might be a

problem with Natalya. In fact, to the contrary one of her references mentioned that she was

the kind of person he would want to bring to a tough negotiation. Another example of

intuitiveness on account of the recruiting team was their reservation about Ken Goldstein

and whether he would be able to work as hard as the other associates. There was no

evidence which suggested that Ken wanted some extra time from work for his family. He

just registered his wish to have a balanced work and family life. This is no way means that

he would not be a dedicated employ and hence such a presumption was not a good

indicator.

2- No Formal Marking or Grading system to assess the candidates:

The lack of quantifiable characteristics on which the candidates could be judged was one of

the major reasons for the indecisiveness among the recruiting team. If there was a marking

system or a grading system in place to rate the candidates, there would not have been such

a delay in the decision making. It is mentioned that Rae tried to formalize the criteria by

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 using grid sheets for the bankers to fill out and have them vote and make a case on behalf

of the candidates. This process however only deepens the biases and does not allow the

bankers who have not interviewed the candidate to form a neutral opinion. For example,

Martin Street was taking several finance courses but SG Cowen was not allowed to ask him

about his grades. If a marking or grading system was in place with academic grades as one

of the criteria, then it would have been easy to assess Street based on that criteria and might

have forced him to reveal his grades.

3- Lack of involvement of Human Resource Professionals

“Rae assigned team captains to every school at which SG Cowen recruited on campus”. It

is written in the case that these captains were ideally banking professionals and not human

resource professionals. The involvement of Human Resource Professionals would have

helped a lot since they are better equipped to identify the characteristics other than

technical skills that are required in a candidate to prosper at SG Cowen. HR Professionals

could have laid down a certain set of imperative traits to look in a candidate and could have

helped the banking professionals eliminate quite a few applicants in the earlier stages.

DECISION CRITERIA AND ALTERNATIVE SOLUTIONS

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I have established a couple of things by now, one of them being that the hiring process carried

out by extremely strenuous and consumes a lot of time. Another thing that we can safely assume

is that the process is also very costly for the organization since there are three phases of interview

viz; Informational Interviews, On Campus Drive and Super Saturday. There is also a dinner and

gala time on Friday, a day before Super Saturday. Let’s look at the criteria on which I will

evaluate the alternative solutions.

1- Time for Implementation:

How much time will the new solution take in comparison to the time being taken by the

current process

2- Tangible Costs:

Would there be any additional costs in carrying out the alternative solutions? Or would

there be a decrease in the existing costs?

3- Acceptability to Management:

How acceptable will the new solution be to the upper management in the organization?

I have two alternative solutions in mind which can make the process better and a lot easier than it

is currently.

1- Reducing the interview time on Super Saturday:

The interviews on Super Saturday are very strenuous and last for almost 5 hours. This

drains out the interviewers as well as the interviewees. The candidates also spend 1 hour

with an interviewer which only strengthens the biases that a particular interviewer forms

about the candidate.

I would suggest that interviews are conducted for a shorter time of about 1-1.5 hours with

a panel of 3 bankers interviewing the candidate at the same time. This would allow

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 different perspectives amongst the recruitment team and also would counter biases by

allowing a variety of opinions. Let us evaluate this solution against the aforementioned

criteria:

i) Time for Implementation:

This solution would definitely reduce the time for implementation of the hiring

process as the interviews would be finished a lot earlier and would give the

evaluators a lot more time to assess the candidates.

ii) Tangible Costs:

There would be no more additional costs or reduction in any costs in this solution.

iii) Acceptability to Management:

This process would be very acceptable to the management as there are no

wholesale changes in the process and all the major players in the original process

are still involved in the alternate solution.

2- Scrapping the Informational Interviews and involving HR Professionals in the

Campus Drive

The main purpose of the informational interviews is to gauge an applicant’s interest and

enthusiasm for the organization. But these informational interviews bear an additional

cost to the firm and could be avoided. This could be done by having an HR Professional

at the Campus Drive along with the team captains who are usually bankers. The HR

Professionals can help detect if the candidate is a good fit for the organization at an

earlier stage and are better equipped than bankers to gauge the interest levels and

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enthusiasm levels of the candidates. Let us evaluate this solution against the necessary

criteria:

i) Time for Implementation:

This solution would completely eliminate one stage of the interviews and hence

the time for implementation would be definitely less.

ii) Tangible Costs:

This solution would eliminate the costs of staging the informational interviews

totally and there would be an additional cost of getting an HR Professional on

board for the Campus Drives. Overall, though I feel that the costs would reduce

significantly.

iii) Acceptability to Management:

The management might be averse to implementing this solution as Informational

Interviews are a very big part of their recruitment drive and hence, they might be

hesitant in scraping this round. This will be a negative for the above-mentioned

solution.

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 Recommended Solution, Implementation and Justification

The recommended solution would be to involve a Human Resource Professional at the campus

drive and have them decide a set of finite characteristics that the ideal candidate should have

beforehand. Then on Super Saturday, each candidate should be graded on the characteristics pre-

decided. This will be fair mechanism to compare all the candidates across their respective skill

set.

Who will Implement the Solution?

The solution will be initially implemented by HR Personnel who will list the characteristics that

they are looking for in a candidate and later on the bankers will be grade the applicants on those

traits to help reach a solution.

What is the Solution?

The solution is to get rid of grid system that allows bankers to vote simply yes or no for a

candidate and replace it with a formalized marking and grading system.

When will the Solution implemented?

The solution will be implemented during the Super Saturday interviews.

How will the solution be implemented?

The solution will be implemented by allowing the bankers to evaluate the candidates on a

individual trait basis and breaking it into simple bits rather than have them simply vote yes or no.

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IMPLEMENTATION:

To formalize the entire recruiting process, we have to list out the characteristics that SG Cowen

needs from its associates. Inferencing from the case reading, here are the characteristics that I

feel are of utmost importance to SG Cowen:

1- Loyalty:

SG Cowen like most other organizations wanted to recruit candidates for the long term

and this could be inferred through their organization of informational interviews. SG

Cowen was looking for candidates who were ready to commit for the long term.

2- Inter-Personal Skills and Culture Fit:

Rae himself said that “Sometimes they might be a diamond in the rough and they can

make the transition, but culture fit is important. Employs of SG Cowen needed to deal

with a lot of clients and hence fitting in culturally as well as having inter-personal skills

was important.

3- Technical Skills:

Since SG Cowen was a firm which dealt with the banking and financial sector, having

technical skills like analytical abilities, strong hold on core finance subjects was a very

important trait for the candidates.

4- Previous Pattern of Success:

As Schoenberg said “It doesn’t matter what you did before, what matters is that you have

demonstrated a pattern of success”. It was very important for the candidates to showcase

their past successes.

5- Leadership:

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 According to Fennerbresque, “We want the type of person here who doesn’t need to be

told what to do, we want the self-starter”. Having good leadership skills was another

important trait for potential recruits.

6- Relevant Experience:

While this was not a must, having relevant experience in the field of finance would

always be a plus for any candidate.

I have designed a grading scale from A to E symbolizing the level of satisfaction with each skill.

A- Highly Satisfactory – 5 points

B- Satisfactory – 4 points

C- Average – 3 points

D- Unsatisfactory – 2 points

E- Totally Unsatisfactory – 1 points

Grading the candidates on each characteristic:

1- Natalya Godlewska:

i) Loyalty – A

Natalya was very keen for the role at SG Cowen which is substantiated by the fact

the she called all the bankers she had met during the informational interviews.

ii) Inter Personal Skills and Cultural Fit - D

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 One of the associates felt that Natalya would not be a good cultural fit because

she seemed stiff and uncomfortable during the small talk. However, this might

also be due to nervousness and therefore she cannot be marked as E.

iii) Technical Skills – A

Natalya was pretty well versed with the technical aspect of the things which is

evidenced by the fact that during her UG degree in finance, she had the highest

GPA. Every interviewer was also uniformly impressed by her knowledge of

financial markets and analytical skills.

iv) Previous Pattern of Success – B

Natalya’s past records showed that she was pretty successful in all the things she

took up.

v) Leadership – C

Although there aren’t instances where Natalya’s leadership has been

demonstrated, it has been mentioned that she is a go-getter , radiates positive

energy and has a can-do attitude which are all the traits of a good leader.

vi) Relevant Experience – A

Natalya had relevant experience in a M&A company which was one of the major

domains of SG Cowen. Hence, her experience was pretty relevant.

TOTAL SCORE – 24

2- Martin Street

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 i) Loyalty – D

Street liked SG Cowen’s area of specialization but did not seem very keen to

commit long term to the firm which is evidenced by the fact that he was doing a

lot of other interviews as well.

ii) Inter Personal Skills and Cultural Fit – B

Interviewers mentioned that Street came across as a confident, dynamic

personality and was really articulate.

iii) Technical Skills – D

Although Street was taking financial courses, he didn’t reveal his grades. This left

a lot of room for ambiguity and hence his technical skills could not be judged

much.

iv) Previous Pattern of Success – B

Street had demonstrated success in his past experiences where he led a rescue

operation in war torn Bosnia.

v) Leadership Skills – A

Street clearly had excellent leadership skills demonstrated by the fact that he was

the president of section at Wharton and also led the rescue operation in Bosnia.

vi) Relevant Experience – D

Street had no relevant experience in the domains in which SG Cowen operated.

TOTAL SCORE - 19

3- Ken Goldstein

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 i) Loyalty – C

Although Ken was keen on balancing his family life with work, there were

reservations about his commitment to the firm because of the fact that he had a

family.

ii) Inter Personal Skills and Cultural Fit – B

Everyone who had interviewed Ken though he would represent SG Cowen well

which shows that he was a good cultural fit.

iii) Technical Skills – B

It is mentioned that Ken worked as a manager at PWC where he showed good

skills in resolving technical accounting issues for client

iv) Previous Pattern of Success - A

“Ken’s performance appraisals put him in the top 5% of the firm”. This clearly

shows that Ken showed patterns of success in the past.

v) Leadership Skills – B

Ken was used to having a lot of responsibility and being in charge and was

successful while doing so.

vi) Relevant Experience – B

Ken was manager at PWC, managing multiple audit teams and drawing up pricing

and budgets for projects

TOTAL SCORE - 24

4- Andy Sanchez

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i) Loyalty – B

Andy was very keen on SG Cowen and he showed interest in talking to alumni for

USC who were working in the banking industry.

ii) Inter Personal Skills and Cultural Fit – A

Andy was great at making people relax and was very friendly and cordial to

everyone he met.

iii) Technical Skills – D

Andy had low GPA’s at a time when grades at USC had a high amount of inflation

which does not speak well for his technical skills.

iv) Previous Patterns of Success – A

Andy ran a highly successful business and had pretty good SAT and GMAT

scores. This demonstrated a pattern of success.

v) Leadership Skills – C

Sanchez had demonstrated decent leadership skills when his started his own

business.

vi) Relevant Experience – C

Although Sanchez had an undergraduate degree in Economics, his

entrepreneurship venture does not count as relevant experience to SG Cowen.

TOTAL SCORE - 22

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Based on the above methodology, the two candidates that should be chosen are Ken Goldstein

and Natalya Godlewska.

This plan of action addresses all the concerns with the recruitment process at SG Cowen and

gives a fair assessment of all the candidates. Intuition based characterizing is removed because of

the need for interviewers to grade each characteristic and having a multiple amount of point

scales would give a fair cumulative account of the person’s skills.

Also, a formalized grading and marking system has been established and the lack of involvement

of HR Professionals is addressed with the HR identifying the criteria required in a candidate at a

very early stage.

In case there is problem establishing a formalized system, there could be a contingency plan

where there are checkboxes in front of every expected trait for each candidate. The interviewers

would be asked to check the box if they are satisfied with the candidate’s acumen in that

particular trait. The candidates who accumulate the maximum number of ticks in their

checkboxes from all the interviewers should be selected.

JUSTIFICATION:

This plan of action is the most idea considering the structured and meticulous process that SG

Cowen follows. It does not tamper much with the original process and instead just adds a few

layers to make it better. The involvement of HR Professionals at Campus Drives reduces the

workload on the bankers and betters the process.

Also, the formalized marking system would make sure that a candidate is not rejected just

because some interviewer feels that he/she would not be able to cope up with a certain situation.

It provides a fair baseline on which everyone is judges and creates a meritocratic system.

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The process also reduces the time required is assimilation of thoughts and decision making. It

makes sure that a consensus would be reached soon as the entire system is based on numerical

scores and grades.

This is why I feel that the solution provided is ideal and will work the best eliminating the major

issues from the original process.

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