SG Cowen : New Recruits – Building culture through Hiring

Introduction
Société Générale was a French bank which took over Cowen and company in July 1998 to form SG Cowen
and become a part of the CHARM. It did so as Société Générale felt that Cowen and Company was the best
match culturally. The bank placed a lot of importance on cultural fit while hiring its candidates and followed
different strategy to scout for the best talent from top US B-schools

Investment Banking Industry

The investment banking industry at this point in time in 2001 was moving towards consolidation as big firms
were acquiring smaller firms and partnering commercial banks. The biggest expense for these banks was
compensation costs. They fought fiercely with venture capital, private equity, hedge funds, consulting and
tech -companies to acquire the best talent. However, off late, the banks reported declining profits and even
laid off some staff to cut costs.

About SG Cowen
Cowen began as a bond brokerage house and grew into a firm known for top-tier research and strong equity
sales and trading capabilities. It also looked to build its investment banking and M&A advisory services. The
bank was highly regarded for its coverage of heath care and technology domains. The CEO, Kim
Fennebresque, believed strongly in the power of research and believed that Cowen should continue to grow
geographically, but stay industry focused.

Building culture through hiring

Like all top investment banks, SG Cowen conducted an elaborate recruitment process to fill the associate
positions. There are certain aspects of the hiring process that helped Owen get candidates with right fit :

1. Getting people to act and behave like a firm : During the recruitment process, Chip Rae ensured that
the recruiters acted like a firm ensuring fairness to candidates and also screening candidates good
enough for the group as well as the firm.
2. Background Agnostic : People in this sector were often fixated on quick output and were hard on
people who took some time to figure out what they wanted to do. Having a CEO who was initially a
lawyer and subsequently went on to become a successful banker, helped SG Owen in removing that
bias during the recruitment process.
There are certain aspects that SG Owen looked for in candidates to be a part of their bank :

1. They should love what they do.

2. They should want to be a part of SG Owen
3. The cultural fit was very important as seen earlier.
4. They should be collaborative.
5. Should love technology and emerging markets

1
Hiring Process
Many senior officials at SG Owen believed that having Chip Rae in-charge of the recruitment process was a
big advantage as he himself had been a banker. Hence, he was able to look through those lenses. SG Owen
followed a standard recruitment process of recruiting through top US B-schools through open and closed
round applications. It has certain schools earmarked as core-schools.

Initially, SG Cowen used to recruit from only the top 10 B-schools. However, it was not able to attract the
cream talent from these colleges. Once Rae took charge, he persuaded to management to recruit from outside
of US-Top 10. This way, they were able to attract the best talent from schools like NYU, Berkley, Cornell etc.

Methodology :

1. Rae scheduled a company presentation at each of the core schools, appraising prospective candidates
about the company and its operations. He used to emphasize on the advantages of a small size and
horizontal structure, which would allow for faster progression.
2. Team captains made a small presentation followed by substantial informal interactions.
3. At bigger schools like NYU, SG Cowen would be represented by a managing director.
4. The team captains were assigned who would conduct informational interviews to help interested
candidates gain head start for interview preparation.
5. SG Cowen had 2 or 3 schedules in each core college with at least one open round and rest closed.
6. After the interview at campus, candidates are shortlisted for a Super Saturday round at the SG Cowen
HQ where each candidate would interview with 5 or 6 senior bankers.

Present Situation
The super Saturday post lunch session is in progress. Rae targeted to make 20 offers to ensure 15 acceptances.
There were already 8 hires from the summer associate program and 7 third-year analysts were being promoted.
So another 15 acceptances would achieve the target of 30 associates set by Rae. The committee had identified
clear “Yes” and Clear “No” candidates and now only 2 spots remain for which they had to choose from 4
candidates. The relative strengths and weaknesses of the four candidates are listed below :

Natalya Godlewska – Cornell Martin Street - Wharton

4 years work ex at CommScan 4 years in the US Army
Pros : Pros :
Highest GPA in UG (Finance) Substantial Leadership experience
Go getter / Keen attitude / Radiated Energy Dynamic / Confident / Articulate
One of the top candidates from Cornell
Analytical knowledge
Understanding of Financial Markets

Cons : Cons :
Not right “cultural – fit” No Business Experience
Uncomfortable and Stiff during talk & dinner Interested in appearing for other colleges also
Less than perfect English No clarity of GPA

2
 Ken Goldstein – Berkeley Andy Sanchez - UCLA
5 years with PWC 4 years in own business
Pros : Pros :
Top 5% performer at PWC Enthusiastic and personable
Relevant background experience Keen – informational interviews attended
High SAT and GMAT scores
Cons : Cons :
A young family with 2 kids. Commitment issues Low GPA
Too mature. Fear whether he would follow orders Unable to manage studies along with business

Evaluation of candidates & recommendations

On analysing the relative strength and weaknesses of each candidate, and comparing them to the fit of SG
Owen, the following is observed :

1. Natalya Godlewska : She was from Cornell, academically brilliant and had worked with cutting edge
M&A software modelling firm. However, she was feared to be not a good culture-fit and also some
issues were noted with her English. Some of the senior bankers felt that English would not be major
issue and people at wall-street anyway talk too fast, and also, an associate, who was barely a year
older, could use not the right culture excuse to mask his/her own ignorance.

Final verdict : Do not Hire – Not a good “cultural fit” – Very important for SG Owen.

2. Martin Street : Martin was from Wharton, an ex-military professional with no past business
experience. He had a vast leadership experience. However, since SG Cowen came in the middle of the
recruiting cycle at Wharton and hence, only candidates who really wanted SG Cowen or those who
didn’t get any other job. Hence, there was a possibility that he might not accept the offer if extended

Final Verdict : Do not Hire – Not keen on joining SG Owen.

3. Ken Goldstein : Studying at Berkeley, Ken had worked with the PWC for the past 5 years and was in
the top 5% of PWC employees. He had closely worked with finance and tech roles during his stint at
PWC. He was uniformly appreciated by all panel members but they were afraid that having a young
family with 2 children, will Ken be able to work like other associates without a family life?

Final Verdict : Hire. In-spite of being family man, showed performance in PWC & MBA.

4. Andy Sanchez : A second-year MBA at UCLA, Andy was an Entrepreneur. He was appreciated by
most of the members and was friendly and keen on joining SG Owen. He had a very low GPA (U/G –
2.8 ; MBA – 3.1), however did well in his SATs and GMAT. This might be due to the fact that he used
to coach students for SAT from college and hence was able to crack these exams.

Final Verdict : Hire. Entrepreneurs were rated highly.