Cats are notoriously difficult to herd. So are investment bankers.

Here is true example to illustrate the point. A senior manager, trying to launch an initiative in his department, requested that one top producer be exempted. His rationale was that he did not want to make this top producer do anything that might go against his wishes. In my naivety, I was shocked that this boss did not feel able to exert his managerial will over this producer. Perhaps, even more naively, I asked this manager what means of influence he felt he had at his disposal to encourage the producer to participate in the initiative. His answer, after a few moments of deliberation, was: "I suppose I could appeal to our friendship."

How to win friends and influence bankers

McKinsey teaches its consultants that there are ten basic forms of influence. They include: simply stating, “I want you to do this, period;” appealing to logic, “Do this because of x,yz;” appealing to values, “Do this because it will make you an honourable person;” consulting, “Let’s figure out what to do together;” or legitimising (“Do this because the greater authority of Mr. X says it’s the right thing to do .”)

All are legitimate influencing techniques, although some are weaker than others (e.g. the appeal to authority is a notably weak technique). Appealing to friendship is a legitimate influencing approach, but for a manager to say it is the only one likely to be effective, is weak.

Why is it so hard to manage investment bankers? The core of it comes down to their negotiating power.

The successful producer in particular has a very strong bargaining position. First of all, if they have been around a while they are probably worth a pretty penny. They therefore may not need to work. Even if not in the privileged position of having the option of early retirement, there is a highly liquid bidding market for talent. This provides at the very least the perception of easily available alternative job opportunities.

Managers are petrified producers will leave

In negotiations lingo, the BATNA – “Best Alternative to Negotiated Agreement” represents a floor in any settlement agreement. Investment bankers carry around their BATNA in their back pockets and use it as a very powerful bargaining tool, not just in their promotion and bonus posturing but in their day to day attitudes. Conversely, managers are highly fearful of losing their people. Unfortunately this is reflected not just in the bonus and promotion decisions, but also in the day-to-day activity of managing.

Obviously, the current market environment has gone along way to reduce the bargaining power of bankers. However, with the likes of Barclays and Nomura now bidding away talent, it already feels that the period where everyone viewed their position as highly uncertain is coming to an end, even if the crisis itself is far from over. If it has been easier to manage bankers of late, it does not appear that it will last.