Attempting to recover from the global recession which began with the financial meltdown in 2008, the financial services industry faced some of its most arduous years. The influence of new regulations, increased public scrutiny and the worst economic recession in decades have forced financial firms to adapt their practices not just to survive, but to succeed amidst an evolving landscape.
After the Lehman Brothers collapse in 2008, Nomura, a financial services group based in Tokyo with regional headquarters in London, Hong Kong and New York, began to look for opportunities to develop its presence in a collapsing industry. It acquired the Lehman Brothers franchise in Asia and the equities and investment banking businesses in Europe and the Middle East. It now has offices in more than 30 countries and employs approximately 26,000 people worldwide.
Pre-recession, Nomura had hundreds of analysts trained in separate regions. When it acquired Lehman, the focus shifted to integrating the regional approach into one global program. Launched in 2008, the Global Markets Initial Training Program is now the flagship of the company’s two-year assimilation and development process for new hires in the global markets division.
Nomura is increasing investment in new hires to maximize their ability to perform from day one. With global offices, the company was challenged to develop a firm-wide program that addressed both the organization’s core values and regional issues that affect each office. In 2009, the training program had an analyst class of 35 graduates, reflecting the economic situation at the time. In 2010 and 2011, Nomura had more than 200 analysts and associates participate in a four-week classroom training program, prefacing a two-year continuing development program.
Nomura program management engaged in extensive pre-program consultancy with internal senior stakeholders to develop technical content and practical case studies that replicate the company’s global markets environment. The Global Initial Training Program is structured to help new hires from undergrad and graduate schools assimilate into the corporate culture, establish their global network, build a base-level understanding of the market and polish foundational skills needed to master their work.
“The key is continually evolving the program and raising questions on the program’s purpose and objectives from a continuing education standpoint,” said Michelle Tucker, executive director and global head of Nomura’s Global Markets Graduate Program.
A Global Perspective for Desk-Ready Analysts
Tucker and her team developed a program to address the firm’s global reach. New hires come from diverse backgrounds, which made it tough to identify the common denominator in terms of learning needs and build a training program with a broad range of educational opportunities.
Today, with Nomura focusing on the rapid growth of its U.S. operation, the program is truly global. In 2011, there were 68 delegates from the U.S. and 60 from the Asia-Pacific region joining a Europe, Middle East and Africa group of 79 in London. To integrate this global population, the class is mixed to facilitate network building across the group. Participants are divided again into teams of varied regions and experiences for assignments to work on outside of class. The case studies and tasks are crafted to reflect the global nature of the company’s client base and its regional variations. For example, graduates in the program are asked:
“An active fund manager is interested in constructing an asset swap strategy to take advantage of negative swap spreads in the U.S. How could you construct the trade for the client, and what are the risks/rewards involved?”
Post-recession, Nomura leaders felt a shift in focus from regional to global learning was needed to help new hires understand how each office worked together and how the nuances of diverse global markets would enhance the bottom line.
An interactive program was created leveraging networking, philanthropy, social events and technical training, enabling Nomura to provide analysts with an opportunity to get to know one another as they learn the business.
To further support its training program’s global perspective, Nomura rolled out a global speaker series where attendees from different regions can participate in single sessions during the training and via virtual conferencing capabilities afterwards. As a result, analysts and associates remain involved in a shared experience, despite any geographic divide. The ongoing presentations continue to be a resource for employees throughout their first two years at the company and help manage the input of internal resources into a knowledge base.
“In the past, we attempted to incorporate some of our subject matter experts into our training program, but this proved a conflict — getting them to spend time training people when they need to spend time focused on their business,” Tucker said. “As a company, we are not resourced in a way that allows us to extract resources from various business areas on a full-time basis, so it was a natural choice for us to look externally. Our approach was to establish a middle ground by constructing a training program that incorporates subject-matter experts in a less time-intensive manner.”
Nomura’s corporate culture continues to evolve, but to ensure its continuity, the firm brings in its own executives to speak with incoming analysts so they can receive perspective from a long-standing employee. The success of the initial integration of new hires across regions often leads analysts to think of the company as a global institution, meaning they have to provide clients with global financial solutions. This has helped to bridge geographic divides and create a single, unified organization post-acquisition.
Building a Bridge Between Development and Execution
Classroom delivery in the Global Markets Initial Training Program is the centerpiece of a six-month cycle of graduate and business contact incorporating pre-course online assessment, program design, online study, classroom training, business presentations, project work, exams, assessments and post-program review. This feeds into the overall two-year program by providing a platform for continuing education and regular developmental contact.
Initial training is designed to address core skills a new-hire will need when he or she hits the desk. To do this, the four-week classroom element combines technical knowledge with functionally aligned competency training. This entails marrying specific technical requirements for the equities and fixed income divisions with the common skill sets needed across each of the four global markets functions: sales, trading, research and structuring. Underpinning everything is the need to build the behavioral and professional mindset required for success in the industry.
In class, the objective is to get away from the traditional notion of the classroom by delivering learning through extensive use of simulations, case studies and interactive role-play. In this environment, the functional interpersonal skill requirements can be explored and developed. The relevancy of the training is immediate — the graduates focus on case studies that utilize the latest internal research as well as current business issues related to the firm and the wider financial markets. Graduates are encouraged to develop a solution-focused mindset to complement the technical knowledge being taught, thus providing a toolkit to communicate client solutions at early stages in their career.
Financial training company 7city provided eight senior technical faculty members from a range of financial market backgrounds to deliver training and facilitate four classes simultaneously over four weeks. With support from the Nomura program team, additional management and personal development tutors participate on specific project days to capture soft skill outputs and competency-based, qualitative feedback. Analysts present ideas and client solutions in role-specific scenarios such as the “morning meeting” and “client pitch.” To do this, the graduates must keep up to date with the latest developments in the financial markets and understand this is a critical requirement of their new career.
The feedback is then brought together to provide additional qualitative assessment on the participants’ final scorecards. The post-program reports summarize quantitative outputs, qualitative assessment and feedback against the Nomura competency framework. This analysis is shared with the delegates and their new managers, allowing Nomura program management to implement bespoke development plans from the start of the employees’ careers.
Creating a framework to measure analysts on classroom participation, soft skills assessments and behavioral criteria, as well as exam scores, creates a more in-depth picture of the participant. The way classroom performance on initial training is often mirrored by performance on the desk had been noted regularly on previous programs. Being able to document this was a return on learning and development Nomura had never effectively captured before.
The company’s continued implementation of its Global Markets Initial Training Program highlights two points: financial firms have a lot to gain from redesigning their training programs, and the use of outside resources provides an extra perspective through which change can be put into motion.
“By addressing the marketplace as a global entity, we provide our new hires with the ability to understand their position on a micro and macro level,” Tucker said. “Without addressing this perspective, our employees would not fully comprehend their individual responsibilities and how their work affects the company as a whole. We feel this approach has bred productivity and achievement throughout the firm.”
Adam House is the global relationship manager for Nomura at 7city Learning, and Ken Johnson is the managing director of 7city Learning. They can be reached at editor@CLOmedia.com.
