Lessons from Dresdner Kleinwort fiasco

The news that three more former employees are suing Commerzbank for the payment of allegedly promised bonus payments should serve as a reminder of the dangers of trying to build a financial services business by putting together a collection of senior professionals. The danger of the winner's curse that threatens the success of many a corporate takeover is a real threat. Staff that is hired too expensively is a drag on profitability and may also dampen the team spirit as those employees of less favorable terms might resent being in a second tier in terms of pay and job security. Cobbling together professionals with disparate backgrounds will never be a substitute for a corporate culture that has developed organically. As a consequence while we do recommend selective hiring of senior professionals to fill gaps in an organisations managerial line-up we strongly advise clients not too neglect the systematic development of their existing staff.