The call arrives with a politesse that makes it worse. The client thanks you for your time, praises the team, and regrets to inform you that the mandate has been awarded elsewhere. You hang up and stare at the phone for a moment, replaying the presentation in your head. You had thought you were in contention, even well positioned. You had, after all, done the work, maybe extended some balance sheet, and arranged for management to meet your senior leadership.
But instead of a deal to work on and some fat fees, all you have now is a hollow sensation in your gut.
And what follows is often more dispiriting than the defeat itself: the internal meeting convened to determine what went wrong, who said what, and why the client chose someone else. Such meetings rarely alter the underlying facts. They do, however, tend to attribute (or redistribute) blame and — if not well-handled — diminish trust.
The idea is that careful analysis will yield future improvement. The reality is usually different
I can remember these sessions from the start of my career. The terminology varies. Sometimes they’re called a post-mortem. In the UK it is often known as a stewards’ enquiry. Whatever the name, the premise is as follows: a mandate that should have been won was lost, and therefore an explanation must exist. Perhaps the pricing upset the client. Perhaps someone had stage fright or rambled too much in the oral presentation. Perhaps the team lacked seniority or failed to project sufficient heft. The idea is that careful analysis will yield future improvement.
The reality is usually different. Most post-mortems on lost deals devolve in one of two unproductive ways and sometimes both.
The first resembles a cross between a show trial and a struggle session in which the conclusion is settled before the meeting begins. One or more individuals have been identified as the problem, and the session serves to extract a confession of failure — a sort of workplace self-flagellation — while others signal agreement. Someone is rapped on the knuckles for being too conservative on pricing, criticised for not cultivating a stronger relationship, or rebuked for insufficient rehearsal. Whether the criticism is fair is secondary. The purpose is to demonstrate that management has identified the issue and responded, and that the culprits have accepted responsibility.
The second becomes a forum of political jockeying, where the substantive reasons for losing are obscured by manoeuvring for future advantage. I’ve seen this happen time and again. A managing director who was not involved might argue that their earlier engagement would have changed the outcome. A product specialist implies that the generalists lacked technical depth. Each participant advances a case for their indispensability and thus greater involvement next time. These claims are as unfalsifiable as they are unverifiable but they are nevertheless put forward with great confidence.
Both routes share a structural flaw. It is exceedingly difficult to separate dispassionate examination of what happened from passionate recrimination. If a deal was lost through poor judgement or weak execution, those responsible have every incentive to deflect scrutiny. If it was lost because the competition was stronger or circumstances unfavourable, pressure builds — especially if the internal culture is riven with splits and factions — to identify a scapegoat.
The thinking of Clive Woodward, who coached England to victory in the 2003 Rugby World Cup, offers a tantalising alternative to all of this. He argued that teams learn more from analysing success than dwelling on failure. Discussion after victory is typically more candid; participants are less defensive and better able to isolate behaviour worth repeating.
In flow businesses, this perspective has practical appeal. When pitching for dozens of mandates each month, losses are inevitable regardless of capability. Competition is intense, clients have their own constraints, and timing or fit can determine the result. If you miss one deal, there will be other opportunities in short order to compensate for the loss. Conducting a formal inquest into every unsuccessful pitch would consume time better spent pursuing the next opportunity.
That logic should apply as well in episodic businesses such as M&A or equity capital markets. But there’s a key difference: deals don’t come around as often, and so a single missed mandate can create a material gap in revenue. I remember feeling almost physically ill after losing some mandates because I knew that the next chance may not be along soon. In that context, the desire to find an explanation, even at the cost of fairness, is understandable.
What, then, is the appropriate response?
It starts with accepting that losses will far outnumber wins. That fact supports concentrating on repeatable elements of success rather than prolonged navel-gazing after every setback. Extended post-mortems not only drain attention from the next opportunity, but also distort behaviour. When bankers operate in anticipation of an ex post facto review, it discourages creativity and encourages people to avoid taking calculated risks. As a result, decisions are driven too much by an eye to a later internal review. You win pitches by showing initiative, not by playing not to lose.
None of this excuses persistent underperformance. If a team repeatedly loses mandates it should have secured, or an individual consistently falls short, that warrants intervention. Yet this is a matter for performance management, not for isolated post-mortems. The distinction is important. Performance management assesses trends and patterns and requires a structured, procedurally rigorous response, whereas post-mortems focus on single outcomes that — if we’re being honest — are often shaped by variables beyond the bank’s control.
The uncomfortable truth is that attributing success or failure in investment banking to particular individuals or decisions is almost always a fraught and imprecise exercise. Mandates are won or lost for multiple reasons, many unrelated to the quality of the individuals in the team. Without a culture that prizes candour over avoiding blame, and leadership capable of distinguishing disciplined examination from internal theatre, the stewards enquiry keep consuming time and energy while fostering resentment and making the next pitch even more difficult to approach with a clear mind.