WHAT MAKES A GREAT LEADER IN THE FINANCIAL SECTOR?
Elaine Wilson, Managing Consultant, ASK Europe plc
To answer such a broad question, one place to start is to identify some of the particular characteristics of the sector: a highly regulated environment, in which compliance, process and procedure are more highly visible than in most other fields, and in which internal targets also loom large.
One measure of leadership, and more specifically its impact, is engagement and satisfaction. A recent Weber Shandwick survey scored the sector highly for access (having the tools to perform a job), involvement (feeling listened to) and desire (a sense that jobs are aspirational). A 2012 Maritz Employeement Engagement Poll meanwhile identified the sector as performing strongly in terms of recognition and reward, particularly around customer service, although the eye is caught by the additional phrase “and adherence to the prominent values of the organization”.
Equally informative, however, are the aspects of engagement where the sector showed room for improvement. While a lower than average sense of excitement about the job may not be entirely surprising in a process-dominated environment, the weakest performances were in ‘meaning’ (a sense of purpose) and in having a sense of common goals and shared interests.
There is perhaps a link here to the target-driven nature of the sector, much of which relates specifically to sales targets. Finance is not, of course, the only sector where a potential downside has been noted. In January 2013, Prof Norman Williams, president of the Royal College of Surgeons, commented in The Daily Telegraph that:
“Managers at Mid Staffordshire NHS Foundation Trust […] were so focused on hitting financial and waiting time targets that they “forgot why they were there.”
Targets derived – with good intentions – as indicators of progress towards a higher objective (in this case, providing health care and quality of life), can also become drivers of behaviour and serve as blinkers to the bigger picture. They can also act as a handbrake on innovation: the more narrowly attention is focused on ticking the box, the harder it becomes to see or think beyond it – a tendency that a ‘compliance culture’ may also serve to reinforce.
In his book The Art of Action, Stephen Bungay includes the (fictional) tale of Joe, recently appointed to head a major organisation’s product development centre and wrestling with complex challenges with his team. Here is part of one of his conversations with them:
“What we are trying to optimise is the outcome. The measures are the dashboard. We’ve got a speedometer, a milometer, and a fuel gauge. We need to watch them, but we should not confuse the readings on them with what we really want to do, which is to arrive at our destination.”
In a major 2010 research study, Exceeding Expectation: the Principles of Outstanding Leadership, the Work Foundation explored the difference between ‘good’ leaders and those considered truly ‘outstanding’:
“Outstanding leadership focuses on the few key systems and processes which help provide clarity, give structure, enable feedback, allow time for discussion and enable the development of vision. They use them to achieve outcomes rather than focus on the process, and put flexibility and humanity first.”
Another key distinguishing factor also bears re-iteration: outstanding leaders strive to create and enable a strong, shared sense of purpose with direct, clear meaning. ‘What?’ is a vital question to answer, but the finest leaders do so without forgetting that also answering ‘Why?’ will give their first answer a greater sense of meaning. This enhanced answer connects the employee not only to their specific role, providing a context for their own input that enables them to feel a sense of contribution, but also connects them to the organisation – it enables them to see the wheel within which they might otherwise identify only a small number of cogs.
One way to recast this distinction is to consider the difference between leading and managing. The latter is primarily concerned with making the optimum use of resources, and with controlling, organising and marshalling. By contrast, leading – in the sense of working to inspire a team – is focused less on ‘resources’ and more on ‘human’: leaders must inspire and motivate, balancing the needs of both task and team and developing an acute understanding of both.
If we consider what Goleman, Boyatzis and McKee called ‘The Leadership Repertoire’ in their book, Primal Leadership, two leadership styles are particularly relevant: visionary leadership and coaching. The visionary leader prioritises destination over the details of the route, and inspires the team not only to innovate and experiment (thereby promoting both innovation and a sense of meaningful contribution) but also to be fully committed to completing the journey. This prioritising of the requirement to inspire requires a specific emotional intelligence: empathy. Without an understanding of their audience’s perspective and outlook, a leader cannot hope to convey an articulate or meaningful vision.
The coaching leader also requires empathy, listening before giving feedback, reacting or setting challenges, but also creating a sense of trust and of a personal conversation. While responsibility for improving performance ultimately resides with the individual, the coaching leader encourages a sense of an investment being made in the individual and of a commitment to their improvement. Coaching is not micro-managing: the employee is not a tool to achieve the leader’s goals, but an individual working within the broader organisational context to achieve their own. Coaching is focused on the individual rather than the task, but encourages the self-confidence and motivation that enables the individual to master or rise to the challenge that the task embodies.
As in any sector, the single most important key to this is to remember that performance, whether individual or team, is ultimately achieved through and by people rather than by processes or procedures. And the important key to people is to work to understand them as individuals as well as holders of specific titles or performers of specific tasks: while the sector’s performance in equipping employees to fulfil their responsibilities is laudable, equipping someone to excel requires attention to the less tangible elements of the working environment – trust, honesty, openness, and a sense of being valued and developed.