If leadership is the #1 differentiator, banks need to break old hiring patterns
David Boehmer: Regional Managing Partner, Financial Services Practice – Heidrick & Struggles *Europe and Africa
Todd Taylor: Partner, Financial Services Practice – Heidrick & Struggles *New York
Todd Taylor is a partner in executive search firm Heidrick & Struggles’ New York office and is a sector leader within the Financial Services Practice. His search practice spans wealth management, asset management, and banking.
Financial institutions have an opportunity to break out of old hiring habits and forge new paths in order to stay ahead of today’s competitors and tomorrow’s challengers. There is little doubt that the order that we have been used to in banking is in the midst of being rethought, rebuilt and reassembled. Banks have reached a crossroads; the industry needs to evolve. We have to go all the way back to the end of the Cold War for the last time there was a significant infusion of new talent – the financial sector benefited immensely from a wave of scientists, technologists and quantitative engineers who created entire new products and businesses. We haven’t seen this same new talent infusion for quite some time – and yet there’s clearly an immense opportunity right in front of us.
In order for financial institutions to take full advantage of the talent surge, executives need to look outside traditional parameters to find fresh leaders of tomorrow.
People + Potential and Finding the “How” in Talent
Recently, there has been a marked increase in cross-pollinating people from different industries; from entry through to senior leaders, CEOs and Board Directors. In fact, we’re going to have four generations within the global workplace: the next gens, the millennials, gen X and the traditionalists – putting a greater emphasis on the importance of a strong organizational culture. This means going away from the old models of “resume box checking” and thinking much more about how experiences, capabilities and personal journeys all match to create high performing teams. Though necessary, the common ways of evaluating job candidates – via resumes, interviews and references – provides only a small piece of the puzzle.
Decisions someone has made and the different paths they’ve taken to get where they are amongst many critical clues. Are they agile thinkers? Do they run to or from challenges? Will they stick to a project until a solution is found or will they give up? Focus should be on abilities and tendencies that will help address tomorrow’s challenges.
5 Steps to Evolve Your Talent Strategy
These steps will help to focused on your organizations talent of the future instead of the past:
# 1. Recognition: Redefine what talent is and what it looks like (not just boxes to be checked), learn where and how to look for it, and understand how to attract it. Align talent to business value.
# 2. Willingness to act and be proactive: Most companies tend to be slow moving, which can cause them to miss out on star performers who are in high demand. Be ready to act fast. A big part of this is moving from reactive to proactive talent management. Find, or create, opportunities to inject new types of talent.
# 3. Take a calculated risk: Managers generally hire people who walk and talk like everyone else on the team. Be willing to “break the mold” and hire outside your comfort zone. Identify the leaders in your organization who will embody and enforce this, and provide them the tools to take the hiring bets they want to make.
# 4. Create opportunity: Create ways to integrate people who think differently and to harness their full potential. Leverage existing talent to be the bridge across internal cultures. Allow “senior” and “star” to be defined differently than in the past – the only way to promotion and higher compensation should not only be leading bigger headcount.
# 5. Bring an open mind: Toss out past biases and concerns and seek solutions. Big firms need to work hard to remain competitive; smaller firms need to keep innovating and not become stale.
Evolving the Banking Talent View
There is no one perfect solution. Nor will the big splash “west coast” hire solve all the problems, nor in fact always be the right answer. There must be a marriage of financial content and experience with the new thinking and agility that will create of what banking will be in the future.
The naysayers will argue that it just won’t work for regulated financial services, or that people would rather go to a technology firm than a bank. In some cases, yes this is true, but it isn’t a sweeping reality. For example, isn’t telecommunications also global, yet regionally regulated? The key here is to identify functions or businesses where attraction and qualification are more likely to use those as the entry points for new types of talent. Obvious examples include functions such as technology, data, security, finance; and business groups like payments, fintech and retail banking. But this shift has also occurred in more traditional businesses. Examples such as insurance firms, investment management organizations and broad multi-national commercial banks are creating roles reporting directly to the CEO around functions such as strategy, operations and products with the explicit aim to hire from outside of the financial sector. The hires are viewed as tomorrow’s leaders to teach the business and then move further into the organization after 18-24 months.
Today there is a real opportunity to change the talent paradigm: to change how you hire, how you think about talent, how you retain talent, how you develop talent. This is an incredible opportunity for the banks who are willing to be a little bit innovative, take some risks and really drive something forward to differentiate and shape the futures in their industry.