Critical Leadership Capabilities in Financial Services
Leading in Times of Change and Uncertainty.
The financial crisis that began in 2007 has had deep and far-reaching consequences for finance institutions. It forced many of them to rethink their business models, to exit certain areas of business, and to make tough decisions about people. The effects are still being felt today, as the organizations continue to come out of this challenging period stronger than they went in.
The degree to which employees are engaged with their work is a good indicator of an organization’s strength, stability, and future prospects. A high level of employee engagement can fuel productivity growth, boost sales performance, improve product quality, and enhance customer service levels. Low levels of engagement have the opposite effect.
Investment in leadership development is critical to keeping ahead of the curve as a company moves from one phase of business growth and development to another, as well as in responding to sudden disruptions.
Leadership is defined by many different standards, but all definitions emphasize certain characteristics. Leadership research suggests that leaders are those who influence others toward common goals. Good leadership often entails persuading others to accept a vision and strategy, while providing the guidance and support they require to reach their full potential.
Today’s business environment is fast-paced and dynamic: Financial services leaders need not just to take what has worked in the past and apply it again today, but also to operate differently than they did before. Many organizations must shift from a hierarchical organization to a flatter, more flexible structure.
In the face of uncertainty and change, now is the time for organizations to invest in their people’s capabilities as leaders. They should focus on developing leadership skills that allow employees at all levels to make quick decisions informed by speed and accuracy of information. In times of upheaval, it is even more important to have leaders with strong influencing skills, who can encourage collaboration and build consensus. Leaders should also be able to lead change, so they are ready for whatever may come next.
Leadership is critical to organizational success in financial services. It involves having an impact on employees’ motivation and performance by establishing a direction for the company and communicating it effectively.
Effective leadership requires balancing levels of power and engagement with employees, having a clear vision for the company, effectively managing change management when necessary, motivating people to contribute toward that vision, and building the collaborative skills needed in today’s workforce. In short, effective leaders are able to drive performance throughout their organization.
Leadership Insights Based on Research
The Role of Power
Employees who are in control of their own tasks, have good relationships with peers and supervisors, and who receive the information they need to perform at a high level are most engaged. Their engagement levels typically will be lower than those of the leaders in the organization, but they are still significantly higher than those of disengaged employees. Employees with low levels of engagement will take limited risks and display little desire to contribute outside their specific areas of responsibility.
Leaders should examine how power is distributed among team members in order to determine learning needs related to how individuals interact when given more or less power.
Subtle differences in leadership style can have a powerful effect on how engaged people are with their work.
Cautious leaders encourage employees to seek input from others before making decisions, while confident leaders expect individuals to make decisions independently. Employees are much more likely to be motivated when they feel their supervisors trust them enough to give them the autonomy to make decisions on their own.
Employees who feel they have the freedom to take risks and try out new ideas do not require as much supervision and support from their leadership as those who feel more constrained by their leaders’ rules and direction. Organizations should seek employees who are enthusiastic about taking on greater responsibility, rather than those who simply want to do what they are told.
Critical Leadership Competencies
1. Self-Awareness. Has an accurate picture of personal strengths and weaknesses and is willing to improve.
2. Relationship Management. Has the ability to build and maintain high-performing teams; is open, honest, dependable, and someone others want to work with
3. Influence. Can build support for ideas and initiatives; has the political savvy needed to influence senior executives
4. Stress Tolerance. Has the ability to manage stress effectively; can remain calm under pressure
5. Change Catalyst. Identifies opportunities for change and has the flexibility, creativity, and perseverance needed to drive successful outcomes
6. Performance Management. Recognizes individual and team performance; is able to make difficult decisions related to rewards and recognition
7. Collaboration & Influence. Can work across boundaries, build trust, find common ground, and foster collaboration among disparate people
8. Discipline. Consistent performer who follows through on commitments
9. Decision Making. Able to weigh alternatives carefully in order to make high-quality decisions
10. Innovation. Displays original thinking and creativity; looks for ways to improve processes and product/service offerings.
It seems that many companies are shifting their focus to be more human-centric. They are moving away from an obsession with automation and technology in order to focus on employee engagement. It makes sense. After all, the employees are the ones that help generate revenue for their companies. When they’re happy and motivated, they can not only increase productivity but also improve the overall culture of the workplace .
What is HR doing about it? Some companies are hiring Chief Happiness Officers . Below is a list of the responsibilities of these “fluffy” people:
- Keep employees happy by making sure they have everything they need to be successful in their roles
- Solve problems that come up with employees who don’t feel valued or recognized
- Help managers create a culture of appreciation and feedback
- Mediate conflicts when they arise
- Help managers create a plan to address any issues with engagement or productivity
- Develop strategies for innovative approaches to employee recognition and rewards
And so on… Like I said, they have a lot of work ahead of them. Happy employees are more engaged. They’re willing to go that extra mile for their employers. In return, companies will need to meet their employee’s needs.
Some examples of this include:
Offering flexible schedules:
Sometimes life can get in the way of work. It doesn’t mean that people are less productive, it means that they need to prioritize things – like family or personal issues. This is why flexible schedules can make a world of difference for employees and employers alike.
Empowering employees to make decisions:
When employees are allowed to use their best judgment, they’re more likely to stay engaged with what they do. They’ll feel like an integral part of the company and come up with new ideas that can help improve the way things work.
Providing personal benefits:
A lot of companies offer perks such as free meals, snacks, massages, fitness centers, etc. However, it’s not enough to just have these benefits. Employees need to know how they can actually take advantage of them.
Base salary:
A competitive salary is one of the best ways to keep employees happy. It shows that their employers value them and that they’re looking out for their best interests.
Providing opportunities for professional and personal growth:
This is another really important benefit that has a strong impact on employees. After all, everyone wants to know that they’re growing and progressing in their careers!
Cultural fit:
Some people just don’t mesh with the culture of a given organization. Maybe they were just recently hired and the culture has changed since their first day. Maybe they were overlooked for a promotion and feel like there’s no room for advancement for them. Whatever the case may be, companies need to hire and promote people who will fit into their respective cultures.
There are many different areas that HR departments can focus on to increase employee engagement. We’ve mentioned a few of them here, but what are your thoughts? What do you think companies need to do in order to ensure that their employees are engaged and productive?
