The world is changing, as it always has, and so is banking. The best way to navigate a changing landscape is with strong leadership, but leadership is becoming a scarce resource. Extrapolating from that, the laws of supply and demand also tell us that leadership is more valuable than ever before.
The banking environment is different from what it was even only five years ago, and also different are the skills required for leaders. "We need to make sure that leaders and managers realize it is important to embrace change and stay nimble," says Jim Tubbs, president and CEO, State Bank of Cross Plains.
Building a culture of leadership development and succession planning is integral to ensuring that your bank has leaders and potential future leaders that will help the bank thrive in not just the current banking environment, but also in whatever environment banking finds itself in the future.
"[The State Bank of Cross Plains] for a long time had a strong belief in investing in employees, and creating education and leadership opportunities," continued Tubbs. "And a few years ago, we identified a need to focus on internal leadership. So, we created a new Leadership and Development position, the individual we brought in had no banking background – she came from an education background – and she brought in a new perspective on creating leadership opportunities internally."
As a part of this, the State Bank of Cross Plains incorporated leadership development into their strategic planning. "We started with defining what leadership qualities and characteristics are expected, instead of just asking people for intangible concepts" explained Tubbs. "We then could tell staff 'to help your career path, here are the expectations we have for leaders,' and give them a document to reference."
Making sure leadership development is continuous is key, according to Vicki Kraai, owner/founder, VK Solutions. "Leadership development is not a one and done thing," she explains. "You can't send someone to a leadership class and then say 'ok, they're developed' – it needs to be ongoing and intentional."
JP Morgan Chase has a similar attitude, as explained by Al Araque, executive director – market director banking: "There is a normal cadence of training that we provide to all our employees. There are monthly training requirements, training on enhancements to sales and service processes. We also have knowledge assessments, keeping employees fresh when it comes to their general banking knowledge."
"Intentional" is really a key term in leadership development. According to the Harvard Business Review, over half of senior corporate leaders believe that their talent development efforts are not adequately building the critical skills and organizational capabilities they want. So, like Tubbs mentioned, getting away from the intangible buzzwords and defining the wants and needs of the bank can create more focused development.
"There are four things needed for successful leadership development," Kraai discussed. "You need to be intentional about coaching the people who have been identified as leaders or future leaders, they need a mentor." A mentor is, in addition to a supervisor or manager, someone who is going to be a coach and be able to provide honest feedback, perspective, and experiences.
"The second thing, if you've identified people for leadership, have them put together a personal development plan that says 'here are the two or three initiatives I'm going to work on to develop my leadership skills,'" Kraai continued. "Third, those people who do lead or are identified as future leaders need to be open to 360-degree feedback, including self-assessments—self-assessments are so important."
"And finally," Kraai concluded, "to be a successful leader, you need to have what I call 'empathy,' but it's really humility. A sincere interest in the success of your team over your own individual accomplishments."
Another important aspect of leadership is a commitment to individual growth. "One priority of ours is to create a culture of learning across all job families, especially leaders," explained Araque. "The future of banking looks a lot different, so how do we train our employees to stay relevant and meet morphing customer expectations?"
Identification and training of future leaders also needs to begin sooner, says Kraai. "We need to identify and develop people at a very early level, the younger generation is our up and coming future banking leaders. We need to embrace this and do what we can to set them up for success."
Tubbs echoed a similar sentiment. "We use the term 'Strength of Bench' a lot when talking about succession planning," he shared. "We want to make sure that if there is a vacancy—be it retirement, personal leave, or something else—we are not only preparing our current leaders but also the future leaders that will step up."
There was a lot of "stepping up" for the State Bank of Cross Plains recently as everyone got a taste of one of the biggest things changing within banking: consolidation. Throughout the process of combining with Union Bank & Trust Company, staff had a merger partner. All the staff new to State Bank of Cross Plains were paired with a more seasoned staff member who they could turn to as a reliable source of information throughout the merger process, and the more seasoned staff knew they had the responsibility to be a resource and connection for the new staff.
A lot of leading through a period of change is ensuring everyone is clear on what is changing. "After the merger announcement I started sending out a merger update email to the whole staff," Tubbs discussed. "It was just a 'Hey What's Going On?' sort of email, because it was important to have consistent communication. Even now, after the merger has been completed, I'm maintaining that discipline just to give staff a bigger picture of what's going on at the bank."
Investing in leadership development for employees is important to ensure that your bank has strong leaders, and is also key to retaining talent that could be future leaders. Actively and regularly investing in employees with leadership potential can make a big difference in whether they stay with your bank, it is a strong message to your employees that they are important and valued. Ensuring your employees feel valued is good leadership, and in turn it builds them into good leaders as well.