The future of financial services – part 1

What defines a good leader? Look for these six qualities

WHAT DEFINES A GOOD LEADER? LOOK FOR THESE SIX QUALITIES

Modern business challenges can require new approaches. Leadership will need to evolve in order to continue to guide organisations in tomorrow's world of work. But what are the characteristics of a good modern leader in the workplace - and how can organisations develop them?

Many studies draw parallels between effective leadership and solid organisational performance. But whether they’re a junior manager or a senior executive, the qualities that leaders need are changing.

Nearly 1,500 HR professionals ranked leadership development as the number one priority for 2025, with managers feeling 'overwhelemed' by the expansion of their responsibilities. In today’s unpredictable world, you must combine traditional leadership skills with new abilities. So, what does an effective modern leader look like?

1. Remember what makes a good leader

Before looking at the new skills future leaders may need, it is worth reflecting on what a leader actually is.

What are the qualities of a good leader? It’s not what you may think.

Being in charge of colleagues does not necessarily make you a ‘leader’. Former Facebook COO Sheryl Sandberg explains: “Leadership is about making others better as a result of your presence and making sure that impact lasts in your absence.”

Retired astronaut Chris Hadfield believes that good leadership is: “Not about glorious crowning acts. It’s about keeping your team focused on a goal and motivated to do their best to achieve it. Especially when the stakes are high and the consequences really matter.”

There may be varying opinions on the strengths and weaknesses of leaders. But overall, most people believe that great leaders motivate their team members to perform their best and achieve common goals.

What traits do you need to achieve this in the modern workplace?

2. Use blended leadership styles for a VUCA world

Stacey Philpot from Deloitte Consulting maintains that the core skills needed historically in leadership roles have remained unchanged.

“These skills allow someone to become a leader faster than their peers. This is even true in today’s volatile, uncertain, complex and ambiguous (VUCA) environment,” she says.

The core skills for leading in a VUCA environment include:

Pattern recognition
Motivation
Agility
Emotional intelligence
Ability to understand, control and express emotions

This represents psychological assessments of 23,000 senior leaders globally over the past 25 years.

Consider introducing servant leadership:

Leaders need new styles of leadership to deal with changing cultures. Being comfortable with not having the answer and owning failure can create an environment of trust and openness.

Collectively, these behaviours form ‘servant leadership’. The Chartered Management Institute (CMI) defines servant leadership as emphasising behaviours and values such as:

Active listening
Empathy
Leading by example

These are instead of opting for a more authoritative, ‘command-and-control’ leadership style. Leaders create the conditions for team members to excel by displaying vulnerability. But given the stigma around servant leadership, how can organisations encourage it?

How to combat stigma surrounding servant leadership:

Alsu Polyakova, HR Leader for GE Healthcare, says reducing stigma around servant leadership will take a specific strategy. Most importantly frequent performance appraisals for leaders.

“We give leaders lots of opportunities for self-reflection, so they understand how they behave,” she says. GE Healthcare’s most successful leaders help to encourage behavioural change, Polyakova says. The company measures success by how well employees rate leaders on achieving GE Healthcare’s ‘cultural pillars’. These pillars include inspiring trust and empowering employees.

3. Create a culture of trust in the workplace

Gaining workers’ trust is more important than ever. One way to build trust is for leaders to take action on issues such as climate change. 71 percent of employees consider their CEOs’ social awareness as critically important, according to the Edelman Trust Barometer.

Social awareness may yield rich rewards. The Edelman poll shows that workers who trust their employers are far more engaged and remain more loyal than their more sceptical peers.

Leadership styles are clearly changing. The most effective leaders will need to tailor their styles to suit different scenarios, says Professor Sattar Bawany. “Leaders need a broad repertoire of management styles and the wisdom to know when each style should be used,” he says. “In crisis scenarios like cybersecurity breaches, for example, leadership should be authoritarian because the scenario is unstructured.”

4. Adapt your leadership style for different generations

Managers must also balance leadership styles to suit different generations. Modern workplaces will soon house up to five generations under one roof. Therefore, there will be many people with differing preferences on leadership style.

As of 2023, millennials are the biggest group in the UK workforce, at 35 percent. Modern leaders must mix old and new leadership styles that meet the needs of younger generations. Doing so will future proof organisations. However, new leadership approaches cannot come at the expense of alienating older workers.

5. Commit to lifelong learning

With the workplace evolving so rapidly, leaders cannot rely on past experience alone to get by. Ben Farmer, Head of HR at Amazon UK agrees: “Experience is not always synonymous with wisdom and judgement. And naivety doesn’t always engender novel thinking and openness to change.”

Organisations should look for leaders who understand the future as well as those with experience. “Success comes from the ability to combine understanding of exciting, new trends with the experience required to put that knowledge into action,” says Farmer.

But what is the right balance? There is no one-size-fits-all approach when balancing experience with adaptability. Achieving the right balance will mostly depend on the organisation and the sector it operates in.

6. Be conscious of culture

Organisational culture is an important factor. Risk-averse firms may prefer experience over novel thinking. Leaders may be fearful of a backlash from stakeholders should novel thinking fail. To lower risk, companies should seek leaders who use both scientific evidence and intuition when making decisions.

Ultimately, there’s no single blueprint for an effective modern leader. Each organisation must tailor their approach to leadership development. There must be a focus on organisational culture, industry nuances and employee mix.

But above all, leaders should recognise that today’s reality may be old news tomorrow.

For more expert advice, take a look at the following articles:

Blog title V2

BLOG

Asset Publisher

null The future of financial services – part 1

THE FUTURE OF FINANCIAL SERVICES – PART 1

‘If 2020 and 2021 were the years that forced banks to embrace change, 2022 will be the year in which we see that change institutionalised’.

The Financial Services industry is facing mounting pressure to deliver a digitally enhanced, hyper-personalised experience to customers and clients.

This will require banks to rethink and redefine not only their processes, but also their people strategy. Both established institutions and ambitious new entrants will need to consider how they craft a culture that champions agility and innovation, in order to attract some of the most promising tech-talent - or risk being left behind.

In the first of this mini-series, we reflect on some of the key trends emerging within the banking industry, exploring how technology is creating new opportunities – and threats – in the form of ‘Super Apps’, digital currencies and more streamlined, sustainable operations.

The Super App reigns supreme: A single portal, with a single sign in, to meet a range of needs. From social media and marketplaces to services such as Uber, the super app is consolidating many of our retail, social – and crucially - banking needs.

Having gained traction in the Asia-Pacific regions (examples include WeChat and Alipay), the super app threatens to disrupt the financial services sector, offering the functionality to check balances, pay bills and make deposits within a more integrated and streamlined interface.

And with ‘big-tech’ companies such as Apple and Amazon poised to grab ‘up to 40% of the $1.35 trillion in US finances revenue’, banks will need to consider how (or if) they can become an effective participant within these ecosystems.

Going digital: Digital currencies refers to any form of money or payment that exists electronically. This ranges from simple transactions such as online purchases facilitated by a traditional bank or credit card company, to more complex currencies such as Bitcoin, which are generally viewed ‘outside of traditional institutions.’

However, this separation is slowly eroding. The meteoric rise of the digital wallet, (set to represent 50% of e-commerce sales by 2023), the integration of blockchain and maturing regulations around cryptocurrencies are prompting a digital domination, challenging the need for physical ‘cash’ in a new era of finance. The European Central Bank, for example, is already exploring the introduction of a ‘digital euro.’

To remain relevant, institutions will need to incorporate these emerging forms of finance into existing models.

A more sustainable future: While thousands of organisations across all industries pledge to ‘go green’, a harsher spotlight shines on the Financial Services industry, as banks are expected to play a pivotal role in facilitating the funding needed ‘for the world to change its ways.’

With the Bank of America estimating that $150 trillion is needed to achieve net zero carbon emissions within the next 30 years, institutions are facing mounting pressure to cut ties with carbon-heavy companies.

But oil and gas have provided banks with ‘steady and predictable revenues’ that shareholders and regulators will be eager to preserve.

Banks will need to find innovative ways in which to balance their books, as they face a potential sacrifice to their bottom line in the short term. But those forward-thinking organisations that devise and implement a successful, sustainable strategy are set to reap the rewards, with research indicating that 54% of Gen-Z and millennial consumers would consider switching their primary bank based on Environmental, Sustainable and Governance (ESG) factors.

A balancing act: Following a flurry of pandemic-inspired innovation, many banks are applying Artificial Intelligence and Machine Learning to various back-office processes, deploying more advanced text and speech analysis to tools such as chatbots and equipping their apps with the functionality to carry out a greater range of basic transactions.

The result? Branch usage declined by an average of 35% between 2015-2020, with today’s customers anticipating that nearly two-thirds of their business with banks will be digital by 2024.

But efficiency must also satisfy customer expectation. As banks deploy a range of technologies to ‘accelerate their efforts’ toward the dream of zero-waste operations, 82% of consumers are asking for more human interactions from brands, with 36% of customers stating that they would prefer to talk to a ‘real person’ when solving issues, such as settling disputed credit card charges.

Simply digitilising an existing product or service will not equate to customer loyalty. Indeed, poorly designed digital experiences are a ‘primary attrition driver for banks.’ To thrive in a ‘phygital’ age of banking, organisations must be able to support customers as they jump from channel to channel, offering a seamless experience across the physical and digital environments.

The war for talent intensifies

As many organisations look to scale their digital infrastructure, banks will be required to compete for top talent – not only alongside direct competitors but also with technology firms who create a compelling value proposition with their offerings of ‘flexible time... deep pockets for benefits and seemingly endless no-cost perks.’

In Part Two of this series, we offer our specialist insights into how banks can build the future-ready workforces that will enable them to thrive in a new reality.

One that is digitally driven, but powered by people.

HTS Header