How to be a good leader in banks and financial services firms

31 May, 2023Ouida Taaffe
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In an LIBF podcast, Stuart Tootal, the founder of Matero Consulting and a former colonel in the British army, and Jeremy Takle, the founder and CEO of Pennyworth – and a former marine in the Danish armed forces – talk to Ouida Taaffe about how to motivate and support staff in financial services firms during tougher times, why ‘command and control’ doesn’t work – and what makes a good leader.

In a tough economic environment, firms start taking away costly perks and looking for ways to boost productivity. One approach can be ‘command and control’. The leader requires everyone to step into line and follow orders. But is that really the best way to get the best work out of people?

Is command and control the right way to lead a firm?

"In the military environment, which is designed for combat, your leadership structure becomes incredibly flat,” says Stuart Tootal. It comes down, Tootal says, to giving people direction on what needs to be achieved and why – but not how. “You’ve got to empower people to use their own initiative,” he says, which means no micromanagement. “You’ve got to give people lots of latitude, but also the boundaries, skills and tools to get the job done.”

How does command and control work in practice within a bank?

“There’s a difference between how this has traditionally worked in big banks and how it works today in fintech startups, which try to embrace a much more agile and purpose-led structure,” says Jeremy Takle.

Takle says that, traditional banking is “very functionalised and so it's very difficult for individuals in the business to understand what really is going on, because they’re only seeing one set of activities that relate to the function.”

Takle says that FinTechs, on the other hand, try to build the business around small teams that have a very clear purpose, but also have all the disciplines around the table. He says that makes it much easier for staff to take tough decisions, and to be part of taking tough decisions, because they can see the whole picture for themselves.

Do FinTechs find it hard to find and hire people who are happy to work more autonomously?

“We're combining people who have worked only in traditional siloed banking models with people who have only built technology products,” says Takle. “And it is a new skill to learn, to work in small autonomous teams and to think holistically around the problem that you're solving. But, in my mind, it's absolutely something that motivates.”

“The model works really well when things are going both well and badly,” says Takle. He says that, when there is plenty of capital available, it means quickly spinning up new teams and new products. If a product is not working, on the other hand, teams can quickly be repurposed to do something else.  

What is leadership and what makes a good leader?

“My definition of a good leader is someone who can set the vision and the direction,” says Tootal. “The team and the organization need to move in and then can deliver the support to enable and  empower the team to go on that journey. and to think of their own solutions.”

What’s crucial, Tootal says, is that people can carry out the role they are tasked with. A central part of the leader’s job, he says, is to make sure that staff have the skills and the tools they need. Leaders also must harness the diversity of staff, communicate across silos and make sure that decisions are thought through logically. Not least, they have to give staff the space to check and challenge decisions.

How can banks go about good leadership in practice?

“Setting accountability and delegating though mission and purpose, is a core element of how we operate as a firm,” says Takle. “We only hire people that that really are willing to buy into that leadership process. We do not want top-down control. With the right leaders you can  achieve a great deal, even with less experienced members of the team.”

How do you select good leaders?

“There is a degree of selecting people with the right character traits,” says Tootal. “But I'm a great believer in the fact that leaders are made not born. The military looks for people with the right potential. Then it begins to train them. That's 18 months of training that the business world cannot replicate. But there are so many lessons in leadership from the military experience.”

Among them, Tootal says, are the ways in which the military has been dealing with rapid technological change, ‘non-traditional actors in the operating space’ and increasing scrutiny and regulation over many decades.

Is there such a thing as ‘leadership material’?

“I think there are certain characteristics,” says Tootal.  “One of those is realising that you never know it at all, you're going to continuously develop. But if you're going to develop as a leader, you need to not just be self-reliant in your own learning but be in an organisation that encourages that. Empowerment is about experimentation. Experimentation means that people are going to make mistakes. You want to profit from those mistakes.”

Tootal says a leader needs imagination and creativity, but also ethics, empathy and the ability to engage with people. That, in turn, means having the confidence to recognise their own vulnerabilities, often publicly, as, for instance, when taking on a new role in an unfamiliar department.

What advice would you give to students who are starting their career and want to progress into a leadership role?

 “Leadership is a privilege,” says Tootal. It's fun, it's exciting, it's productive, it has imagination and it's about people.  It's not about being a manager – managers do things right. Leaders do the right thing and that's often about difficult decision making.”

Tootal says that the most rewarding thing in his work as a solider, which he “loved” was getting teams – often of incredibly young people – to collaborate to take things “way beyond” where he had thought they could go. “You thought, wow, this this was difficult, this was challenging, and I can't believe the results. That's why anyone would want to be a leader and be a good leader who empowers people.”

“For this model to work at all, the leader who has delegated that accountability, has first of all keep an eye on that,” says Takle. “You don't just let the team go and they can come up with anything they like. It's a constant responsibility of yours to make sure that everything makes sense. The accountability is delegated from you and therefore it belongs to you ultimately.”

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