Developing Leadership in Financial Services: From Star Athlete to General ManagerBy: Jeff Kirschner
Developing leaders in financial services is similar to identifying good general managers in sports. In both, the best individual contributors do not always make the best leaders.
In sports, stardom as an individual athlete does not always lead to success in a managerial role. Indeed, while there are a few examples to the contrary, most general managers were not great athletes but people who spent long, arduous years coming up through the ranks of coaching and scouting to build the skills needed to manage talent effectively. The same is true of great managers in financial services—the star trader or portfolio manager is not always the best candidate for promotion to leadership roles. Promoting a star individual contributor too quickly can lead to disaster for the individual and for their team.
The competencies needed for success as an individual contributor are very different from those needed for success at senior leadership levels. Great traders are able to recognize and intuitively react in situations where money can be made. A great quarterback can take his team down the field with two minutes left on the clock. In each case, decades of practice have trained the individual to act instinctively, quickly focus the efforts of the team, and serve as the point person to drive home the win. For traders, much of their success comes within a relatively short period of time in which they can leverage their intuition to make a risky but ultimately profitable decision. For star athletes, their reputations rest on their ability to deliver during crunch time with lots of pressure on the line. Neither the trader nor the athlete is thinking and strategizing as much as reacting from memory, executing a learned series of activities that have resulted in success in the past. They are able to recognize the situation and apply the right algorithm to solve the problem in a split second. Their success is born of their experience.
Contrast the skills needed for success as an individual contributor to those needed for success as a general manager. GMs are called upon to develop long-term strategies that enable everyone to win. In financial services, that requires an entirely different sort of intellect—one that includes a broad, future-oriented view and utilizes analytical skills to create strategies that drive competitive advantage. Sports executives similarly need to commit to a strategy that drives advantage over their competition, whether by building through the draft or by bringing in expensive free agents. In both cases, aligning people with strategy becomes critical to driving consistent results.
Identifying, developing, and retaining key talent are the hallmarks of long-term success in general management:
- Identifying talent: Getting the right people on the bus requires a clear understanding of what the key success factors in a given situation are and then applying discipline to talent acquisition. One common error occurs when star talent or individual contributors assume that what has made them successful is what will make everyone else successful. In fact, there are many ways to be successful, and thinking about the right combination of competencies on the team is a better talent-acquisition strategy than stamping out a lot of clones. Ability to assess and onboard talent is a core competency for general managers. It is more effective to hire the right person in the first place than to attempt to change talent once you have them, so put your resources up front to make sure you are hiring the best.
- Developing talent: This is another area in which star athletes can be challenged. Since they are naturally gifted, it is more difficult for them to coach others less talented than they are. Average athletes, who had to learn how to compete beyond their inherent talent levels, have more insight into developing a more diverse talent pool. They understand the importance of helping others be the best they can be and recognize that they should hire and promote others who are more talented than they are. That is why many general managers come from modest means. Their ability to scratch and claw their way up against adversity served as the crucible for their success, and they demonstrate the grit and determination that typifies outstanding leaders.
- Retaining key talent: Most sports teams and corporations support the idea of keeping the best talent for a long time. Many of the great sports and business dynasties have prioritized the retention of home-grown talent. To retain talent, enterprise leaders will need to see themselves in service to the team, not the other way around. In doing so, they can create a winning culture that supports ongoing development and growth, qualities that are key for retention.
This graphic summarizes many of the shifts that star individual contributors need to make to ensure their success as a general manager:
Building the competencies needed for success as a general manager can take decades to achieve. Success as an individual contributor in no way assures success in a managerial role. A clear understanding of the business situation is needed in order to select the right raw talent for leadership roles. By selecting wisely, carefully planning career paths, and ensuring the right sequence of developmental experiences, one can improve the odds of success in a general manager role.