Managing Talent When You’d Rather Be Managing Your Business
by Wendy R. Weidenbaum and Nancy E. Foxen
Most financial services firms continue to view managing people as separate and distinct from managing the business. This is particularly true in the demanding, complex, fast-paced environment of investment banking where decisions are based on reams of analytical data, knowledge of the markets, and client relationships.
But stop for a moment to think about the impact a poorly timed phone call or the wrong question to the right client can have on a deal or a trade. Much of the fallout from these types of events can be avoided by taking time to manage people more effectively. Using the 80:20 rule — in this case, spending 80% on production and 20% on managing people — will significantly improve the return on your human capital investment. The success of your business depends exclusively on the people who comprise the organization. Remember, without proper guidance, even smart people can, and do, make wrong decisions.
Like most executives, senior bankers and desk heads will most often choose to do deals and trades that bring in revenue over managing people. However, banks today are operationally lean, leaving many administrative responsibilities up to the managing directors or COOs.
So, what happens when someone makes a mistake? The fallout from not taking some corrective action when warranted can cause friction among the staff, the likelihood of a repeat event, and, of course, the possibility of lost revenue. Sometimes the path of least resistance is to ignore the problem and hope that it never happens again. There is a better way to hedge your bets.
In addition to paying people competitively, there are a number of leadership steps that can be taken to ensure all employees are as productive as possible. This includes consistent communication — through word and action — of the firm’s culture, business model, and what is expected of each employee. Consider the following:
Provide performance expectations and goals
People like to know what’s expected of them and how they are doing. At the beginning of each fiscal year, meet with each employee to discuss performance and development needs. Consider the PAR model to help guide the discussion. For each deliverable, discuss the Performance level expected, the Actions to be taken, and the Results to be achieved. Discuss what is working well, what should be done differently, and the resources needed to accomplish the goals. Plan to have two other meetings appropriately timed throughout the year as a follow-up to this discussion. The objective is to minimize performance “surprises” at year-end.
Demonstrate a real hunger for the business and a passion to win – ethically
You know the industry —share your knowledge and experience with those less seasoned. Introduce team members to clients and competitors. Keep people engaged. Encourage the right behaviors through your actions and words. Communicate through town halls, regular e-mails, and departmental meetings. To operate as a first-class organization, ensure that all employees understand that a place on the team is earned each year.
Lead by example – mentor and motivate
Demonstrate the highest level of commitment — hold everyone accountable for executing the best, most creative deals in the most professional manner. Spend time with the more junior staff to explain how they fit and the value they provide. Rotate the people into different deal teams to provide diverse experiences. Help others create their own “Board of Directors,” a group of allies consisting of internal and external contacts and clients who can give advice, guidance, support, and sponsorship.
Push people to take smart risks to raise the level of the game and give constant feedback
Provide motivational feedback that catches someone doing something right. Formative feedback can be either constructive or destructive. Make it constructive by focusing on the behaviors exhibited, not the person. Always provide examples and be honest and direct. Think about the impact your words will have on the individual before you say them. Don’t provide feedback in the heat of the moment; wait until you are calm and levelheaded. Give feedback in small amounts and then check to see if the feedback was heard accurately. Emphasize future actions.
Establish and communicate the firm’s reward and recognition philosophy
Communicate the firm’s philosophy on expected levels of performance, acceptable behavior, and promotion criteria in a clear, concise manner. Employees respond favorably to knowing what’s expected as well as the possibilities of what lies ahead. Have a transparent process.
Hire and fire wisely
Communicate up front the job that needs to be done and the organization’s culture, and know what knowledge and capabilities will be needed to help ensure success. Spot gaps in talent quickly and fill them internally or hire from the outside. Identify important positions that are critical to the overall success of the firm. When someone is not working out, give a reasonable opportunity to improve, document discussions and events, and, if necessary, terminate the person with a generous package and respect. Remember, it’s a small world.
Select the right person to do the right job
Know each employee’s strengths and weaknesses. Who is good at closing a deal? Who is best at business development? Match individuals with the right job, yet don’t pigeonhole them. Give employees the opportunity to excel and take on new challenges and add new responsibilities, clients, etc.
Know your stars and emerging stars
Differentiate and pay for performance. Acknowledge outstanding performance. Know who has leadership potential versus who will remain a rainmaker and develop accordingly. Consider if any stars are at risk and determine how you will retain them.
Get and stay involved
Set and get the pulse of the organization. Walk the floors. Ask employees what deals they are working on, what the market is doing, what competitors are up to. Respect each person’s opinions. Set the right tone.
As a business leader, you can demonstrate your commitment by taking the time to manage your most important asset — your people.
The latest data shows that people do not leave organizations — they leave managers. People will do almost anything for a manager who respects and appreciates them. And, that is the rub. What do you need to do to show your respect and appreciation efficiently? Bottom line, get a return on your employee investment by establishing an environment where people can become the best they can be — help all individuals reach their potential.