- Walter Isaacson, The Real Leadership Lessons of Steve Jobs, Harvard Business Review 2012, pages 93 et seq.
Thursday, August 16, 2012
Leadership Lessons of Steve Jobs in the Banking Business?
In April of this year, the Harvard Business Review has published an article written by the biographer of Steve Jobs, Walter Isaacson. This article pretends giving us the “real leadership lessons of Steve Jobs”. I must admit that neither have I read Isaacson's book nor am I a particular fan or specialist of Steve Jobs and his career at Apple.
The article was, therefore, the chance to fill my knowledge gap by reading 10 pages instead of hundreds of pages in Isaacson's book. The commercial logic of Isaacson's HBR article is probably not to replace his book but, to the contrary, to lead people reading his book in addition to the 10 HBR pages.
Be that as it may, when reading about Jobs' leadership principles, I was wondering if and how they can apply to the banking business.
“Deciding on what not to do is as important as deciding what to do”
It might be right that people tend to overlook this in their every-day life. However, it still remains a self-evident principle and, as such, applies to any business or personal situation. Consequently, it also holds true in the banking business.
“Zero in on the essence of things and eliminate all unnecessary components.”
“Conquer rather than merely ignoring complexity.”
“To be truly simple, you have to go really deep.”
“Being able to get to whatever you want in three clicks.”
You may like the above quotations or not. The principle however, fully applies to the legal and finance business as I experience it. As a matter of fact, finance contracts become longer and longer and ever more complex. Everybody who deals with ISDA or LMA contracts knows what I am talking about.
I sometimes wonder where this complexity comes from. It seems that people often try to cover any possible business situation contractually instead of caring about the business relationship itself. I strongly believe that this is wrong. I am convinced that the future will always be different from what you expect it to be. (Otherwise, life would be boring, wouldn't it?) Therefore, any attempt to cover all possible future scenarios must necessarily fail.
In such a situation, you should get the basics right and be specific and extensive on the underlying principles and interests guiding your business relationship. It's like buying a car: Decide on the main issues such as performance, design, and price but forget about questions such as “Can I connect a USB stick to the HIFI system?”.
The obvious and most important problem here is to differentiate the big points from an unimportant negligibility. How can you do that when it comes to legal issues? Unfortunately, there is no answer to this question. In my view, only experience can help you here. In addition, you need the right specialist because, the more big points there are, the more your lawyer can charge...
3. Take responsibility end to end
“Make sure that hardware, software, and peripheral devices are seamlessly integrated.”
This is very difficult in banking as responsibility is usually shared among many participants such as front office, risk department, back office, tax department, legal department, compliance, and numerous external advisors.
However, the idea is right when it comes to a bank's relationship with its clients. The client is obviously only interested in the final product and not in assignments of guilt among a bank's departments.
4. When behind, leapfrog
“Instead of merely catching up by upgrading and imitating, create something radically new.”
“If you don't cannibalize yourself, someone else will.”
Definitely yes! This should apply to any industry.
5. Put products before profits
“Don't compromise on this maxim.”
“Focus on making the product great and the profits will follow.”
“Profits are there to allow you making great products, not vice versa.”
“Products, not the profits, must be the motivation.”
Were sub-prime mortgages good products for retail clients? Were sub-prime mortgage backed notes issued by securitization vehicles good products for investors?
6. Don't be a slave to focus groups
“Don't ask customers because they don't know what they want until you have shown them.”
“Caring deeply about what customers want is much different from continually asking them what they want. It requires intuition and instinct about desires that have not yet formed.”
Again, this should apply to any industry.
7. Bend reality
“Do something that takes months in days.”
“Life's ordinary rules don't apply to you.”
“You can do the impossible if you don't know that it is impossible.”
In don't think that this is good advice in finance. If you don't take the necessary time, you will not understand your product. In addition, if you don't face reality, you may disregard existing and threatening risks.
“People judge a product or company on the basis of how it is presented and packaged.”
“The design of your product must impute a signal rather than be merely functional.”
In my view, marketing and public relations activities of financial institutions are usually well done. If only the never ending scandals (Sub-primes, LIBOR, etc.) could stop...
9. Push for perfection
“Delay your product's release until it is perfect.”
“Even if nobody will ever see your product's insights, make them nevertheless as beautiful as possible.”
I refer to my above comment under No. 2. The basic principles should be perfect.
10. Tolerate only A Players
“Don't be so polite that mediocre people feel comfortable sticking around. If something sucks, tell people to their face.”
“If you have really good people, you don't have to baby them.”
“By expecting people to do great things, you can get them to do great things.”
By definition, any company in the world pretends having the best employees. The only question is who defines what “best” means!
11. Engage face-to-face
“There is a temptation in our networked age to think that ideas can be developed by e-mail and chat. That's crazy.”
“Make people mingle with people they might not otherwise see.”
“Jobs hated formal presentations, but he loved freewheeling face-to-face meetings.”
This is definitely missing in the banking business, above all in financial markets. Too much telephone and email and not enough face-to-face meetings! However, face-to-face meetings are difficult to promote when people don't work close to each-other and company budgets are tight.
12. Know both the big picture and the details
Common sense and self-evident! The question is how to apply this in practice if time is money and, at the same time, deals become ever more complex.
13. Combine the humanities with the sciences
Difficult in finance!
14. Stay hungry, stay foolish
I didn't know that Jobs was a HR consultant!