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.
1. Focus
“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.
2. Simplify
“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.
8. Impute
“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!
Resource:
- Walter Isaacson, The Real Leadership Lessons of Steve Jobs, Harvard Business Review 2012, pages 93 et seq.
