There is no second First Place. Once the baton is dropped in the leadership race, your bank is at risk. Strategic succession planning is a critical step to serve the purpose of leadership continuity and mitigate unnecessary risk. If you, or any person in a critical role, unexpectedly departs or is unable to perform at expected levels, and step-in or drop-in internal candidates are not readily available assets, your stockholders are not being served. If so, risk is not effectively mitigated. This is not a gray area; it is very black and white and needs more attention in financial organizations.

This article discusses the depth and source of expertise, leadership presence, adaptive communication skills, and the need for mentors as current advanced middle-career and legacy subject matter experts leave the field. Long-time high-performing professionals are reaching their advanced middle or legacy career stages. As they decide to use their gifts and talents in new ways, financial institutions will experience a depletion of their most important asset—the human resource.

Skills and Experience: More than Book Knowledge. Skill development requires multiple areas of expertise including asset/liability management, risk to capital, profitability, funds transfer pricing, investment and credit portfolio knowledge, and relevant understanding of regulatory and compliance issues. Asset/liability and balance sheet management professionals develop an intimate knowledge of the organization that is unique to their role and how they communicate and influence the organization. Positioned properly, they have the challenge of blending analytical expertise, market, and institutional knowledge with interpersonal communication throughout diverse areas and functions of the organization.

The diverse array of required knowledge is not merely learned through education such as earning a Master’s degree, reading a book, or watching a PowerPoint presentation. The learning, however, starts in school, and continues through ongoing reading and continual exposure to learning events.  Foundational expertise of this nature needs to be embodied in the professional so it is readily available as needed to respond appropriately to external markets while at the same time holding a larger vision to position the bank for safety and soundness regardless of external changes.

This embodied expertise comes only through a strong commitment to learn, practice and apply, relearn, practice, and take into effective action and decision making. Depth of learning and knowing how to make informed decisions requires the experience of the real world in diverse situations and with a multitude of challenges. As legacy high performers start to transition in their careers, a void of expertise will develop in the industry. The most critical pending missing ingredient is leadership expertise and presence.

Personal Leadership Skills. Experience observing numerous asset/liability executive searches, designing leadership development programs for financial organizations, and publishing many technical articles results in one important assessment: the most important skill of a financial executive is leadership  presence. As an executive, you may have all the right answers, analyze data and produce the right recommendations, and still not be effective. How you present the information, the style of communication you use, and the believability of your message are critical to the organization.

Our industry is replete with very smart people who do good work with outstanding results, as well as with highly intelligent professionals who become disenchanted when they are not heard at work and their recommendations go unheeded. Eventually, after dissatisfaction and frustration, these professionals change employers and the cycle repeats wherein their recommendations are not appreciated.

Again, the cycle repeats and they change employers. The dissatisfaction and frustration may become chronic or, alternatively and preferably, they become aware that a fundamental shift needs to happen. The difference is how the individuals show up and presence themselves in sticky conversations, deploying resources and influencing others in the organization.

Schools and organizations miss providing development opportunities for the soft skill side of the  asset/liability management professional. The critical missing ingredient is leadership presence. How you are seen by others is really what it is all about…your presence.

As an example, you spend hours preparing a presentation for an ALCO meeting on product and service pricing and expected market volatility. After your presentation of data, information, and recommendations, you leave the meeting feeling frustrated and discouraged, and this is not the first time. A disconnect exists between what or how you present and your expected outcome. Once you shift leadership presence and style to be more generative, the chronic dissatisfaction and frustration shift to engaged action and commitment.

So what does leadership presence have to do with strategic succession planning and ensuring the baton is not dropped? If you are in your advanced middle or legacy career, you are obligated to support leadership continuity. Alternatively, those in early and mid-career are required to ask for support in developing their own leadership presence. Both of you need to be proactive: the one passing the baton over the next 5-10 years and the second one who receives the baton.

Mentoring with Intellectual Capital and Leadership Presence. Organizations that demonstrate a proactive commitment to advanced learning for employees are more creative, innovative, and effective in managing change and crises. School helps us learn the basics; organizations need to harness that learning into practical application and, in doing so, create knowledge. A major shift is happening right now with Baby Boomers moving toward retirement, thereby creating a gap of millions of jobs. Some might say this gap in availability of people is not an issue in today’s economy. The wise ones, however, take a strategic view in planning for tomorrow and the not-too-distant future, assessing talent needs and bench strength. Some organizations are requiring employee development to be integral to the performance and responsibility of executives, for continual development of bench strength at each level of the organization. Each sitting executive possesses intellectual capital that needs to be shared. A long-time successful chief financial officer who shares an embodied base of knowledge with junior and senior analysts is creating a lasting legacy and supporting organization sustainability.

Listed below are some questions you can ask the emerging and young professionals in your finance and treasury functions. The answers will help shape how you mentor and support their future success:

• What are the opportunities for emerging leaders in defining and shaping their careers?

• What are the leadership challenges emerging leaders face in defining and shaping their careers?

• What are the distinct learning styles of emerging leaders?

• What are the leadership development needs you have encountered as an emerging leader?

Get Started. The time to start is now; don’t wait until a critical position is vacated. Start these conversations now over a brown-bag lunch or Friday afternoon coffee. You will be seen as a more effective leader because you share your knowledge with others and create more value on the human resource side of your balance sheet.

— Deedee Myers, Founder and CEO

DDJ Myers Ltd. and Advancing Leadership Institute

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