Pub. 9 2019 Issue 4

8 www.azbankers.org W HILE ALL COMPONENTS OF THE REGULATORY CAMELS RATING ARE CRUCIAL TO A WELL-RUN FINANCIAL INSTITUTION —MANAGEMENT OF CAPITAL, ASSET QUALITY, EARNINGS, LIQUIDITY, AND SENSITIVITY — THE MOST VITAL TODAY IS THE “M” — MANAGEMENT. IN TODAY’S UNPRECEDENTED 24/7 WORLD OF CONSTANT CONNECTION, EMERGING TECHNOLOGIES, UNCERTAINTY, TALENT SHORTAGE, GLOBALISM, AND RETIRING BOOMERS, ADDRESSING THESE BUSINESS CHALLENGES REQUIRES A NEW TYPE OF LEADER. ONE MIGHT SUGGEST TO THE REGULATORS THAT WHILE “MANAGEMENT” IS A MUST, THE LEADERSHIP OF THESE COMPONENTS IS THE REAL KEY. THERE IS A DIFFERENCE. As reported in “Banking and Capital Markets Trends 2019” by PwC, more than 60% of the banking CEOs surveyed believe it’s become more difficult to hire workers in their industry. And, ac - cording to a 2014 study conducted by Deloitte, leadership remains the top talent issue facing organizations around the world, with 86% of respondents rating it as “urgent” or “important.” Only 13% of respondents say they do an excellent job developing leaders at all levels — the largest “readiness gap” in the survey. Lack of succession planning, talent readiness, and investments in technology are all impediments to the success of the financial services industry. How do we develop the next generation of leaders that can effectively serve aging populations that banks have depend - ed on for deposits while meeting the needs of the next generation, which does the majority of its everyday banking electronically? The weight of responding to these challenges should not lie only with the CEO. To secure the future success of your financial insti - tution, here are three critical strategies boards should discuss with their CEOs to attract and retain the right talent. 1. Develop a Customer-Centric Culture Driven by En- gaged Leadership Create a culture of “safe” empowerment where future leaders can take “ownership,” knowing they have support while taking on new challenges. Put them on important strategic projects or task forces. Give them a meeting to organize. Put them in front of the board on occasion to share successes and challenges, such as growing business, implementing new technology initiatives, or increasing efficiency. Grow your own, or purchase what talent you must, well ahead of the succession vacancies. This strategy is best accomplished with, and by, an effective HR leader who understands the process of talent assessment and succession readiness. One of the most fulfilling and revealing processes a CEO can engage in with their leadership team is strategically ensuring time and thought are spent on thoughtful contemplation of the existing talent pool — and the needed talent pool going forward. Consider designating a small “innovation” group to spend uninter- rupted time each week focused only on innovation possibilities. 2. Invest in Leadership Development and Coaching Think about creating in-house professional development offerings Cultivating the Next Generation of Leadership: Three Priorities Boards Should Address With the CEO By Terry Saber, Principal, Saber Advisory Group, LLC