In Financial Services, the push for a customer-centric, digital-first approach is more important than ever. Retail leaders are seeing traditional branches increasingly complemented by digital customer experiences. This shift involves new technologies and a broader transformation driven by regulatory changes, evolving consumer expectations, and an influx of AI tools—requiring nuanced and strategic foresight from leaders. As a result, new skills and long-term talent planning are critical to navigate this complex landscape successfully.
How Can Banks Confidently Hire in an Environment of New Leadership Requirements?
The answer lies in assessing leaders for their potential.
Hire for Potential to Uncover a Goldmine of Talent
In undertaking recruiting, executive succession planning, and broader talent strategies, organizations often place too much emphasis on an individual’s previous experience and current performance. While both are important, a bigger indicator of future success lies in assessing executive potential, which can be measured assertively and provides a more accurate prediction of an individual's capacity for future leadership roles.
Potential encompasses capacity and speed: it's about gauging to what extent, in what environments, and at what speed someone can thrive and respond effectively to complex challenges within roles that are larger or more intricate. At Egon Zehnder, we gauge executive potential through our comprehensive methodology called the Potential Model, which assesses the degree to which an individual possesses four traits crucial for predicting the development of executive abilities.
- Curiosity: Seeking out new experiences, ideas and knowledge; seeking feedback and learning new things in order to change.
- Insight: Proactively gathering and making sense of a vast amount of information from a wide range of sources, and discovering new insights that, when applied, transform views, or set new directions.
- Engagement: Deeply engaging others, communicating a persuasive vision and inspiring genuine emotional connection between individuals, the organization, and the leader.
- Determination: Managing and maintaining long-term, sustained effort and focus despite obstacles and distractions, while not ignoring evidence that the nature of the activity should change.
When hiring a Retail leader, financial institutions—big or small—may ask several pertinent questions to the challenges that lie ahead for the industry: Who possesses the versatility of experience to adeptly navigate such complexities? What are the strengths of your current team? What backgrounds complement each other to effectively manage retail operations?
Although there isn't a definitive winning formula embodied in any single individual, we've observed numerous "unexpected" candidates successfully transition due to their diverse and digitally oriented background. Many of these candidates, whom we've placed, have not only thrived but also made significant contributions. How did we assertively know they would succeed? We placed our bets on their potential.
For example, in a particular search we conducted for a large retail bank, the CEO envisioned a Retail leader with both branch experience and an entrepreneurial, digital, and data-centric mindset. After deep conversations with him, we took a creative route by assessing and presenting candidates from a diverse range of industries. Ultimately, the top choice was a high-potential Consumer industry executive.
Although this executive didn’t specifically match the experiential requirements of a typical Retail leader, they scored extremely high on the potential model, which gave us confidence they could tackle the challenges of the role.
Ultimately, it's rare and potentially myopic to find a Retail executive who is proficient in every aspect required of the role. Past performance and current readiness aren’t reliable predictors of future success. To hire confidently, banks should assess potential. This approach allows for assertive hiring and the creation of personalized leadership development plans aligned with strategic priorities.
