Banks with innovative and inclusive leaders are more likely to experience growth, according to Russell Reynolds Associates' recent survey.
The study identifies forced digital acceleration, social awakening and sustainability as the forces driving demand for these innovative and inclusive leadership competencies.
The study has also revealed a powerful competency combination – best-in-class inclusive leadership is closely related to best-in-class innovation leadership. Close to seven in eight (85%) effective innovation leaders demonstrate heightened inclusive leadership competencies, the survey found. An inclusive culture promotes innovative behaviours, and similar leadership competencies are needed to drive organisational change.
The five signature traits of innovation leadership are innovative, disruptive, bold in leadership, socially adept, and determined. Inclusive leadership can be divided into two levels: Intra-personal and inter-personal. For intra-personal inclusive leadership, the key attributes include identifying motivations, privilege and acumen, reading situations and challenges, reflecting with empathy, and holding oneself accountable. Conversely, inter-personal inclusive leadership refers to those who can leverage differences to win, foster open dialogue, develop with feedback, and hold others accountable.
The benefits of innovation and inclusion on company performance are significant:
According to the industry benchmark, many banks are still lagging other sectors in driving innovation at an organisational level and building inclusive working environments. Four questions banks should ponder:
What are the systemic hurdles to developing a more innovative and inclusive talent pipeline?
What are the implications of these hurdles for the organisation?
What are the solutions that banking leadership can put in place to overcome them?
What are the inherent strengths within banks that can help to accelerate these efforts?
For banks that can lead innovatively and inclusively, there is an opportunity for them to gain a significant competitive advantage over their peers, given the broader sector's relative immaturity. The executive consulting firm recommends three solutions to develop talent in a low inclusion and innovation environment:
Changing how to analyse and develop talent: By exploring the underlying competencies and behaviors impacting these results, as well as those from other industries, adapt your approach to develop your senior executives.
A new lens for identifying talent: Identifying ways to uncover the individuals and teams within the organisation that may be a stronger potential source of innovative or inclusive leadership.
Mobility and cross-fertilisation: Given that other industries can be a fertile source of innovation and inclusive leadership talent, how can banking effectively absorb these leaders without transplant rejection?
"To stay relevant and compete in this fast-changing marketplace, we must find leaders who can manage a complex business in a sustainable way. Leaders need to be more agile and push for a corporate culture that adopts the mindset of continuous innovation and is much more inclusive, while striving to create diversity within the organisation," said James Diggines, who co-leads Russell Reynolds Associates’ financial services sector.
Russell Reynolds Associates' report Leadership/#Disrupted surveyed more than 6,000 senior executives across the banking and financial sectors to benchmark new indicators of effective leadership.