Leadership/#Disrupted: A New Lens on Leadership Competencies

Technology and InnovationFinancial ServicesAssessment and Benchmarking
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+ 7 authors
October 29, 2021
8 min read
Technology and InnovationFinancial ServicesAssessment and Benchmarking
Executive summary
A new generation of banking leadership is being defined by its ability to respond quickly to multiple forces that are disrupting traditional leadership agendas.


This paper continues our series that explores the growing importance of innovative and inclusive leadership in banking and is based on a study of over 9,000 senior executives carried out over the past four years. By exploring the underlying competencies and behaviors, we look at how banks can best adapt their approach to developing their leaders.

Faster growing firms have stronger leaders

Our leadership assessment data suggests a direct correlation between stronger innovative and inclusive banking leadership and higher performing organizations.

With exceptional talent already working at exceptional organizations, how can your firm differentiate its approach to sourcing and promoting talent?

  • Are you fully leveraging available data assets to better identify leaders with these competencies?

  • Are you targeting the specific leadership competencies that are needed to succeed in the context of its operating environment?

  • Are you minimizing bias in the selection and evaluation of these competencies?

Target competencies that tackle todays needs

Success factors are not static over time. What makes for an effective leader in the years after a financial crisis is not necessarily what makes for a successful leader during a period of digital disruption or changing societal and customer expectations.

Our assessment data shows that the demand for leaders with the characteristics and competencies associated with stronger innovation and inclusion leadership is growing as firms look to tackle these emerging challenges.

Banks are increasingly targeting experiential, creative, and empathetic characteristics. Conversely, we are seeing lower indexing on more compliant and cautious behaviors.

Continually refresh target competencies as new strategic priorities emerge. By using metrics that are sensitive to the changing nature of the business around them, leaders will improve an organization’s ability to adapt to new ways of thinking and minimize the longer-term risk of the organization becoming obsolete.

Focus on how key roles are evolving

Three roles have seen a particular elevation in their importance and impact in banking, both due to COVID-19 and longer-term structural shifts in the industry. We have seen a corresponding shift in the competencies that are being prioritized for these roles.

Chief Financial Officers (CFOs)

Companies are looking to strategically reshape their businesses, creating demand for new types of financial officers. The role is increasingly cross-functional, driving transformation and playing a proactive role in influencing change in the company. Many CFOs are now also at the forefront of digitization.

Chief Human Resources Officers (CHROs)

CHROs had elevated roles during COVID-19, visibly helping CEOs manage the present and lead their companies into the future. They need to be the stewards of change across multiple stakeholder groups, staying abreast of the drivers of transformation, while remaining sensitive to the needs of an increasingly virtual employee base.

Understand the elevated needs and impact of mission-critical roles within your organization, and make sure that you are targeting the necessary competencies to deliver against these in hiring, development and succession planning.

Reduce bias to reach your full potential

Data can help identify blockages and bottlenecks that prevent a talent pipeline from running optimally.

One challenge occurs when assessment processes over-index on certain competencies, creating a barrier to progress or glass ceiling for groups that exhibit those traits less frequently. One example in the selection of CEOs is the bias towards confidence, which is typically a male-oriented trait – and so we see fewer women CEOs.

Our cross-industry benchmarks show that women who are elevated to the CEO role tend to be stronger across a range of other competencies than their male counterparts.

As such, some businesses may be failing to reach their full potential because of systemic selection bias. Breaking out of this cycle can be challenging, as employers tend to gravitate towards people who think and act like them, and so it can often be self-reinforcing.

Talent leaders should set up regular and objective evaluations of selection and promotion processes to identify and eliminate inherent biases in the way that talent is measured, with the aim of maximizing the potential of leadership teams.

Appendix: Methodology

Changing how we measure potential

The methodology was developed by our in-house psychologists in partnership with Hogan Assessments. It is based on studies of “best-in-class” senior leaders, mapped to a 95% confidence interval, and synthetically validated against a dataset of 5.5 million executives.

Mark Temple leads Knowledge for Russell Reynolds Associates’ Financial Services Sector. He is based in London.





Leadership/#Disrupted: A New Lens on Leadership Competencies