Do Bank Management Training Programs Create ‘Leaders of Yesterday’?

The management training and executive development programs at most banks and credit unions may be reinforcing the culture and business processes of the past instead of developing leaders for tomorrow. How should training be changed to reflect the needs of digital transformation?

When I began my career in banking, the first step was to complete a multi-year management training program. This entry-level program was a way to develop leadership skills and to provide exposure to various departments of the bank. The program consisted of short-term ‘rotations,’ from three months to more than a year, starting in the branch system and including consumer lending, customer service, commercial banking, and various other functions.

While this rotation training provided a way for senior management of each division to determine potential ‘best fit’ for trainees upon completion of the program, it also allowed trainees to learn organizational rules and norms. In other words, the new management trainee would learn the ‘way it’s done’ in each area visited. Most management training programs are still structured in this manner.

In today’s increasingly evolving business environment, this form of management training may not be the best solution. One reason is because, with the future of almost all jobs potentially at risk, existing employees may be less than forthcoming in helping management trainees succeed (and potentially take their jobs). In addition, because of the nature of the programs, there is little encouragement to ‘rock the boat,’ which can stifle the creativity, innovative thinking and risk taking that is most needed now in financial institutions.

The question then becomes, are today’s management training programs aligned with the objective of many organizations to become more agile, more innovative, more digitally focused, and more customer-centric? Or do current management training programs simply reinforce current values, behaviors and processes that are already in place? If the latter is the case, there will be continuous reintegration of existing habits and practices, thus slowing change.

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Need To Build a New Normal

Most organizations would agree that the ‘old way’ of doing things no longer delivers desired results in an increasingly digital world. New strategies need to be implemented, new technologies need to be leveraged, and existing business models need revamping. Unfortunately, as we send new management trainees through an organization that may not be completely on board with these new norms, we create leaders of yesterday as opposed to leaders of tomorrow.

Even if the management training program is structured to reinforce new management practices and ways of thinking, the management trainees will certainly come in contact with old school norms and thinking that will conflict with the goals of the program. It is therefore important to foster behaviors that help develop a culture supportive of the organization’s new objectives. This may require the new management trainee only visit areas of the bank or credit union where existing leaders (and their teams) have already bought into the new norm.

The reality is that different divisions of a company can have different subcultures, either supportive or in conflict with the desired mission of the organization — especially during times of digital transformation. There could be large internal gaps in the agility, innovativeness, digitalization or customer-centric nature of one division versus another.

If the new management trainee is exposed to the areas of the organization where the highest cultural readiness for digital transformation can be found, the learnings will be more easily communicated to other areas of the organization. This will also enable peers to be more open and receptive to embracing the transformation desired by the organization.

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‘Change Agent’ Management Rotation

A strong case can be made to completely rethink executive training within financial institutions. On one hand, there is a need to avoid exposure of brand new management trainees to the ‘old ways of doing things,’ where the creativity and spirit of the new employee could be crushed. In addition, we can’t rely on Human Resources or some other group to build a mindset that differs from what the new employee is actually encountering as they continue rotation.

Beyond making sure new leaders are trained appropriately, there is an increasing need for existing leaders to participate in a rotation program that can impact more areas of the organization at a faster pace. By selecting existing employees throughout the organization who already understand and practice the skills desired in the future, there is a better chance of eliminating iconic practices that support historical cultural values.

As these ‘change agents’ expand their influence within the organization, new norms will be created at a much faster pace than would be possible with normal management promotions and transfers. In addition, as opposed to just a handful of new recruits coming into the organization, the ‘change agent’ rotation could involve dozens of existing employees with a wide range of tenure and departmental experiences.

I experienced the power of this concept in a recent meeting with leaders at Intesa Sanpaolo, who have been selected to participate in a 3-year rotation program across the entire organization. Including leaders of all ages and experiences, these carefully chosen men and women were expected to make major impacts on all divisions and subsidiaries of the bank during their program. At the end of the program, they would be placed in a role most beneficial for them and the bank.

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Building New Skills With Existing Employees at Amazon

Another organization that has decided that it is more beneficial to train existing employees at all levels of the organization as opposed to recruiting brand new employees is Amazon. The company has announced that it will spend more than $700 million to train 100,000 employees for higher-skilled jobs over the next six years.

This training will be offered to workers at all levels of the company. The candidates will be able to select one of several programs, ranging from learning skills for other jobs at Amazon to earning certifications that could be used outside the company. Options include being able to attend the company’s Machine Learning University or to learn software development skills at the Amazon Technical Academy.

Not only does this build loyalty within Amazon and allow the company to develop specialized skills that the company will need in the future, but it allows them to build digitally-ready employees at a time when available talent in the marketplace is in short supply. Obviously, while Amazon is already a digital organization, this type of training helps reinforce the leadership (and employee) mindset the firm wants in the future.

Proper Executive Training Impacts Revenues

Rethinking new management training programs and executive development processes within an organization is no longer optional. It is the key to success.

George Westerman, Research Scientist at the MIT Center for Digital Business, described digital transformation as “Using technology to radically improve the performance and reach of an organization.” He explained that when digital transformation is done right, it’s like “a caterpillar turning into a butterfly,” but when done wrong, “all you have is a really fast caterpillar.” He also pointed out that businesses that have become digital masters are 26% more profitable, and that digital transformation is driven by the leaders at the top of the organization.

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