Choosing Well-Rounded Leaders Builds the Present and the Future
A few weeks ago I spoke with a community bank CEO whose organization has grown from nothing to over $1 billion in assets in 18 years. When I asked him to name his greatest lessons along that journey, without hesitation he named learning to choose the right people as his most important lesson.
Similarly, when I spoke with CEO James Schenck at Pen Fed Credit Union he very quickly mentioned the critical nature of surrounding himself with the right people, and went on to discuss three filters he uses to select Pen Fed’s leaders. These three filters are people skills, conceptual thinking, and functional expertise.
People Skills: James looks for people who are both team players and drivers. Those two don’t always go hand in hand. Often when we hear the term “drivers” we might think of people who are talented, pushy, aggressive, and perhaps just a little obnoxious and individualistic. However, these ideas are more stereotypical than fact-based.
James wants leaders who are aggressive but also sensitive to the needs of their teams and individual teammates. Just because they are drivers doesn’t mean they have all the answers or take all the credit. A driver can very easily move their team forward while letting the spotlight shine of the performance of their team.
Conceptual Thinking: Leaders must be able to envision 3..5..10 years down the road and create it. In my experience this is not typically what financial institutions look for in their leadership. Some FIs actually discourage smart, conceptual thinkers with the ability to bring entrepreneurial ideas to fruition, but not at Pen Fed.
Functional expertise: The most common attribute companies look for in their leaders, but in Pen Fed’s case it is only one of three. Of course leaders in areas like mortgage lending operations and IT need to have a good grasp of the functions they lead, and to be growing in their expertise. However, functional expertise has to be accompanied by people skills and conceptual thinking to become a Pen Fed leader.
According to Gallup’s Study on the American Workforce, the number one action you can take to improve the performance of your organization and the buy-in of your employees is to hire great managers. However, the Gallup study goes on to state that companies hire the wrong candidates 82% of the time.
Why is that? Perhaps it’s because far too often companies overemphasize functional expertise in their leadership selections instead of also ensuring those candidates have strong people skills and conceptual thinking.
Our business schools and universities place tremendous emphasis on acquiring technical competency, but almost none on people skills or conceptual thinking. I know first-hand because I attended a top business school with this very emphasis. In addition, as we advance in our careers our functional accomplishments tend to get us promotions rather than our other skills.
The way James chooses leaders at Pen Fed differs from the way it is done at many other companies, and that’s why Pen Fed has been able to distinguish itself.
Leadership Selection Exercises
- What criteria do you use to select leaders in your organization?
- As you consider your leadership selection criteria, are you satisfied, or do you need to add criteria around aspects such as people skills or conceptual thinking?
- How do you evaluate leadership performance? Is it solely around current year bottom line operational performance, or do you also evaluate based on non-financial achievements such as team development or innovation?
- Who are the conceptual thinkers in your organization? Do your responses encourage or frustrate them? Are you leveraging their ideas to build a better company?
- What do you do to elicit employee feedback on the people skills of their leaders?