Banking On Leadership Management
By Dr. Joni Johnston

Journalist Gail Sheehy once said, "The secret of a leader lies in the tests he has faced and the habits of action he develops to meet those tests." If true, few industries have given their managers as many opportunities to become leaders as banking ( leadership management ). Banking has gone from an industry that attracts stability-seekers to a revolving door. The combined effects of deregulation, consolidation, and the rapidly advancing technology will continue to redefine the essential skill requirements of bank managers. The bank that transforms its supervisors into interpersonal risk managers will find greater ease at navigating the rapidly changing banking landscape and avoiding the inherent legal and financial risks that go along with it.

Interpersonal Risk Strategy #1: Communicating Through Change

Whether it's implementing new technology or integrating operations during a merger, bank managers must know how to successfully lead their employees through periods of change. Transitions are a time of high employee stress, uncertainty and fear. This often leads to poor morale, interpersonal conflict, decreased productivity and negative bottom line consequences; in fact, 60 to 75% of all restructurings fail because companies neglect the people factor. Interpersonal risk managers ease their employees' discomfort during company transitions by:

1) Helping their employees manage stress. One of the most difficult challenges managers face is dealing constructively with stressed-out employees. Stress can easily disrupt work relationships because, when employees are uncertain or overloaded, their communication is driven by an attempt to reduce their discomfort and control the situation rather than responding to the cues, wishes or feelings of others. Interpersonal risk managers minimize the potential havoc this can cause by recognizing stress-induced employee communication patterns and engaging in appropriate crisis leadership management strategies, such as reviewing a workload to make sure it's manageable or checking to make sure deadlines are realistic. In order to do so, they must have the interpersonal skills to establish internal baselines of their employees' behavior, implement the unique management techniques required during transitions, and manage their own stress to prevent it from adversely impacting their supervision.

2) Communicating early and often. Managers who communicate clearly, consistently and credibly benefit from lower turnover; lower absenteeism; fewer grievances filed; and better coordination, both inside and outside the organization. During times of uncertainty, interpersonal risk managers articulate a clear vision of the company's future, including the benefits of change to the bottom line. By creating recognizable milestones for their employees to track, they replace fear with optimism. Interpersonal risk leaders also set benchmarks to measure acceptance of new initiatives, comprehension of key corporate messages and adequacy of their communication efforts. By spending time with their employees, they identify early signs of transition problems such as a significant rise in customer complaints or overt conflicts between employees and departments and take an active role in eliminating them. To accomplish these goals, interpersonal risk managers must have the skill to persuade, motivate, and build trust with their employees .

Interpersonal Risk Strategy #2: Reducing Unnecessary Employment Liability
Employment-related complaints rise in unstable environments. Interpersonal risk managers are leaders in reducing unnecessary legal risks. They know that their actions can be the deciding factor between a satisfactorily resolved internal offensive behavior complaint and a full-fledged lawsuit. As such, they play an active role in reducing unnecessary employment liability by:

1) Understanding their legal responsibilities. Interpersonal risk managers have a clear understanding of harassment/discrimination laws, understand their role in preventing and responding to offensive behavior, and have the skills to respond effectively to offensive behavior complaints. They are also aware of .the influence their position of authority has on the expectations and perceptions of employees and understand that an employee who sees his or her manager engaging in, ignoring, or retaliating against someone who has complained about offensive behavior is more likely to bypass a grievance procedure and seek outside relief. As such, they use their influence to promote effective humor, teambuilding, and ethical decision-making.

2) Taking appropriate action. Interpersonal risk managers address employee problems quickly, fairly and consistently. They skillfully apply the appropriate use of coaching, counseling and discipline to document their leadership management decisions and motivate their employees toward peak performance. They are aware of the legal and practical issues in performance appraisals and intersperse formal reviews with informal feedback.
Interpersonal Risk Management Strategy #3: Investing in Employees

A bank's competitive edge depends on outstanding customer service. To achieve it, bank managers must give increasing authority to the people who interface with their customers on a daily basis. Interpersonal risk managers understand the direct link between employee satisfaction and customer service and invest in their employees by:

1) Empowering their employees. Interpersonal risk managers give their employees the authority to make customer relations decisions on the spot. They communicate where they want their bank to go and the strategy to use to get there. Then they invest their employees with the freedom within the limits of their business strategy to act on behalf of the company.

2) Focusing on employee retention. Interpersonal risk managers know how to keep their employees. Understanding that 45 percent of all voluntary termination decisions are made during the first 90 days of employment, they put extra effort into their employee orientation to build organizational commitment. They meet with new employees during the first week and conduct new hire check-ins 30 to 60 days after they've been on board. They also conduct yearly job satisfaction surveys and get employee input into recognition and reward programs.

The Bottom Line

Most of us are about as eager to change as we were to be born, and go through it in a similar state of shock. Interpersonal risk management leaders help their banks survive transitions by communicating through change, reducing unnecessary employment liability, and investing in their employees. Interpersonal risk management is the skill set that will enable banking managers to transform risks into opportunities and to minimize the legal and financial risks inherent in a shifting workplace. Not only will it measurably increase employee satisfaction, it will raise productivity. Now that's money you can take to the bank.