Magazine article The RMA Journal

Leadership = Culture

Magazine article The RMA Journal

Leadership = Culture

Article excerpt

It is very easy to confuse a business leadership style with leadership substance. That is, when managers discuss leadership, they tend to think in terms of style types: heroic, analytical, intellectual, stubborn, laissez-faire, partnering, coercive, courageous, plodding, inspirational, charismatic, sneaky, caring, thoughtful, manipulative, and many other descriptions that come to mind. But while we admire those who have left an indelible impression on us and our society--great political leaders such as Washington, Lincoln, Roosevelt (pick one), Kennedy, Truman, Eisenhower, and Reagan, or business leaders such as Walter Wriston, "Engine Charlie Wilson," Jack Welch, and A.P. Giannini--we do so because of the distinctive style they exhibited in leading from the "top down."

Style in itself is not leadership. Leadership is the act of creating a culture, ethos, and the values that permeate a business and energize everyone to achieve the right results with the best possible ethics. The business of a leader is to turn weakness into strength, obstacles into stepping-stones, and disaster into triumph. These are the substantive results. Many leadership styles can produce such results. Leaders use style to get their business colleagues to think right and act right. What an organization thinks and does makes it what it is and is the end result of good leadership.


How do you create the right culture? A bank's culture is built in tiny pieces, such as doing and saying the right things day after day until everyone knows in their bones good from bad, proper from improper, right from wrong, ethical from unethical, and caring versus uncaring in terms of customer service and employee relations. As one highly successful CEO said, "You get what you expect and inspect. When you ask repeatedly about something, pretty soon everyone understands that they better not talk to you unless they have the answer to your question. And just about the time you are tired of asking the question, they are just getting the message."

Creating a lasting and proper culture is no easy task. A few extraordinary leaders can produce a revolutionary change; most ordinary leaders take years to shape the proper attitudes and environment. There is no easy how-to formula. There are, however, dimensions of achievement that are hallmarks of each culture--good or bad. Leaders who are coercive and deceptive create a management culture in which coercion and deception are perceived as the winning style. Leaders who have a partnering and sharing approach and who are steadfast in their conviction of where they want the bank to go can usually persuade managers to follow. But if there is no hard-and-fast list of how to do it, there are hallmarks of "good culture" that can be recognized in banks. Let's look at nine hallmarks of good leadership.


We all know that an essential component of culture is managers who anticipate and mitigate risk. This means more than paving attention to the easily recognizable risks of credit, reputation, operating, rate, and earnings. It means embedding in the people closest to the customer the responsibility for thinking about the unanticipated consequences of their decisions and actions. This cultural hallmark is the first line of defense against risk, because it's the unanticipated consequences that are frequently the source of major problems for a bank.

The "I didn't think of that" or "I never thought that would happen" excuse should not be tolerated. Rather, all personnel should be thinking about risk, although not always in the sense of always preventing risk or taking no risk at all. As we know, banking is a business of managing risk. For example, adopting fees and charges just because everyone else in the industry is doing it doesn't serve as an excuse when a class action suit comes along over a practice that you have had in place so long that no one remembers its origins. …

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