THE SPORTS WORLD IS FULL OF coaching legends who have gained fame by channeling unique leadership styles or embracing unorthodox tactics. Leaders in financial services looking to develop their own coaching style — or refresh an existing one — might want to look to the sidelines for coaching philosophies that could translate to the executive suite.
ARE YOU A "SYSTEM" COACH?
Sports history is full of coaches whose success is synonymous with a new or dominant system of play. Financial-services executives looking to develop a system to manage a segment of their business can model their coaching style after legendary basketball coach Phil Jackson. Jackson and his Triangle Offense netted 11 NBA championships during his years with the Chicago Bulls and Los Angeles Lakers.
The goal of the Triangle Offense is to fill the five spots on the basketball court, which creates good spacing between players and allows each one to pass to four teammates. Simply put, the sum is greater than its parts.
Successful coaches can propel their teams to success by making the system more important than its individual parts. Leaders in financial services must constantly work to optimize every aspect of their business. Often this means installing very detailed protocols for employee onboarding and continuing education. When properly harnessed, the combined efforts of front-, middle- and back-office personnel can power a firm to success.
ARE YOU A TALENT MANAGER?
Executives who pride themselves on being able to “coach up” their employees should consider the talent-manage-ment approach of football coach Bill Belichick.
Belichick has led the New England Patriots to four Super Bowl victories, but his formula for success isn’t some revolutionary system with a catchy name. Belich-ick’s players learn to embrace one seemingly simple mantra: Do Your Job. Players know that if they focus on doing their individual job to the best of their ability — and rely on their teammates to do the same — then collective success will follow.
Belichick’s philosophy is also unique because Do Your Job is applicable to every aspect of the game: offense, defense and special teams. Such a distinction is important because leaders in the world of finance know full well that even if one business line does well, the entire firm may still crumble because of the poor performance of other departments.
THE MAGIC OF WHEN A SYSTEM AND TALENT MANAGMENT MERGE
Every once in a while, a coach comes along and combines a dominant playing style with superb talent management. And when it happens, the results can be magisterial.
Pep Guardiola’s tenure as coach of FC Barcelona transformed the way soccer was played around the world. Guardiola took the revolutionary tika-taka style of play espoused by his mentor and fellow legend Johan Cruyff and built a team that executed it to perfection. Tika-taka is a possession-based style of play that focuses on quick, short passes. The object is to keep the ball until the time is right to penetrate the opponent’s defense and score. In the meantime, the opponent can’t score if they don’t have the ball.
While the tiki-taka system proved devastating for opponents, just as lethal were the players Guardiola selected for his teams. Players such as Xavi Hernandez and Andres Iniesta were diminutive and not particularly fast. The pair showed no mercy toward rival clubs that previously scoffed at the idea of playing such pint-size players in the midfield. When Guardiola had a hole in his roster to fill, he often eschewed paying big money for free-agent players and instead promoted players from his reserve team. Players such as Sergio Busquets and Pedro Rodriguez were virtually unknown — until they shined atop the soccer world for FC Barcelona.
Guardiola’s wisdom in matching unorthodox players with a system that suited them perfectly proved so successful that when his players represented the national team of Spain, a team Guardiola didn’t even coach, they captured back-to-back European Championships and a World Cup.
Replicating Guardiola’s success can be difficult in the financial-services world, particularly because markets change faster than the rules of soccer. Talent management can be tricky at a financial-services firm because some-times an employee’s strongest skills aren’t always obvious — to the employee or co-workers. But if an executive has an eye for spotting talent, he or she can work to provide all the resources necessary to develop that employee and enhance his or her role in the business. If that same executive identifies the strengths and weaknesses of the collective team, he or she can put in place a business plan that maximizes the potential of everyone at the firm, not just the superstars.
Regardless of which coaching style an executive chooses to embrace, there are other best practices from the sports world that should be remembered when leading a team of financial professionals.
ARE YOU IN A PRESEASON, REGULAR SEASON, POST SEASON, OR OFF - SEASON?
Employees in virtually every corner of financial services experience some kind of ebb and flow in their workload throughout the fiscal or calendar year. Executives need to identify those “seasons” and manage them appropriately.
One financial advisor whose practice specializes in working with clients who are educators describes August as a “monthlong Super Bowl.” His clients have taken most of the summer off to relax and now want to cram the handling of their financial affairs into the last few weeks before school starts. That financial advisor knows that every aspect of his office needs to be firing on all cylinders in August, so initiatives such as technology upgrades and staff onboarding are completed months in advance.
BEWARE THE TEAM OF ALL- STARS
Every coach and every business executive wants to work with top talent because star players can propel teams and firms to success. However, the business and sports worlds are littered with examples of when a team of superstars failed to live up to the hype. Most championship teams excel because they have a few stars and a supporting cast of individuals willing to tackle the not-so-glamorous tasks that sometimes make the difference between success and failure.
In the financial world, the individual advisor, agent or salesperson often gets the glory. However, back-office personnel are just as critical on the road to performance. Plus, the changing landscape in finance has elevated positions such as compliance and cybersecurity to new levels of importance.
REST YOUR STARTERS
Football coaches like to play their starting quarterback for as many plays as it takes to win the game —and not one play more. They would never risk their star getting hurt when the team is already ahead 45-0 with two minutes to play. Financial-services executives would do well to embrace this approach to talent management.
Recent headlines have shined a negative spotlight on the long hours some in the financial-services industry are called upon to work. Some firms have responded by closing their offices on certain days or making vacation mandatory. Financial-services leaders should know that such measures not only steer employees toward a better work-life balance, but also stand to improve the firm’s bottom line.
According to John Coates, senior research fellow in neuroscience and finance at the University of Cambridge, studies suggests every employee — even one on a hot streak — needs well-timed breaks from work.
“Every blowup we’ve seen north of $1 billion that shakes a bank to its foundation is handed to us by traders at the end of a two- or three-year winning streak. Traders who thought they could walk on water, and risk management thought they could as well. Something happens to traders when they are on a winning streak; it transforms them from something tame to something a lot more dangerous,” explains Coates, who is also the author of The Hour Between Dog and Wolf: Risk Taking, Gut Feelings, and the Biology of Boom and Bust.
“The financial community has to be aware that we have unstable risk preferences. Underneath our cool demeanor, our risk preferences are swinging back and forth. Once you understand the biology, you can do things like take a trader who is on a winning streak and instead of raising their risk limits, maybe tell them to close out their positions and take a three-week break to give the brain a break until the biology resets.”
Ultimately, every executive has to select a leadership style that fits his or her personality and skill set. Whether the focus falls on a system, talent management — or a magical blend of both — success will follow the leader who is not afraid to try new things and evolve with the game.