The Mind-Set and Blind Spots of Financial Market Executives

By July 5, 2018Learnings

My thinking about the financial services industry has been provoked. I attended a panel discussion on Bank Culture Reform and Behavioural Science hosted by Thomson Reuters and I read The Value of Humanising Organisations. These coupled with the upcoming 10th anniversary of the failure of Lehman Brothers caused me to consider if much has changed since I wrote an article My win, your loss or the Zero Sum Game: The Mind-Set of Financial Markets Executives in 2009.

You can’t walk into the foyers and lifts of the major banks and financial services companies today without being surrounded by their Values captured on posters and video screens or photos and stories of their employees and the awards they have won or the communities they are supporting.

What is your experience? Are the changes reflective of a tectonic shift in the industry or clever PR to get the public off the backs of the “evil bankers”?

I’d appreciate your perspectives. The following is an edited extract from the article I had written almost a decade ago.

Here are some generalizations about the worldview, values and blind spots of a financial market executive. Like any generalizations, it is up to you, at best, to hold them as useful lies or working hypotheses that need to be verified or adjusted accordingly for the person in front of you. 

This executive is motivated strongly by money; making it, being evaluated for how much he or she has made, and assessing his or her self-worth by total remuneration. In principle, maximising the interests of the shareholder, the ultimate owner of capital, is paramount. Although clearly in an industry where remuneration is valued more highly than title, job satisfaction or collaboration, maximising one’s own return may result in a focus on short- term performance, at the expense of longer term returns to the shareholder and with little or no regard for the consequences on the wider or global community. 

Price is seen to be the most efficient allocator of resources. Estimating what is already reflected in the price and what has yet to be taken into account by the market or what may be incorrectly taken into account is the name of the game. So, this executive invests a lot of time, energy and self-worth in formulating or “having a view” and being right. 

S/he must also stand firm in the face of the dissenting views of colleagues and the market. If the latter, s/he must ascertain whether there is an error in her/his view or valuation or whether the market is simply operating, for example, on a different time horizon. This need to stand firm can result in hubris and a tendency to no longer listen. 

The market is seen to be impersonal and ruthless. The norm of exploiting other’s lack of knowledge results in seeing your competitors and, in some cases, your client as fair game. It is exhilarating to beat the market index. Hence minimising risk, making continuous assumptions and comparing alternatives becomes a way of life. Compassion is assessed to be misguided, because you have to look out for yourself and emotion seems to get in the way of clear thinking. 

Any asset can be analysed or dissected into cash flow streams and linkages are ignored. Hence my win is your loss; it is a zero sum game. 

You may find that financial executives behave as if isolated. They “know it all” and are defensive of their decisions and thought processes. They are distrustful of their reports and avoid any semblance of “weakness and vulnerability.” They are sceptical and must have alternative views proved. Hence, they are unlikely to engage in new perspectives or behaviours without the theory behind it. They are constantly making comparisons which can fuel dissatisfaction. Perversely, they are insecure and yet feel superior to the general community. They also are under constant pressure and subject to constant evaluation of their performance. 

Notwithstanding these negatives, this industry is exhilarating, full of buzz. It provides tremendous opportunities and is immensely interesting and fast paced.  The financial services industry provides a more than comfortable material standard of living and financial security, as executives become more senior and accumulate wealth. Financial executives share the attributes of modernity with their own particular emphasis on the individual, rational and reductionist thinking. 

The greatest shifts from my blind spots, as a former financial services executive, have been a reconnection with emotions and what I care about – a wider lens that allowed me to see my interconnections with the global community, and a realisation that a narrow focus on profit maximisation is counter- productive in the long run. Through my involvement with the Women’s Leadership Forum (WOLF) Innovation teams led by Julie Gilbert at Best Buy and the emphasis on “care” in Bob Dunham’s CEO™ programme, I have come to see that profits are not the goal, but the consequence, of successful companies. This is a tremendous shift in perspective for me. 

To give of their best, humans – even those who have been inculcated by monetary valuations – need a voice, an opportunity to perform well and a sense of recognition. A leader who honours this in his or her employees will generate greater and more sustainable profitability. Sustainable profits are the consequence of engaged, enlivened employees who will “walk over hot coals” for their leaders and companies, whereas a narrow focus on cost cutting dehumanises employees and cannot sustain superior performance. 

As George Merck II said,

“We try never to forget that medicine is for the people. It is not for the profits.The profits follow, and if we have remembered that, they have never failed to appear” (Collins, 2009, p. 53). 

If you would like to discuss how your firm can invest in a coaching partnership or you would like to improve how you engage with your stakeholders contact me on +44 (0) 7952 068133 or sylvana@sylvanacaloni.com

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Join the discussion 2 Comments

  • In 2018, finance was the industrial sector most likely to experience workplace stress (Perkbox) so foyers freshly decorated with values, awards, and communities helped, probably don’t reflect a change in the mindset of financial market executives since your insightful article a decade ago. Rationally reducing all problems to the ROI obviously hasn’t produced an abundance of happiness in finance – not that the sector is alone – low employee engagement, productivity, and high stress have plagued British industry for years.

    Interestingly, there is an increasing demand for financial CPD seminars involving soft skills and emotional intelligence. Perhaps financial market executives, rather than just ROI, are also seeking meaning in their lives? Will we get the values off the walls and into the meetings?

    • sylvanacaloni says:

      Thanks for your observations and comments Christopher. Interesting point you make about the CPD seminars. I’m also noticing an increase in sessions on culture & conduct in financial services such as the one I’m attending hosted by Kemp Little or UK Finance. As you say it would be great if we can get “values off the walls and into the meetings.”

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