Deloitte Addresses Increasingly Complex Financial Services Landscape with Seven Leadership Principles

Seven Principles Focus on Growing Web of Connections that is Challenging Leaders and Their Organizations

News provided by

Apr 06, 2010, 09:59 ET

NEW YORK, April 6 /PRNewswire/ -- Chronic complexity -- brought about by a rapidly changing marketplace, a tightening regulatory environment, evolving consumer demands and profound demographic shifts -- is reshaping the financial services industry and introducing additional demands on leadership at all levels. Deloitte's "Coping with Complexity: Leadership in Financial Services," released today, highlights seven leadership principles leaders should consider in their efforts to address the intricacies inherent in financial services today.

"Events of the last 24 months have clearly laid out how interconnected -- and complex -- financial services has become. From banks receiving government capital infusions, to insurers with overexposure to financial contracts, hedge funds collapsing, and commercial real estate debt becoming distressed -- it's been a series of dominos," said Steve Hatfield, principal, Deloitte Consulting LLP and human capital national financial services industry leader. "This is a new world order and we believe leaders will have to take a new approach to remain successful because the complexity in the market is here to stay. New principles of leadership must now be exercised at all levels of an organization, not just at the top."

Deloitte's seven leadership principles, which offer financial services companies a blueprint to consider in their efforts to address the complexities facing their leaders, organizations and the overall industry, include:

Principle 1: Articulate a vision and secure enrollment. Crafting a meaningful vision that achieves buy-in from employees and external stakeholders can be an important first step in effective leadership.
Principle 2: Build trust with clear communications. Leaders must expect that breakdowns are increasingly likely to occur in a complex environment. Resolving tension and fostering cohesiveness hinges on a clear communication style that builds trust.
Principle 3: Cultivate authentic leadership and value creation. Leaders can adapt to complexity by remaining open to experimentation, committing to learning, and demonstrating behaviors that are consistent with espoused values, which are constantly being challenged.
Principle 4: Address the "swampiness" inherent in business issues. Swampiness -- complex problems composed of multiple systems that resist technical analysis -- can be combated by developing the ability to adapt to unfamiliar scenarios and resist the temptation to trivialize complex issues.
Principle 5: Uncover and work with paradox and tension. Solutions to messy problems can arise when leaders ask difficult questions to uncover latent assumptions and spot contradictions or biases through innovative framing.
Principle 6: Tune into the "shadow system." The shadow system encompasses the myriad relationships that exist outside the formal hierarchy found in organizational charts and can help leaders uncover hidden information inherent in a complex environment.
Principle 7: Recognize, prioritize and mobilize for potential crises. Traditional scenario and contingency planning aren't enough to avoid crises. Using "RPM," a disciplined, three-step process of recognition, prioritization, and mobilization, can help organizations plan for predictable surprises.

In addition to the leadership principles, the report discusses the underlying culture of organizations -- built on values, competencies and motivations, or "VCMs" -- and its effect on successful execution of the seven principles and an organization's capacity to adapt to complexity.

A copy of the report is available on Deloitte's Web site at www.deloitte.com/us/FSILeadershipPrinciples.

About Deloitte

As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

    
    
    Contact: Elizabeth Fogerty          Liz Cheek
             Public Relations           Hill & Knowlton
             Deloitte Services LP       +1 212 885 0682
             +1 212 436 7179            [email protected]
             [email protected]

SOURCE Deloitte