Rising from the Ashes: Finding the Best Leaders for the Next Phase in Banking - New White Paper from Heidrick & Struggles' Global Financial Practice Leader John Kim

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Jan 06, 2010, 02:39 ET

NEW YORK, Jan. 6 /PRNewswire-FirstCall/ -- "The financial crisis wiped out entire levels of executive leadership at banks, and 2010 will see a restructuring of the talent pool to drive organizations into recovery mode," says S. John Kim, global head of the financial services practice at search and leadership advisory firm Heidrick & Struggles. Mr. Kim is the author of a new white paper, "Rising from the Ashes: Finding the Best Leaders for the Next Phase in Banking."

Shift away from "supermarket" strategies

"This year will be a totally different game in the talent market. To many banks, it is clear that only a very few big financial supermarkets will remain. For most other players, even as Wall Street results improve, the days of trying to be all things to all people are over. Instead, many will thrive by tightly focusing on what they do best or on a core market. And different skill sets are needed as financial services institutions re-focus on core strengths, whether it's investment banking or commercial banking or liquidity management and pricing risk."

Who will lead banks into recovery?

Prior to the economic meltdown, says Mr. Kim, the top leaders of financial institutions often fell into one of two types. "The first was the charismatic personality who motivated, inspired, or in some cases dictated through the force of his or her own presence, and the second type was a hands-on, detail-oriented operator who drove performance through results and significant attention to detail.

"The renewed focus at banks now requires leaders who are a combination of both types. But just as important is a chief who can expertly understand the macro elements that can affect their firm, from regulatory and government changes to shifts in public opinion on hot-button issues such as compensation or credit availability.

"Banks will find it more difficult to make money in 2010. Whereas the markets were flush with liquidity by the government and spreads were wide due to the dislocation in 2009, we will see more challenging times in 2010 as the markets continue to move toward normalcy. A strong manager with vision and a risk control focus will be in demand."

Who won't be re-hired? Who will be?

"A lot of low-hanging fruit has already been picked off by the crisis," says Mr. Kim. "Some people's former skill sets just aren't needed anymore. There are many bankers who played in higher risk areas who cannot come back, as what they did doesn't exist anymore, or exists in a very differentiated form.

"But people who can evolve from a jack-of-all-trades role to flex a more specialized, sophisticated skill set are in hot demand. And we are also seeing a lot of crossover in the talent pool - people from big banks are moving to boutiques, those on the sell side are going to the buy side and vice versa, and global bankers are moving to the regionals."

Reputation repair

"There has been a lot of perception damage in financial services, which is affecting how current and recent MBA students view the sector. Regulatory and comp issues are dominating the debate, and the industry is struggling to repair its image for new hires.

"Wall Street will still continue to attract the talent - in order to make money, you've got to touch the money - but investment banks need to recognize that the talent pool it wants does not view the sector as the #1 destination anymore."

Only the bold will survive

"To survive this market turmoil and continue to build upon the momentum of 4Q '09, what is needed now more than ever is courage. Any organization that hasn't self-corrected and changed their business to reflect what's going on right now is in deep trouble. And there still may be some boutiques and hedge funds that will close in 2010 because of this.

"In a market where so many people are scared to make decisions, firms with bold leadership are becoming employers of choice. Talent will instinctively follow bold leaders, and it is those companies who are emerging first as the next decade's key players."

If you would like to speak with S. John Kim, Global Practice Managing Partner of the Financial Services Practice at Heidrick & Struggles, or for a copy of his white paper, please contact Davia Temin or Suzanne Oaks of Temin and Company at 212-588-8788 or [email protected].

About Heidrick & Struggles

Founded in 1953, Heidrick & Struggles International, Inc. (Nasdaq: HSII) is the world's premier provider of senior-level executive search and leadership consulting services. With more than 60 offices in the principal cities of 33 countries, it helps its clients address strategic issues that have human capital solutions in times of growth, turnaround, acquisition, integration, expansion into new markets, and economic flux. For more information about Heidrick & Struggles, please visit www.heidrick.com.

SOURCE Heidrick & Struggles