John Cryan, the relatively new co-CEO of Deutsche Bank, recently shocked the banking industry with the suggestion that all those billions spent on bonuses for executives were essentially a waste of money, and that he would not be likely to work harder for a few extra squillions in readies.
It was regarded as a taboo-challenging thesis in the banking business, which has traditionally regarded financial recompense as the be-all and end-all of the profession. Mr Cryan’s comments kicked up a storm among the masters of the universe who saw the awful prospect of the seasonal bonus package being snatched from their wallets, leaving only photos of the children and the St Tropez-moored yacht.
If his comments are translated into policy – I have my doubts – it will mark a new austerity for the bankers and a few sniggers for the rest of us.
But now comes evidence from the regional banking industry that a new spartanism is exactly what it needs.
Pemberton Partners, a “human capital consultancy” with offices in London and Dubai, has found that an alarmingly high number of non-national workers in the GCC are unhappy with their employers and have changed, or want to change, their jobs.
“Over 60 per cent of expatriate employees look for a new job within 18 months. High staff turnover is a problem because hiring and integrating new people takes time and money. It also stunts the development of a strong corporate culture,” according to Gavin Maude, the Pemberton chief executive.
The findings are based on a survey conducted in Abu Dhabi and Dubai last month.
But what is fascinating about the survey – and echoes the calls of Mr Cryan– is the proposed “core solution”.
“Poor leadership is by far the most important reason for high staff turnover,” the survey found, recommending that a dash of military culture would help to solve the problem.
The survey leaned heavily on the British Army’s recently published “seven principles of leadership”, and sought advice from an anonymous “former army officer with extensive special forces experience”.
The army’s rules are: lead by example; encourage thinking; apply reward and discipline; demand high performance; encourage confidence in the team; recognise individual strengths and weaknesses; and strive for team goals.
Mr Maude says that “Leadership is an art, whereas management is a science and when effectively integrated you get something very effective and special. Competitive pressures mean that the GCC’s banks and financial services companies can no longer ignore the problems caused by poor leadership”.
One of the army’s principles stands out in the context of Mr Cryan’s anti-bonus tirade: apply reward and discipline.
The banking business has never been short of the former, at least at the highest level, but internal discipline has been lacking. Recent fines by external regulators, running into the tens of billions of dollars for transgressions from price-fixing to sanctions-busting, seems to prove that external supervision and discipline is the only thing the erring bankers understand.
If applied all round, it makes for a very different banking industry in the future: the senior ranks, stripped of bonuses, working for basic pay, but supplying leadership for the troops lower down; the grunts, presumably, happy to stay in their units for the duration of their service.
But I somehow doubt the new-look military banking industry will come to pass. Which general said: “No battle plan ever survives contact with the enemy”?
fkane@thenational.ae
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