British Army chief-turned-banking consultant Sir Peter Wall outlines to 1LoD the surprising message he gives the banks he advises – equip and empower your staff to fight their own battles.
Commissioned into the Royal Engineers in 1974, Sir Peter Wall rose to the rank of full general and in 2010 became chief of the general staff – the professional head of the British Army. Since retiring from the army, he co-founded and is chief executive of Amicus, a consultancy that draws upon the lessons of military experience to better foster leadership in corporations.
At first glance, there might not seem much in common to be found between the army and banking. Peter Wall says he himself had not expected to find much overlap – but upon going into a major global bank to provide advice, he saw at once how skills he had learnt in the army would be helpful.
“A whole lot of things we took for granted in the army would have helped this organisation immeasurably. I was rather surprised by this. But I have since learnt that these are quite easy to identify and quite difficult to apply,” he says.
Comparing codes of conduct
Both banking and the army face increasing uncertainty and volatility due to the pace of technological and societal change, globalisation, encroaching regulation and compliance requirements, he says. The army cannot stand still in the face of these changes and neither can the banking world.
It is a myth to assume that the army does not face regulatory and political pressure – it most certainly does. And soldiers under fire have the choice to confront the enemy or lie low. It is whether the army has inculcated a successful code of conduct that determines what they choose to do.
Of course, there are also differences. The army filters its recruits much more stringently than a bank does, and generally from a younger age, and they quickly learn the military culture and its processes. It also has a far greater range of sanctions at its disposal and monetary gain is not an incentive for wrongdoing as it is in a bank.
Nonetheless, the core issue of successful leadership and a winning esprit de corps remains the same. “We’re trying to get people to lead and not just manage, or hide behind the Senior Managers’ Regime or regulation as an excuse not to do the job properly. The objective is to build a strong leadership team that can be respected, and to cultivate a culture that makes teams within the group conform without being stereotypical,” Wall says.
One of Wall’s key messages, however, flies in the face of the zeitgeist in banking. He believes that subordinates should be encouraged to act independently and be empowered to take important decisions, albeit in accordance with an agreed and clear broad philosophy.
This is not how things run at all these days. Junior and middle tier bankers are given less and less chance todo their own thing, and are heavily scrutinized at all times. The idea of giving them more latitude rather than less came as a surprise to bankers advised by Wall and one that made them nervous.
The army’s culture is based in large measure upon the principle that the organisation is at its best when performance is raised across the board rather than by relying
on a handful of star performers.
It’s a collective effort, and unless employees feel they contribute to the whole and are valued individually, they are likely to become disconnected from the organisation and its goals.
“Individuals have to feel they have a path for themselves, so that it is worthwhile to be committed to the firm. If you have a high turnover, you will never foster a positive culture, and you will tend towards mediocrity and not excellence. That’s a failure of leadership and it’s as true in a bank as it is in the army,” he asserts.
Employees stay in line
Yet the regulatory climate post- crisis, and the response of banks to that climate, makes a framework of employee autonomy and trust highly unlikely. Wall admits it is a problem and says that the tidal wave of regulation that has descended upon the financial services industry in the last few years stifles creativity and is in danger of producing automatons.
There is now a new rule for virtually every situation and all this means is that if a new problem comes up that doesn’t yet have an appointed rule, employees will sit tight and wait for further direction rather than think about how to deal with it themselves. They also know that the penalties for stepping beyond the prescribed corporate rubric can be punitive.
This means that senior managers have to expend time and energy assuming responsibility for those further and further down the food chain, rather than setting strategy for the firm. As Wall notes: “It’s debilitating for everybody.”
These are issues that should give banks pause for thought. The regulatory heat is still on, but Wall believes banks would be advised to consider principles and philosophies tried and tested in these most exacting of circumstances if they wish to build a corporate culture that will not merely endure but thrive.