A resilient network is crucial

HAGER: Managers have three important tasks in the transformation process. Firstly, they must be drivers of a culture of change. They should create an environment in which innovation and continuous improvement are not only accepted, but also encouraged. Teams should be encouraged to learn and adapt new technologies and ways of working. Secondly, managers must ensure that their teams are empowered for transformation, i.e. that they have the necessary skills.

This can be done, for example, through targeted training, mentoring programmes, but also by hiring (external) employees with expertise in the transformation environment. Collaborations with technology providers and other organisations can help to accelerate the digital transformation and bring new perspectives and solutions into the organisation. Thirdly, managers need to prioritise technology investments, for example in cloud computing, artificial intelligence or big data processing. In addition, managers should always keep an eye on the extent to which these three tasks have been fulfilled. This requires mechanisms for measuring and monitoring the progress of the digital transformation. Regular reports and dashboards can help to maintain an overview and ensure that the transformation is on the right track.

The successful implementation of digital transformation in finance is considered essential for the continued existence of companies. What specific skills, qualifications and personal attitudes do you consider essential for managers to be able to work effectively in this area?

HAGER: On the one hand, managers need a high level of methodological and technical expertise. This includes a deep understanding of the underlying technologies. They need to be familiar with concepts such as artificial intelligence, machine learning, blockchain, big data and analytics and be able to utilise these technologies effectively and integrate them into their existing processes. They must also be able to analyse and interpret data and derive the correct decision from it. At the same time, digital transformation requires a high degree of strategic thinking. Managers need to understand the current digital landscape, identify opportunities and risks and develop and implement a clear strategy for the digital transformation of their organisation.

Secondly, managers need a range of personal skills. They must be able to create an inspiring and motivating working environment so that employees enjoy the transformation process. The digital landscape is constantly changing. Therefore, a high willingness to learn and adaptability is also crucial. Managers must be willing to constantly learn new skills and keep their knowledge up to date.

What particular challenges and opportunities arise when filling management positions in the financial sector, especially with regard to promoting digitalisation and optimisation?

HAGER: There are various opportunities when filling management positions. External appointments in particular offer the company the opportunity to bring a breath of fresh air into the organisation. With internal appointments, this is often made more difficult by many years of socialisation with outdated ways of thinking and structures. There are also positive effects from a business perspective, such as the improvement of existing processes, cost reductions or the development of new business models. Companies that utilise these opportunities can set themselves apart from the competition and gain a competitive advantage.

The challenge with all the existing opportunities is to ‘take the workforce along’ in the transformation process, i.e. to actively involve employees and make them aware of the benefits for themselves and the company. There are often fears of change that managers need to allay. The leadership style and personality of the manager are decisive here: does the person succeed in gaining acceptance or even support for the change within the workforce, or does resistance arise that is harmful to the company and difficult to break down?

If we look at internal strategic measures for talent acquisition and development in financial companies, the question arises as to what concrete steps can be taken to identify qualified managers who can effectively lead the digitalisation process?

HAGER: An effective way to assess the professional and personal skills of a potential manager is to conduct structured interviews or assessment centres that focus precisely on the required competencies. Once talents have been identified in the company, it is important to support and promote them individually in the development process. This can be achieved, for example, through regular performance reviews, 360-degree feedback or career development plans. These development plans can focus on digitalisation. In addition to technical training, further training should also cover personal skills. This ensures that managers are not only technically capable of transformation, but can also effectively support employees in the process.

Finally, an external talent search should be considered. Although the development of internal talent is important, there are also benefits to be gained from involving managers. These already have experience in leading digitalisation processes in other financial companies or industries. This can be achieved by working with specialised recruitment consultancies that have access to a broad pool of qualified candidates.

How do financial organisations find suitable external candidates for the necessary transformation in the current market environment?

HAGER: The shortage of skilled labour means that good and very good candidates can choose their employer. The value of a strong employer brand should therefore not be underestimated. Companies need a clear and compelling message about their values, their culture and the benefits they offer their employees. In the current environment, it is more important than ever to focus on the ‘cultural fit’ of a candidate. If there is a cultural fit between the company and the candidate, this increases both motivation and satisfaction – and therefore the likelihood of long-term success.

This fit can be identified, for example, by asking more situational questions during the application process.

In order to find suitable candidates in the first place, a reliable network is crucial. As a recruitment consultancy, we not only approach candidates directly via our network, but also rely on recommendations. Successful placements usually result from direct approaches. Many suitable specialists are not active on platforms such as Xing and LinkedIn. Others, on the other hand, respond less frequently there due to the frequent contact.

How does the partnership with a recruitment agency that supports financial companies in the recruitment and placement of managers differ from the in-house HR department with its own job advertisements?

HAGER: The most important advantages of a specialised personnel consultancy such as HAGER over an internal HR department are the network and experience with comparable companies. Recruitment consultancies build up contacts over the long term. This means that they gain a better insight into the personal and professional situation of the candidates and can therefore find the ideal time to approach them. They also have access to candidates who are not active on social platforms such as Xing or LinkedIn. Another important point is the function of the recruitment consultancy as an intermediary between the company and the candidate. It is important for the consultancy to help both the company and the candidate. The status as a third party helps to create a special relationship of trust. Candidates react more openly and impartially to us as a neutral, discreet partner.

About Hennig Sander

Henning Sander has headed the Banking business unit at HAGER Executive Consulting for over ten years. He fills management positions at banks and insurance companies as well as FinTechs and InsurTechs. The trained systemic coach and psychologist pays particular attention to the compatibility of personalities with the culture of the companies he advises.

This article contains content and quotes from the article ‘A resilient network is crucial’, first and originally published on Finanzwelt on 17 October 2023. The full article can be viewed here.