Leadership: Theory and Practice
I am employed as a bank branch manager, and the leadership challenge that confronted me this year has arisen due to the worldwide financial crisis. As a bank manager, I am exposed to the most sensitive confidential information, through handling the accounts of our customers at the bank. On a day to day basis, I have become an eyewitness to the widespread distress occurring in many families. Families have been negatively impacted by the long-term unemployment of one or both breadwinners; for some, this has never happened before. My leadership challenge has consisted of treating these individuals professionally and fairly, and assisting my staff with the additional stress that comes with the job in such times.
Our bank customers have been impacted in three crucial areas of personal finance: the decline in home value and corresponding real estate equity lines of credit, the unemployment of one or both breadwinners, and decline of investment in financial vehicles such as mutual funds and other financial strategies. Our bank is the provider of mortgages, equity lines of credit, and investments in mutual funds and other financial strategies for many of our clients. The distress that has resulted from the sudden shrinkage of these important sources of income has been expressed to me constantly by bank customers during the past two years, but has worsened significantly in the past six months. At the beginning of the recession, I assumed, and bank customers assumed that the worst distress would pass within six to nine months, as it had in other financial slumps in the U.S. Now that the situation has extended into a second year, with an anticipated third year ahead, many families that were able to withstand the financial strain are now being forced to lower their standard of living in order to adjust.
While lowering the standard of living sounds like an abstract term to some, for our customers it has sometimes meant selling a home at a loss, or even losing it to foreclosure. It has meant that families have been forced to move in together, and delay entering college for students graduating from high school. It has also meant that a higher percentage of bank customers are repeatedly overdrawn on their checking accounts, as they experience a severe decline in income due to unemployment, while remaining locked in to high fixed expenses such as automobile loans and home mortgage payments. Those expenses are not easy to reduce, and making changes usually results in damage to a customer's credit score.
I have been called upon to listen to customer's dissatisfaction with the mortgage that they had formerly obtained through our bank, the reduction or withdrawal of our bank's home equity credit lines that had formerly served as an extra "buffer" for household expenses, and the decline in the value of the investments that customers had engaged in, upon our recommendation. Most of the time, our customers understand that the current economic distress has spread, not just through the U.S., but throughout the western world. Countries such as Iceland, Portugal, England, and Spain are undergoing the same declining real estate values, and related financial declines. This is something that no one could have anticipated, yet as the manager of our bank branch, I am the public face of the bank, and must assume a patient, competent, and confident approach at all times with customers. At the same time, my staff at the bank is also exposed to the gloom and distress expressed by customers due to the current situation. At times, customers have become rude or belligerent to my staff, and at those times, it becomes my duty to intervene.
Although I have always enjoyed my work as the manager of a bank branch, this past year has become increasingly challenging.
The ideas of Warren Bennis on leadership have been an inspiration to me during this past term, since I have been called upon to apply the concepts that he teaches on a day to day basis; to become a leader in my work at the bank, and not merely a manager. In distinguishing good leaders from managers, Bennis emphasizes the importance of personal character. In contrast to a manager, a leader exceeds ordinary expectations, in order to give customers better service than was originally expected. If I just wanted to function as a bank manager, I would follow the banking regulations to the letter, and otherwise allow customers to fend for themselves.
Instead, I will attempt to extend customers as much flexibility in banking matters as possible. Many people are not aware that bank managers often have a choice in how they may handle a request from a customer. Much of the time, it is possible to extend extra time for a banking matter to be resolved in a customer's favor. This is possible in many cases, and where it is prudent in terms of banking rules, I do attempt to do this. Bennis states that managers focus on systems and structure, while leaders focus on people. My own interpretation of this, and my own concept of leadership is that effective organizational leadership is the ability to effectively lead your organization to its objectives. Wherever possible, I attempt to give my banking staff the guidance needed to remain professional through these difficult times, while also granting bank customers extra courtesy and understanding. Bennis states that while the leaders sweat the details, they also focus on making people feel valued (Murray, 1997). This past year at the bank has required that I use these leadership concepts to help myself, my staff, and our all-important customers to navigate through these perilous times.
Murray, J. (1997) Thoughts on Leadership, from Warren Bennis. Web.