The start-up world and its relationship with the banking and financial services sector are about ripe for a major shakeup.
The collapse of Silicon Valley Bank (SVB) and the unravelling of Swiss banking giant Credit Suisse — death by a thousand cuts if you will — earlier this month has shown not just the fragility of modern banking systems in times of fast-paced economic freefall but the fragility of leaders.
The ghosts of the 2008 Global Financial Crisis and the 2018 Banking Royal Commission still hover around the leaders of then and now. Lessons were not learned and leaders didn’t listen.
Here is my insight into how start-ups can get ahead of the funding crisis in play.
Australia managed to come out of the GFC relatively unscathed, and our Big 4 banks didn’t see a fatal blow like a US bank Lehrman Brothers come to pass — at the time that was a good thing and made us the envy of the world some 15 years ago. However, in 2023 our largest intuitions that underpin our stability and world-class AAA credit rating status (Australia remains one of just nine countries to hold a AAA credit rating from the three major rating agencies) have failed in that they have never been focused on those who matter most.
Their people.
Their mental health and wellbeing matter.
Their personal satisfaction in the jobs they do matters.
Their leaders’ moral compass matters.
At my consulting firm Maximus International we get to work with some of Australia’s best-known financial services heavyweights and also the challenger players. They are turning to us now for more than just strategic advice and leadership programs. There are nerves and anxiety in a post-pandemic workplace where purpose drives everything and we want to bring our whole selves to work, and this becomes part of any great business’s culture.
Old leadership styles that prioritise profits ahead of this are in freefall. The current war for talent means the best people want and demand the best workplaces that align clarity, values and purpose in their daily operations.
Australian leaders have had it easy for a long time. Noting tough decisions are part of the job of any CEO and executive team but the failure of new banks like SVB and old banks like Credit Suisse (noting UBS has come to take over its fate for now) boils down to the same problem: poor leadership.
Our new leadership assessment tool measures a set of key future-focused leadership traits, and we have demonstrated that ten of these are critical to the performance of leaders, teams and cultures.
Firstly, we found leaders who understand their personal purpose report greater levels of work and life satisfaction. They will bring more positivity to the culture. Purpose is important across all subcultures and is the glue that binds. Purpose is best unlocked with narrative and story. It’s both emotional and rational in its nature.
Secondly, what you ultimately want to create for all people is emotional commitment. Our research showed that feeling emotionally committed and being able to deliver on challenging goals was key to a thriving leadership culture. This is the starting point and a baseline needed for everything. You don’t get emotional commitment by scaling up in good times and redundancies in headwinds. This exercise is becoming faceless and impacts wellbeing individually and collectively.
Culture is built with collectives: add in ambition, courage, and customer obsession and you get better personal and team performance. These are the key elements to building team cultures. Having teams connected with the customer culture directly is critical. As is the ability to unlock courage through vulnerability, accessibility and openness.
Finally, by overlaying human-centered Leadership, the growth of others and cultivating culture, we build enterprise culture and wellness.
Little wonder Australia’s productivity growth has fallen to its lowest level in 60 years. The latest Productivity Commission five-year report showed productivity growth has averaged just 1.1% a year. Boosts in productivity growth are seen as the driver of long-term improvements in living standards, according to the Productivity Commission. The trend has seen Australia slip 10 places in productivity ratings, falling from sixth to 60th in the OECD from 1970 to 2020, now sitting at 22% lower than the United States, according to Treasurer Jim Chalmers.
I agree with Dr Chalmers that Australia needs to improve its poor productivity performance or risk extra work and less pay. We also need bold leaders to rise to these heady times and remember people and purpose will make or break your future.
Brent Duffy is the joint managing director and partner at Maximus International and has over 20 years of experience consulting and developing many of Australia’s top senior leaders and executives across organisations such as Johnson & Johnson, Suncorp, nbn Co, Urbis and Commonwealth Bank.
