When one of the world’s major financial services firms faced a time of serious crisis, including the pending transition of the CEO and founder, the company’s slate of emerging senior leaders engaged Dialogos to help them examine the demands and challenges of their situation. By creating a shared “container” for open, transparent communication about risk and reward, combined with a common definition for collective leadership, Dialogos help the firm navigate upheaval to maintain stability and performance momentum—and achieve a successful leadership transition.

Overview

The firms leaders were asked what it would take, at a daily operational level, to instill a new paradigm of balance and sustainable focus—one that was both supportive of new strategic initiatives and a stabilizing force for the company. The CEO not only founded the company, but was a front-runner in defining the field itself. It was clear that the emerging leaders needed an environment in which to explore a new definition of collective vs. heroic leadership.

Challenge

In this context, the leadership team uncovered several classic and important growth challenges that would require investment in new thinking and new capabilities to overcome, even while current their levels of activity were pushing some people to their limits.

First, they faced the “Capability Trap”—in which those who worked “hard” found it challenging to take the time to work “smart.” While the attention given to urgent issues of the day or tactics of the moment created incremental improvement in the system, it also disabled the company’s ability to create long-term solutions.

Second, they confronted the “Innovation Dilemma”—where employees, lacking confidence in the wider organization to back them fully, sought to innovate in isolated pockets of the company. As a result, they pushed their efforts without necessarily getting full coordination, resource backing, or buy-in, and ended up with stand-alone initiatives that didn’t function seamlessly with the rest of the organization. This behavior was rationalized variously as “necessary,” “beneficial,” and “the only way it could work” there.

The third dynamic eroding the quality of face-to-face interactions was “Triangulation”—the tendency to speak negatively of one another in an indirect way. While satellite groups of people spoke openly and directly with one another, the wider organization had cultivated a way of talking that tended to discount people behind their backs, or to avoid addressing issues directly and productively. This lack of productive, direct, face-to-face interaction caused recycling of work, produced waste and inefficient use of resources, and exacerbated the Capability Trap.

The final dynamic was the breakdown of trust in the integrity of company operations. This led to the implementation of various new policies and processes, and the installation of a monitor; this increase in rules and oversight generated a negative feedback loop that lowered trust and confidence within the company.

Intervention

The process involved a series of meetings and workshops with senior leaders that allowed a fundamentally new level of business growth to emerge. The goal was to identify a coherent and explicit talent model, one that could be used to evaluate, assess, and develop people and their talents. Each participant from the senior team examined and proposed a core set of the 5-10 capabilities that they believed were critical for their success and, ultimately, true brilliance of function. The following highlights some of the most impacting process design components:

The first was to practice deepening employees’ ability to use “clean talk”—a method of giving and receiving feedback that mitigates the tendency for escalating tension in communication.

Second, Dialogos developed real-time Action Projects as opportunities for practicing skills. To achieve these projects, the leaders created a cross-functional knowledgebase and new talent model in cross-functional teams; this helped leaders to build new relationships, think more collectively about the various areas of focus, and generate new insights.

Third, by exploring cases and subjects that drew from both company experience and principles of moral philosophy, we developed a shared definition of values and the cornerstones of ethical leadership.

Results

The creation of a shared “container” for authentic and transparent communication about risk and reward, combined with a common definition for collective leadership, allowed the company momentum to remain intact through deep upheaval and leadership transition. The ability to address internal relationships and areas of focus helped maintain their core values and, as a result, the firm saw no decrease in ratings or performance while new players have taken on leadership roles at the top.