A strong succession plan requires more than identifying names on a page. Mika Moser, founder and CEO of At C Level Consulting Group, joins Banking on Community to discuss how banks can assess leadership readiness, develop high performers and prepare teams for technology-driven change. She also explores the role culture, curiosity and clear communication play in attracting talent and building a stronger leadership bench.
Transcript
Tara Schultz(TS): Welcome back to “Banking on Community.” I’m Tara Schultz and I am joined today by my podcast partner in crime, Saxon Prater. Hey, Saxon!
Saxon Prater (SP): Hey, Tara!
TS: So today we’re talking about something very different than our normal tech topics, yet it’s really critically important for the landscape of banking executives. It’s leadership and talent under pressure. Technology is changing faster than most banks can even train for it. Margins are tighter.
Banks are competing with each other for customers, as well as they’re competing with fintechs and with bigger banks, and really with entirely different industries for the same talent.
So today we’re asking, what does it actually take to build a bench that can hold up under that kind of pressure? And where do banks need to rethink recruitment and leadership development?
Joining us today is Mika Moser, CEO at C-Level Consulting Group and former president of Bank Director, who I had the pleasure of meeting at this year’s Bank Director event, AOBA, at a women’s luncheon through our mutual friend, Michelle King. Mika spends her time inside banks working directly on this exact problem. So we are really glad to have her here. Mika, welcome to the show.
Mika Moser (MM): Thank you so much, Tara. Thank you so much, Saxon. Very pleased to be here. Thank you for the invitation. Looking forward to the conversation.
TS: Pleasures ours. Before we dig in, give us the quick version, Mika. What are you seeing right now across the banks and executive teams that you’re working with that’s really different from even two or three years ago?
MM: Yeah. What I’m seeing with a lot of the conversations I’m having with a lot of bank CEOs and their executives really is around the importance of having a very strong people strategy and making sure that that is aligned with their growth strategy. It’s something that I maybe didn’t have a whole lot of conversations about maybe 10, 15, 20 years ago. But I think what we’re seeing right now is that boards and executives are really understanding the importance of making sure that the people align with the growth strategy. Do we have the right people in place? Do they align with where we’re trying to go? And really making sure that we’re being really thoughtful and intentional about building up that next bench of leaders. So those are really the conversations that I’m excited to have and have been having for the past couple of years now.
SP: One area that I’d like to talk about is succession planning. Banks know they need a succession plan. They put it together. But my question for you is, how do they know if the person who is pinpointed to be in that succession plan is actually ready? Or are some banks just assuming so because they have it documented?
MM: Yeah. I think honestly, and I hear from a lot of CEOs and HR executives that, yeah, our succession plan is probably more rooted in assumptions than in reality. I think that they have done a really good job with the process of documenting succession planning. So they’ve completed the nine box or some other equivalent framework, where they’re able to really identify who would make a great successor for some really key positions. But unfortunately, that’s kind of where it’s ending for a lot of them. They’re then sort of sharing that with the regulators, and then they’re even admitting that it kind of goes into the desk drawer, and we don’t really look at it until lo and behold, somebody leaves unexpectedly or is about to retire. And so they are really sort of identifying that, hey, we need to take it a step further.
We actually don’t know who is actually ready. And so readiness is really looking at have we assessed where the technical gaps are? Have we assessed where the leadership gaps are? So what is their capabilities, their aptitudes? How do they lead? How do they think about leadership?
Then creating a timeline for how to get them ready. Is this a two-year endeavor, or are we thinking this is maybe five years out? And then creating that development plan to actually get them ready.
I’ll also say when it comes to readiness, it’s really about are these folks ready for the bank of the future? I think we do a decent job thinking about who is ready for the bank that we’ve built today, but where are we going five, 10 years from now, and who on our team is going to lead us through those different phases? And have we assessed if they really have kind of the get it, want it, and capabilities to go after that?
TS: I think you said that very well. So as it relates to when they identify the gaps and bench strengthening as a whole, what does effective leadership development actually look like inside of a bank today, especially when leadership is often stretched thin, staffs are stretched thin, and don’t have time for traditional lengthy training programs?
MM: Yeah, absolutely. I get that a lot of executives are stretched very thin right now, and teams are doing a lot because there’s so much happening inside of their banks. But leadership development and bench strengthening is a really critical piece to the overall business strategy. And so there are banks that are truly investing in this work because they understand how important it is for the success and the future of their organization. And so there’s a couple of different things that I’m seeing.
One is a lot of banks are developing internal leadership development programs. These are lengthier programs. They’re definitely 12 to 18 months long. They really are looking at very specific leadership skills, shaping those, crafting those, doing some practical application work, and kind of identifying a small team of people to go through those programs. Where banks are not able to invest in those longer-term programs, they’re generally sending them out to some industry events, using their other banking resources where they can kind of connect with other leaders in that same function or who have more seniority than them where they can network and have some conversation around what good leadership looks like.
The other thing that I’m seeing is banks are building out mentorship programs. While some of them are highly structured, others of them are very organic and sort of just kind of happening a little bit more ad hoc. And this is where they’re taking sort of the emerging leaders or those that they have identified as potential successors and pairing them up with more experienced leaders inside of the bank. And the goal here is to regularly meet so that they can connect, share advice, figuring out experiences, what’s working, what’s not working, who are some key relationships that they can develop. And so I see those mentorship programs being a really strong way to start strengthening up that bench.
And then the third way I’m seeing is banks are really investing in folks like myself, and implementing one-on-one coaching and/or group coaching for those internal leaders. This allows the internal team not to be stretched so much, so you’re getting an outside perspective. You’re getting somebody who can come in and sort of ask some questions, be a safe space to puzzle through some challenges. Also think about where there’s opportunities for them to grow. Where is it that they would like to build some relationships. Kind of giving them a safe space to kind of puzzle and be a good thought partner. So those are some of the different ways that I’m seeing banks are basically doing some bench strengthening internally without pulling on all the resources that they have inside of their organizations.
TS: Yeah, I think that’s really important. I’ve seen some success with a couple of those on executive coaching, the mentorship programs.
I’ve personally benefited from an outside executive coach. I think it challenges the way you think about things, removes all internal perceptions, and just gets you to look at things differently, gets you to really force grow yourself. And as far as mentorship, one additional point I would make is get outside of your area. So if you’re in operations, get outside of your area. If you’re in sales, get outside. Again, it challenges the perspectives and the way your role looks at challenges and looks at customer experiences, and it really widens the lens. So it may challenge the way you approach things in your future roles. So that’s just another add-on.
So for banks that genuinely don’t have the bandwidth for a formal program right now or full executive coaching, what’s one thing that you think they could do this quarter that would move the needle?
MM: So interesting enough, if there’s not an industry event or you’re not able to find a mentor, I think good books and podcasts are also a great way to sort of start the process. There’s a lot of good information out there, a ton of great books and resources that I rely on as a leadership coach and advisor that can at least start to help you start to think about things a little bit differently and to start identify where there’s some opportunities for you to grow. I do know some banks have book clubs internally where they do lunch and learns and things of that nature where they identify a leadership book. Everybody reads it, and then they kind of come together and talk through. So that’s kind of an easy lift that may be a little bit of fun where you can start to think about what good leadership looks like because honestly, good leadership really starts with some self-awareness and some mindset shift.
And so that’s a good, easy first start that a lot of banks are doing right now when they don’t really have the resources for something a little bit more extensive, like a leadership development program.
SP: Industry events, too. Speaking for myself, whenever I’m able to go to a conference or something like that, if it happens to align time-wise, I know that I always learn so much more from these peer-to-peer discussions, from networking. There are probably people who have exactly your same problem.
And so you don’t feel so alone and like you’re going crazy trying to figure this out because you aren’t alone, and you can even learn from them what they’ve done to resolve whatever the issue is.
MM: Yeah, absolutely. There’s something powerful to being around a peer because they not only can share their experiences but also kind of validate your own. So you’re like, “Okay, I’m not the only person kind of going through that struggle.” So 100% agree. Yeah.
SP: Mika, earlier in the conversation, you said something about preparing your institution for not just a couple of years from now but further in the future. So that got me sort of thinking about the constant change in technology and AI specifically.
So how are leadership roles and expectations changing in that light with the constant change or evolution of AI and just rate of change?
MM: Yeah. AI is to me one of those most pivotal moments that’s just going to fundamentally change how we do work. It reminds me very much of when the smartphone came online. I think it’s going to have such a huge impact on our organizations. And I think what I’m seeing right now inside of financial institutions is that we’re just having a really hard time figuring out what this tech looks like inside of our banks. Like where do we actually start? Because it’s moving so fast, and there’s so many different facets to it.
But when I think about AI and leadership, there’s sort of three things that I sort of think about. One is who is going to lead it? And so right now I’m hearing a lot of boards and CEOs saying, “Well, I need an AI expert in the boardroom. I need an AI expert in the C-suite. We need an AI expert at the SVP level.” And I’m like, “Well, good luck,” because nobody’s really an expert in AI at the moment because it’s just moving so fast, and it’s really hard to keep up. And so when I think about who’s going to help lead AI inside of your organizations, it really comes down to leadership skills. It comes down to who is curious, who is open-minded, who likes to think a little bit differently and turn things on its head a little bit. Who is comfortable asking the tough questions?
Who can see how this is going to touch all the different facets and teams inside of the organization, and what is the impact that that is going to have on them?
So it really becomes like who has the right aptitude and the ability to think about it holistically, more so than who actually knows the insides out of that tech. The other thing I think is what AI is doing is it is going to change actually … how we work. And so no longer do we have to be the smartest person in the room, no longer do we have to know the answers to everything. And so that’s the fun thing about it to me, is now we as humans get to lean into what our gifts are, and we can rely on our judgment and our discernment, our ability to read that data and have it tell the story of where it is that we need to go as an organization.
So I’m always encouraging banks now, embrace the fact that you don’t have to know everything. That’s the beauty of AI. And now we really get to lean into our human skills to help implement that technology to help us move forward.
And then the third thing is something that I’ve just been playing around in my mind and having some quick conversations with executives about. Because the way that I look at AI is it’s more than just technology. I actually think that the more that it evolves, it actually should be treated more like an employee. And I think our workforces are going to be much more of a hybrid mix of humans and robots. And so when we hire a human, we think about, okay, here’s their job title, here are their responsibilities, here’s their expectations that we have for them. Here’s how we’re going to hold them accountable. Here’s how we’re going to measure their performance. And I think we’re going to have to do the same thing with AI.
And that is a very different way of managing AI and a tech than it is managing a human. But that, again, is a leadership skill. How do I manage a hybrid workforce? How do I hold our AI accountable? So whether or not the person that’s leading AI in your organization is talking about
the people side, somebody needs to be in the room talking about how this actually impacts our people, and that it’s actually more than just an IT conversation, it’s also a people conversation.
TS: Yeah, I love that. You said something about curiosity, and AI is an incredible technology, but it’s just a technology. So when we think about it, it’s really useless if you don’t have that baseline curiosity of how can I be better at what I’m doing? How can I serve my customer more effectively? How can I provide them things that they don’t even know that they need yet at a time of need with this technology?
So it’s not like a point solution that every single area has to master, but they do have to master really documenting and understanding and aligning organizationally wide what problems that they’re even using AI to solve and what the eventual business case outcomes or value outcomes are for not only the organization, but their customer, the customer experience, etcetera.
I saw a recent bank director survey on comp and talent on this topic alone that said 69% of CEOs, chairs, and independent directors say their C-suite needs AI expertise right now ahead of MNA integration and digital transformation skills, which is like, wow. With what’s going on in the market, I get that quote, but it all starts with curiosity.
But leading into a lot of the change management and MNA happening in the landscape today, during periods of growth or change, what do you feel like in your conversations with executives tends to really break down first with teams when handling this change with teams and culture? And does that risk go up when the change is tech-driven like it is with AI now?
MM: Yeah, sure. So I know everybody is going to assume that I’m going to answer communication. Yeah, that’s the obvious answer, communication. But I do think it’s kind of multifaceted because really the underlying issue is change. That’s really what it is. And the interesting thing about change is that people don’t actually fear change, they fear uncertainty. And so our job as leaders is to navigate people’s emotions, their thoughts, their dreams through those periods of uncertainty.
So that can be through an MNA integration, that can be through AI, that can be through going into a new market, that can be through a new business model. At the end of the day, what they fear is not knowing what is going on and sort of feeling like they are not able to do their jobs because they are missing information. And so helping people navigate through that really is a skill. That is a leadership skill. What is it that’s driving the fear? And then building a communication plan and a strategy to address that. And that really involves over-communicating.
When you think you’ve communicated, continue to communicate and communicate again and then again. But also being really honest about the change. I think what happens is a lot of leaders say, “It’s going to be great. You’re not going to feel anything. It’s just going to be great for everybody.” And that’s not really true because it’s messy. It’s going to be messy. Change is messy. And so when we can sort of be really honest and embrace the challenges that are going to come with that change and ask for some sort of grace and ask for people to work with us on that change, I think you can get a little bit better reception.
And then being open to listening to the feedback and saying, “Okay, I hear you, that that probably didn’t go as well as it should have. Let’s figure out how to resolve that and then move forward.” And I think, again, those are all leadership skills, but really it’s really kind of helping people navigate through, again, those periods of uncertainty and the emotions that are coming up around that for them.
SP: I love that framing of the distinction between uncertainty and change. Life is change. We have change all the time, and it might be negative or positive, depending upon the context. But at the end of the day, these are human beings we’re talking about, and human beings have emotions. And so if you can resolve some of that uncertainty to the best of your ability, obviously you don’t want to guess, and you don’t want to be wrong. You want to tell them if you don’t know something. But there’s a whole credibility implication and things like that. So I really appreciate that framing.
Speaking of uncertainty, though, if, let’s say, a leader wants to convey confidence, wants to keep everybody calm throughout whatever the change is, but they don’t actually know the answer to something, what suggestions would you give to them then?
MM: Yeah. So what I often encourage leaders to do is to lean into the why and to where we’re going. So we generally have a destination point. There is a reason we’re doing what we’re doing. There is a goal in mind, and there is a reason why we have chosen to make this change. And so leaning into that, because oftentimes, we tend to gloss over that or we don’t really communicate that that often.
So I always encourage them to tell people where we’re going, why we’re going, what is the outcome that we’re expecting through this change. And then you can be a little bit more, “I’m not really sure how we’re going to get there,” and a little bit more authentic around the course. And so, “This is our plan right now for how to reach that destination. It may change, and when it does change, I will let you know that it has changed.”
It does remind me of an analogy that somebody once shared with me once, is it’s much like flying in an airplane, and the pilot comes on and says, “Hey, we’re diverting to another city.” And if they were to just stop talking, the whole plane would just erupt in sheer panic. Like, “What is going on? Why are we going to another city? What is happening?” But generally, pilots come on and say, “Hey, we are diverting to another city. We’ve got a lot of turbulence or weather in the area. This is safer for us, and we’re going to get you there in the next 20 minutes. And we’ll let you know what we’re going to do after that.” Everybody’s much more calmer around that communication than just sort of the blanket statement of, “This is what we’re doing.”
So I always encourage leaders to really think about it from that standpoint, that people just need to know what is going on so that they can start to calm their fears down. Otherwise, they’re going to start making up stories, and then that’s where the resistance comes into play, and that’s where it becomes a lot challenging for people to adopt that change. So again, focus in on the why and where we’re going, and then how we get there, just admit that it’s going to be a little bit messy, and it may change course, but we’ll definitely keep you posted. So. Yeah,
TS: unless that pilot says, “We’re diverting and landing in Hawaii instead,” I’m going to need more context. Lot of extra detail.
SP: I don’t know. That sounds like an upgrade to almost anywhere that I would be going, so. Mika, I want to switch gears a little bit and talk about recruitment. Obviously, that’s a huge piece of the whole talent strategy and talent discussion as well. And at the beginning of the episode, Tara mentioned how institutions are competing for talent. It’s not limited to banking by any means, but fintechs, larger banks, you name it.
So how are the most successful banks differentiating themselves from a talent and recruitment perspective?
MM: It really is truly around culture. That’s really how they’re doing it. What’s interesting right now is the expectations that talent have about where they work has shifted dramatically over the past 10 years. Today’s talent, especially when they are high-performing, great talent, they have options. And so they are looking for a place where their values align with the organization’s. They’re looking for a place where they have a voice. They’re looking for a place where they feel like they belong, meaning they see people like them in positions of leadership and influence, and that they can be who they are inside of their workplaces. And they’re also looking for opportunities for growth.
Those are really critical right now for a lot of great talent. Compensation is always going to be number one. Everybody’s here to make a living, and so that is a big driving force. But ultimately, what’s making and breaking their decisions really does come down to culture. And so what I’m seeing is a lot of banks investing in shoring up their culture, and it’s not just their core values. It really is: what do our benefits look like? What does our remote policies look like? How do we give back to the community? What is our purpose? What is our mission as a bank? How do we show up as leaders? How do we help people move up inside of the bank? And when you’re able to communicate that really effectively so that when people are making those big decisions about where they want to work, it aligns with what they’re actually experiencing.
And so it really is culture, but it’s more than just stating, “This is our culture.” It’s communicating that and actually living it out and showing that that is actually the type of organization that we are.
So yeah, it’s definitely culture is the best way to sort of differentiate yourself here.
SP: I think all these topics are so deeply interrelated. You were talking about leadership training and mentorship. That often sets the tone for culture, right? Oh, yeah. And if you have a really good mentor, you’re probably more likely to want to stay on. You probably feel more valued in your role.
MM: Absolutely And people want to work on a winning team, right? They want to work on a team that’s growing, that’s energized, and leaders are giving back and connecting and building relationships with them. That’s what gets people excited and engaged. And so those are the organizations that people want to work for.
TS: So Mika, typically when we talk about build verse buy in these conversations, we’re talking about it from a tech or an MNA standpoint, but today, we get to pivot a little bit.
So when there’s a leadership gap, how do you decide or how do you guide the bank executives that you’re working with help them decide whether to develop someone internally versus hiring from outside. And what have you seen banks navigate there?
MM: Yeah, absolutely. So this is one of those answers where it kind of depends. And what I like to sort of start with them is, again, I said this sort of at the top of the conversation, is where is it that you’re trying to go? Because that’s going to dictate whether you buy or build. So say you’re trying to go somewhere in the next five to 10 years, maybe you want to become more of a digital-focused bank. That’s going to tell you what type of leaders or what type of team and talent that you’re going to need.
And so maybe you already have those folks in-house, and then you just need to sort of develop them and get them ready, or maybe we need to look outside of the organization for some people that have more experience in doing that. So it really does, to me, start with where it is, again, that you’re trying to go, and then that’ll help dictate whether you need a buy strategy or a build strategy.
Obviously, the build strategies are more cost-effective, and I think what happens is we get very reactive when it comes to filling open positions. So we’re obviously seeing this huge wave of executives retiring, and there are a lot of uh-oh moments happening inside of banks right now. And so maybe we aren’t able to build up our team quick enough, so now we are probably going to have to buy some talent outside of the bank.
So I would say think about right now who on your team, if they were to leave in the next three to five years, is going to be a big gap. Align that with where you’re trying to go, and then figure out what role it is that you need to fill. And it may be somebody internally, and you may actually have to buy some experience that you don’t currently have.
SP: If you set aside retirement, because obviously that’s a common reason why people are leaving, what are some other reasons why a bank might lose a strong leader? Or people who might be worthy successors are then going elsewhere.
MM: Yeah. So, when you have a high performer, they are going to be highly sought after by competitors, and not just bank competitors, but again, like fintechs and other industries that are adjacent that are going to want that top talent. And then again, what I do see happen is, this kind of goes back to our succession conversation. I’ve identified our successor, but I’ve never told them that they’re the successor, and we never had any conversations about what their future looks like in this organization.
And so now they’ve become a higher flight risk because they don’t actually know. They don’t have that to weigh against their decision when the competitor knocks on the door and offers more money. They’re like, “Well, I guess I’m going to go because I’m not really sure where my future is.” So I’ve seen that happen to a number of banks where they have lost the successor because they never had a conversation with the successor. And it is something that obviously you have to be delicate about because you can’t overpromise a position on any given timeline.
But I do think letting them know, again, kind of where their growth opportunities are, we see a future for you here that is bigger than what you’re doing today, and we want to get you there, and we’re going to invest in you to get you there. So that’s a very different conversation than just sort of marking them down and then putting that, again, in sort of a desk drawer.
TS: And if they’re not painting that picture, then someone else will, essentially.
MM: Somebody else is ready to paint the picture. Absolutely.
TS: Yeah. Last one, quick fire. If you had to name the single biggest leadership blind spot in community banking right now, what would it be?
MM: So this one’s a tough one, Tara, because I have a couple. But I think I’m going to go with promoting high performers and assuming they’re going to be effective leaders. And I think what is happening is that the way that we lead today is very different than what we did 10 to 20 years ago.
There’s just so many different factors at play right now. We’ve got multi-generations working under the same roof, four at the moment, five soon with alpha coming on.
We’ve got dispersed workforces. We’ve got AI and technology. We’ve got high competition. And leadership now requires folks that have the skills to lead people through that, and that’s not easy. And that’s also something that is not taught. And so you’re looking at your high performers saying they’re really good at their jobs. They are now going to be an effective leader, which is probably right because they are capable, and they have shown that they are accomplished and experienced and can do the job, but leadership is a different skill. And so setting them up for success by investing in their leadership development, giving them mentors, giving them resources so that they actually can be successful as a leader and not just as a high performer.
But I am seeing a lot of banks kind of coming to the realization that, okay, we promoted somebody, but now they’re sort of struggling in that executive role and trying to figure out how to fix that. That’s the biggest one that I’m seeing right now.
TS: Oh, don’t get Saxon started on generational research and all of that.
MM: I love it!
SP: And also just that resonates, what you just said resonates with me a lot from just the perspective of I’ve known engineers who they get to a leadership role, and now they have direct reports, and they actually aren’t very happy necessarily because it’s not their wheelhouse.
It’s not what they’re passionate about. So it makes sense to me that it takes a particular type of person. Sometimes it requires time. Sometimes it requires training. But I love that you can’t assume just because they’re skilled in one field that it will translate to everything else.
MM: Yeah. Leadership is a different skill. I think that’s the blind spot is that we forget that it’s a different skill.
SP: All right. Well, Mika, this has been fantastic. I have really enjoyed talking with you. We at CSI, we always say that our people are our greatest asset, and I think you’ve given our audience a lot to think about in terms of how they make sure that their greatest asset, their people, are well-considered and that they have a clear strategy.
So thank you so much for coming on.
MM: No, it was great. Thank you so much. I’ve enjoyed the conversation.
SP: Thank you all for listening to this episode of “Banking on Community.” We’ll be back soon. You can follow us and like and subscribe wherever you get your podcasts. You can also find us on LinkedIn or at csiweb.com.
But until next time, keep Banking on Community!