Why do banks continue to waste talent?

Abstract

Purpose

The purpose of this paper is to respond to a claim in a recent McKinsey publication (24 July 2008) that European banks are short of talent. The paper argues that banks generally waste talent. They are not short of talent. It argues, based on the author's book The Accountable Leader, also published in July 2008, that accountability is the key to effective leadership and management of talent.

Design/methodology/approach

The material is based on case study work done in a number of banks. The paper is therefore a blend of viewpoint, case study material and concepts. Although the initial focus is financial institutions, the theme is applied to other organizations. Supporting evidence of this viewpoint is provided from a 2007 Webcast for The Conference Board of New York. Case study material based on 40 years' experience in 70 countries, provides evidence of key concepts outlined: hierarchy heavy organizations, their misuse of grading systems and the reality of career dead ends as a result.

Findings

The paper demonstrates how the above problems lead to the stunted development of bonsai managers. This is a metaphor to illustrate the extent and reason for the waste of talent in banks for example, the root cause of which is their inability to accurately define accountability.

Originality/value

The paper sets out four pre‐requisites for effective leadership. It argues that most CEOs do not know how to establish the first – an accountable organization. It debunks the superficial but popular myth about the shortage of talent. The real problem is the shortage of organizations, which know how to manage talent. They have too many leaders, not too few!

Citation

Dive, B. (2009), "Why do banks continue to waste talent?", Industrial and Commercial Training, Vol. 41 No. 1, pp. 15-19. https://doi.org/10.1108/00197850910927714