Chief executive officers at financial services companies are adding the title "human resources manager" to their portfolio of duties with increasing frequency, according to a report by Andersen Consulting.
Bank CEOs are finding that the increasing demands of a global market require a work force that is more flexible, creative, and nimble, and the CEOs themselves must stimulate change, according to William E. Storts, a New York-based managing partner at Andersen and the report's author.
"Increasingly, employees have to be part of a global organization," Mr. Storts said in an interview. "CEOs are recognizing that their competitive advantage is in the people they employ."
Harnessing a work force's combined intellectual capital has become more critical as banks move into Wall Street-style, fee-based businesses like investment banking and asset management, said industry observers.
"At Wall Street firms, all of the company's assets go home at the end of the day," said Lee Pomeroy, an executive recruiter at Egon Zehnder International in New York. "As banks move toward the same fee-based businesses, the people that run them get more important."
CEOs are also becoming more and more absorbed in internal management issues, Mr. Storts said. "They are all working creatively on the issue of how to make the organization more competitive."
Coaching the next round of corporate leaders has become a main objective of the CEO, said Mr. Pomeroy. "CEOs in virtually all fields are worrying about succession, about building talent, and about developing the organization."
A number of banks have recently grappled publicly with this issue, Mr. Pomeroy said.
For example, Frank V. Cahouet, chairman and chief executive officer of Pittsburgh-based Mellon Bank Corp. last month announced his successor after months of industry speculation about it. Analysts had begun to argue that Mellon might be sold because the succession had not been clear for a long time.
In December, Walter V. Shipley, chairman and chief executive officer of Chase Manhattan Corp., announced the creation of an inner circle of executives from which the next leader of the bank would be drawn. At the same time, he said he and Chase's president, Thomas Labrecque, would act as "co-equal partners."
As consolidation continues, top executives at acquiring banks are finding that they need to strike a balance between encouraging diversity and building a cohesive corporate culture, Mr. Storts said.
Teamwork, which Mr. Storts said is a hallmark of the new corporate structure, has been essential for many CEOs to navigate the often difficult months after they acquire a bank and have begun to absorb it.
"We try to include new people from the acquired bank as early in the process as possible," said Kenneth Neilson, chairman and chief executive officer at Hubco Inc., a $3 billion-asset banking company based in Mahwah, N.J., which has acquired seven institutions in the last two years. "But it certainly has been a challenge."
Team-building exercises are continuing, Mr. Storts said. "A football coach never gets to the point where he is winning every game. He is always trying to get better."
