Banks that want to succeed in today’s business environment would be best served not by relying solely on a charismatic leader or pair of leaders, but by finding better ways to collaborate. This reflects changes in society generally.
Individuals have typically been credited with making great progress in history — from the Mona Lisa to Beethoven’s Fifth to the general theory of relativity. But is this progress due to the work of lone geniuses or due to the collaboration of many talented individuals? Art is one case in point: The Dutch painter Rembrandt was once credited with many works of art that have more recently been attributed to others working in his studio — an overdue nod to the power of collaboration.
Today there is a strong case to be made that the greatest progress and most effective decision-making are being propelled by neither the lone genius nor even the partnership of two great minds (for example, Crick and Watson, Lennon and McCartney) but by the collaboration of many minds.
In fact, the speed of change, in terms of technology and business models, is so rapid that only by leveraging a much wider network of intelligence is it possible to stay ahead of the curve.
This collaboration can take many forms, and banks can take advantage of two major assets: interdependent networks and open source systems.
The first concept, interdependent networks, is nicely illustrated by recent discoveries in the field of tree science. Two decades ago, while researching her doctoral thesis, the ecologist Suzanne Simard discovered that trees communicate their needs and send each other nutrients via a network of latticed fungi buried in the soil. In other words, she found that they “talk” to each other.
This upended the traditional understanding that trees support their own needs in splendid isolation — and so it is in social and corporate and banking structures. Banks that succeed in building stronger connections between employees, departments and units will see better teamwork and greater productivity.
Being more aware of colleagues’ interests can help the whole team succeed. Traders, operations managers, accountants and software engineers, for example, all have shared interests in the positive outcome of each trading day and each trading position. Better that they learn to collaborate to improve the systems they use and the accuracy of the data they generate.
Design labs and innovation hubs are tools promoted by those who are looking to strengthen those interdependent networks of collaborators. Furthermore, modern IT collaboration tools for software development and idea generation are now far more available and less expensive to use across far-flung locations. Some banks have even developed new space specifically geared toward generating innovation in areas such as artificial intelligence and neural networks with many practical applications to banking. These take advantage of available virtual and physical collaboration networks.
Banks can also take more of an “open source” mindset within their own walls. The internet is a good example of this. At the time of the development of the internet, there were other competing protocols that were just as likely to have gained traction as the World Wide Web. The fact that the World Wide Web protocols and source code were distributed widely and at no cost was what guaranteed its broad and rapid adoption.
Yet banks have traditionally fostered a closed source culture, meaning employees learn to develop techniques to best protect their positions, and the knowledge and information they possess. A good example of this comes from my own experiences supervising a team of hedge fund accountants at an asset management firm some years prior to the financial crisis. I found a real aversion toward sharing information between colleagues — and between colleagues and their bosses and clients. I believe that this was due to a misplaced idea that not sharing information would make the client dependent on them and so would protect their positions. It probably had the opposite effect, and, in addition, it prevented lessons from being shared across departments and people.
Rather than allowing good practices and products to quickly spread across the entity like the internet, they get stuck in corners and silos. Creating an open source culture means fostering a sharing, nonproprietary culture and promoting awareness of colleagues who are developing innovative practices. It would not be an exaggeration to say that the financial crisis was exacerbated by the fact that so many individuals, including many so-called leaders, were working in silos and concealing what they were doing to their superiors and colleagues.
A bank’s culture should incentivize employees to share their ideas openly, and they should be given credit for doing so. A collaborative and open source culture can go a long way toward making rapid progress in banking, not to mention across our society.