Each morning, I walk past the “Old Lady Of Threadneedle Street” to our offices just next to the Bank of England. While it’s always a beautiful and impressive edifice to pass, this morning it seemed a little more poignant. As Mark Carney arrives for his first day at work, he will face a number of challenges in a new leadership role which are common to many CEOs in their first day in the job. Here’s just a few he’ll be facing:
A tough backdrop
As it is for many CEOs, the economic landscape is tough. The parlous state of the UK economy means the new Governor will have a tough time ahead; but this also provides great opportunities for success. In essence, there seems to be two ways of looking at it:
1) The economy is still in intensive care (despite The Chancellor’s protestations). This gives the new Governor a chance to prove his worth and help the recovery commence; or,
2) The economy is already emerging from the downturn and he can capitalise on this, pressing down harder on the accelerator, becoming seen as the engine of growth.
Either way, Mr Carney will have a lot to live up to and all of the big issues (quantitative easing, interest rates, bank lending etc.) will be under the spotlight from key stakeholders even in his first meeting with the Monetary Policy Committee (MPC).
Expectations are always impossibly high for new leaders and, with a (very public) remuneration package of £874,000, he will be expected to deliver in good measure. So what are the lessons from other CEOs? Make some immediate and resonant changes, deliver some quick wins and get your people on board as soon as possible.
An outsider coming in…
As the first foreigner to run the Bank in its more than 300 year history, the new Governor will also face some cultural challenges from within the organisation. He will need to be sensitive to any potential culture clashes and be sensitive to the nuances of a culture and set of values that are deeply embedded in such an old institution. Cultural adaptation balanced with a need to drive change and modernisation will be vital. Listening skills coupled with a drive to succeed will be pivotal.
The winds of change
As Mark Carney arrives at his desk, the Bank itself has a new and hugely expanded role within the UK economy. As these changes take a grip, he will, at the same time, need to meet an old world, slow-moving and quite “stuffy” culture head-on if he is to modernise and improve the processes and behaviours within the Bank. Engaging people with the changes will be of paramount importance.
From a cultural point of view, ex-members of the Banks’ MPC tell tales of not even being able to remove your jacket in meetings until the Governor gives the nod – aspects such as this will be a real culture clash for any leader landing from North America. As many of the commercial banks are having to do (albeit for different reasons, such as at Barclays), culture change will be a paramount part of Mark Carney’s early challenges. But early signs are positive: as an example, the creation of a new role (a COO, no less!) and the appointment of a female (no less!), Charlotte Hogg, into that role – the most senior female appointment ever at the Bank.
A reputation to live up to
Mark Carney has a reputation as one of the most charismatic central bankers across the globe. Such accolades are always nice to hear from a personal point of view. However, as a leader, Mr Carney should probably also be aware of the warnings sounded in books such as Jim Collins “Good To Great” about charismatic leaders. The evidence suggests that, while they can be engaging in the short-term, they have not always been proven to create long-term, sustainable performance.
Again, from a personal perspective, Mr Carney has lot to live up to as a leader. George Osborne has described him as “the outstanding central banker of his generation”. Feeling the pressure already? The key question is: can he convince his peers, the City and the media that he is up to the job? All round stakeholder management will need to be a critical part of his 100 day plan.
Another big challenge is that his appointment may not be seen as being so positive inside the bank by fellow employees. Deputy Governor, Paul Tucker, had been seen as a favourite for the job and, since Mark Carney’s appointment, has announced he will be leaving the Bank. Getting current employees engaged will need to be a key priority in light of this.
So, quite a lot on his plate then? As all new leaders at the top of organisations find, focusing on the key challenges early will be vital. His track record as a central banker bodes well. But it is his leadership skills which are likely to be the critical ones to be tested first.
By Dr Andy Brown
CEO & ENGAGE Leadership Practice Head