Banks are best run by generalists

"Who are the generalist bankers at ANZ"? That was the first question I was asked by Mike Smith in his first year as chief executive. I was the new head of Organisational Capability.

Had I my time over I probably wouldn’t have answered as I did: "what's a generalist banker?" 

Fortunately, Mike took the time to explain what he meant and why generalist banking capability would be so important to ANZ achieving its goal of becoming a super regional bank. 

Banking, particularly commercial banking, is a complex business. ANZ has more than six million customers across 33 countries, ranging from large global multi-national companies to mums and dads and everything in-between. 

To these millions of customers we provide literally thousands of different financial products and services. 

Because of this complexity, most banks, when it comes to developing talent, specialise. We grow specialists in areas like retail banking, commercial banking, wealth management, financial markets and transaction banking. Sometimes we will broaden people within a specialist area so that they have a mix of product and client facing/sales experience but historically it has been rare to develop leaders across the entire bank. 

That’s what Mike wanted. When he asked who the generalist bankers in ANZ were in 2008, my answer was “we don’t have any”. But out of this conversation was born ANZ's Generalist Bankers Program which six years on has seen 62 people hired (52 currently remain on the program) from over 20 different countries around the globe, all of whom aspire to become in time senior international bankers and country CEOs for ANZ.

Mark Baker, CEO PNG 

Banking is an end to end business with no one part of the organisation able to fulfil its role effectively without the support of others. This is brought into very clear focus as a country CEO. The ‘difference’ I can make can be financial but it is also about our brand and what it means to all our stakeholders, whether that be the local regulator seeing us as well managed, providing innovative solutions to a corporate customer or supporting financial education in remote communities. 

To be able to work effectively across this broad range of activities the single quality which underpins success is ‘adaptability’. This quality allows a leader to interact effectively not only across the organisation but also across the broad range of cultures and markets in which we now operate.

The problem with having only specialists is that there are some roles that genuinely require a leader who understands how a bank works end to end - retail, wholesale, product, sales, operations and risk. And above all gets how to manage a bank’s complex balance sheet (assets and liabilities) and drive a profit and loss from the balance sheet. Mike makes the point “if your experience is entirely specialist in nature then when you encounter problems or opportunities that fall outside your immediate area of experience you won’t know which of the many levers at your disposal to pull”.

Lavanya Nadarajah, Head of Emerging Corporate ANZ Vietnam and Generalist Banker 

My role is very broad - responsibility for the balance sheet and its performance, direction of the business and its coverage and personal and career development of my staff. It gives me the opportunity to bring my experience and networks from mature markets across business divisions to an emerging market like Vietnam.

In ANZ the primary roles that benefit from a leader who understands how a bank works end to end are the Country CEO roles and of course Mike’s own role as Group CEO. 

Each of the 33 countries in which ANZ operates has a CEO or Representative who is not only responsible for driving the P&L in their market but also manages relationships with regulators, government and other stakeholders. That person is accountable for ANZ’s license to operate.

Tammy Medard, CEO ANZ Laos

The role of a bank CEO has changed. We need to be more than strategy setters or sales-leaders. We also need to thoroughly understand our regulatory obligations, our end-to-end operations and our risk management procedures. Of course we have subject matter experts along the way who get into the detail and assist us but regulators, our customers and investors want to see that their money is safe and that responsibility reaches all the way up to the CEO.

On any given day I can have a meeting with an ambassador, government official, the management team of one of my customers or be leading a town hall for my staff of 90. I make decisions on loans that span multiple years and on how we will be upgrading our IT infrastructure in years to come.

My roles in risk management, credit assessment, management information reporting and as a chief of staff broadened my lens across all elements of banking, not just the sales side.

Our 52 current Generalist Bankers and their future contemporaries (we hire around 10-12 every year) are part of a structured development program. For each banker the program will run for 15 years – the time we estimate it will take to be ready to lead one of our larger countries in Asia or the Pacific. 

When I tell people about the program externally their first reaction is generally to question its sustainability. “You’re hiring Gen Ys and expect them to stay with you for 15 years? It’ll never work” is a typical response. But in my experience so far there is nothing to suggest that the generation of young leaders we are hiring onto the program are any less committed than the generations that came before them. Yes, they have high expectations. They should. Our challenge is to provide them with meaningful, challenging careers, reward them well and not allow them to become bored. If we do all of this then I fully expect a good number of them will work their whole careers with ANZ.

The Generalist Banker program begins with a standard two year rotational phase where participants work for six months in Risk, Operations, Institutional Banking and either Retail or Commercial Banking. These two years develop a strong foundational understanding of banking including treasury (funding and liquidity and capital management).

 After this initial two years, bankers are placed in a permanent role in one of our 33 markets, moving every two to three years, building experiences across different markets (developed and emerging) and banking disciplines, ensuring a balance of breadth and depth to ensure they become ready to lead ANZ’s country operations in the future.

 As David Tam, head of business management in Hong Kong and a Generalist Banker, says “the learning aspect around understanding how a bank actually works and the ability to help shape decisions to continue the growth of our business is what I enjoy most about this role. I believe my background and experiences as a generalist have helped me to add a different perspective to the businesses I work with”.

 The Generalist Bankers Program and ANZ’s broader enterprise talent management initiatives were recently featured in a Harvard Business Review article “21st Century Talent Spotting” . The article by Claudio Fernadez Araoz from Egon Zehnder talks about the relative importance of potential, as measured by attributes such as curiosity and determination, in identifying future leaders, alongside more traditional measures such as experience.

 Jonathan Harvey

Generalist roles provide individuals the opportunity to build depth across a breadth of disciplines. A generalist pathway provides individuals the knowledge of key levers in each business function and the interconnectedness of these levers that help make important strategic decisions for the business. 

The ANZ Generalist Program provides the added benefit of understanding businesses across the ANZ network countries which are in varying stages of maturity and risk. Managers in the program can share best practices and solutions from one part of the organisation to another. 

As Tammy Medred, our CEO in Laos says, “I often get asked ‘what job best prepared you for this role?’ and the reality is that it is the collective of experiences that best prepared me for this role”. 

In the Generalist Bankers Program ANZ aims to hire for potential not experience. Our view is we can teach people the skills to be a banker but what is much harder to teach are qualities like curiosity, determination, comfort with ambiguity and, as we say at ANZ “the ability to see the world through a wide angle lens”.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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