Leadership training transforms managers

Deutsche Bank and JP Morgan have embarked on programmes to develop their top people to make the transition from managers to leaders.

Peter Burditt, a former investment banker in London who coaches senior investment bankers on strategic development, says managers create routine and equilibrium while leaders drive change and innovation. Managers have a reactive approach, while leadership demands a more proactive role. Burditt says: "Leadership in investment banking is turning the focus around from having the right answers to whether they are asking the right questions."

At Deutsche Bank, a small global leadership development team runs a programme for the chief executive known as the "spokesman's challenge". Ten heads of global divisions are nominated each year by the executive committee to take part, for six to eight months of the year, while they remain responsible for their existing roles. Mike Maffucci, co-head of the global leadership team based in Frankfurt, says: "The focus of the programme is to take high-potential/high-performing individuals, who have been successful in a divisional context, and give them a taste of what it is like to run multi-business operations."

The programme has been running for five years, and consists of three tranches - a personal development track, action learning and a cadre-building element. Individuals are put into teams and the chief executive gives them an issue to consider. They are supported by leading academics and practitioners, as well as the global leadership development team.

The team's results are presented at an annual senior management conference aimed at the top 200 bankers. This year, three of the six recommendations were endorsed with the remainder sent back to the executive committee for further consideration. Maffucci says: "We are making a serious investment in these people, who could wind up on the group executive committee."

However, in running this programme with the use of outside coaches, Deutsche also takes the risk of introducing some of its best people to new ways of thinking that may not fit in with the institution's own ideas.

As one banker says: "Deutsche's idea of leadership is being a maverick the day before consensus is reached."

At JP Morgan, the Leadership Morgan Chase programme is aimed at the top 2,000 managing directors. It was set up by Bill Harrison, chief executive, who takes two days every month to run it. JP Morgan says it is a "values-driven" programme aimed at senior people, which is not just about profit and loss, but about partnership, communication, integrity and leading from the front.

Tom Smith, New York-based managing director in charge of recruitment and development in investment banking in the US and Europe, the Middle East and Africa, says: "When people discuss leadership issues with the chief executive, and hear about his own experiences, they undergo a transformation. We have modelled our programme on what Jack Welch did at GE and it really works."

The bank invites recognised leaders in their sphere to discuss their experiences with the group. They have included Rudy Giuliani, the ex-mayor of New York, Gill Marcus, deputy governor of the Reserve Bank of South Africa, Stelios Haji-Ioannou, chairman of EasyJet, and Dame Stella Rimington, the former director-general of the UK's MI5 intelligence service.

Started 18 months ago, the programme will have gone through the entire global population of managing directors at JP Morgan by the end of the year. Smith says: "It's about the people at the top understanding that we all speak the same language."

Most of the programme has been run in the US, and Smith concedes that Europeans tended to be more wary about leadership coaching. He says: "Going in, the perception was that this was very American and a bit of a sheep-dip, but coming out they were much more enthusiastic at the last session we had in Europe. The access to Harrison and the executive committee, which will field any question on leadership, makes the programme's success."

JP Morgan says the programme must be seen alongside the 360-degree appraisal processes as well as one-to-one coaching within the organisation to measure its true impact. All newly promoted managing directors have one-to-one sessions with the chief executive. From September 2003, vice-presidents worldwide will go on a one-day course, this time run by managing directors

Defining the values at the top level of financial institutions is "the oil that runs the machine", says Smith. At a time when reputational risk is increasingly a minefield for investment banks, it seems likely that the value of such internal courses will be more widely appreciated.