Financial Services Bosses Among Britain's Worst Leaders

Bosses in the financial services industry are among the worst leaders in the UK, according to research released by the Head Heart + Brain consultancy.

In a study that looked at the quality of leadership across all industries, the consultancy polled more than 2,000 people and asked them what they thought of their managers.

The index is compiled from various factors, the most important being how leaders helped their employees understand change.

It was in this category, the so called "brain-savvy" index that leaders in the financial industry did very poorly. They scored -33.

Manufacturing was the only sector that had a worse score at -46.

"It is clear that the credit crunch and the resulting recession, far from bringing out the best in our bosses, brought the worst in them," said partner Jan Hills at the Head Heart + Brain.

The study showed that for a sector to do well, it had to score highly in the "brain-savvy" category.

"The best bosses lead their staff in a 'brain-savvy' way, in a manner closely aligned with the way that people's brains are wired to respond best to leadership," she added.

"Neuroscience tells us leaders must follow several golden rules if they are to get the best out of their staff. Crucially, they must help employees understand why organisational change is good for them."

Adapting To Change

Numerous problems were identified with leadership in the UK's lucrative financial sector that witnessed huge disruption during the worst economic crisis in living memory.

According to the study, managers did not set clear targets and were not providing the effective leadership employees needed in stressful times.

Just 11% of financial service employees thought their bosses were good at managing change.

When asked "How clear are you about your role at work and the targets you need to achieve this year?" 40% of employees in the industry replied that targets were not very well defined.

Similarly, 86% of employees in the financial sector have experienced organisational change, but 22% of bosses failed to help them understand what it meant.

Even more worryingly, 40% of financial service employees reported that they had been put under intense pressure over the last six months compared to the average for all sectors of 22%.

Hills explained the health of the UK's economy was tied to the leadership in its key industries.

"The economy always has to recalibrate after a recession. For it to recover, people and capital have to move away from declining sectors towards more productive ones. And for that to happen organisations need to go through periods of change," said Hill.

"But many of those organisations are failing to carry out that change successfully because they are being led poorly. Leaders aren't communicating why change needs to happen, and they are not helping employees realise why it is good for them - which is the key to implementing change successfully."

Overall Effects

This research also found that the poor level of "brain savvy" leadership across Britain had a negative effect on employee engagement generally.

Less than one third of employees are fully engaged in with their job and over one in seven UK workers reported that they are not engaged with their organisation at all.

Furthermore, the study concluded that this contributed to low levels of productivity in the workforce that affected the wider UK economy.

Output for each worker per hour in Britain is 19 points lower than the average G7 nation the study said.

Good News

However, sectors including telecoms, construction and trades had the best bosses said the study.

Just 14% of telecoms professionals had been put under stress from their leader.

Telecom bosses scored 78 on the "brain savvy" bosses index.

"The UK's Telecoms industry is flying high - Inmarsatt's full year results for 2012 showed a solid return to growth for their core mobile satellite services business. And Vodafone reported more profit before tax in 2012 than it had done since 2004. Its latest takeover will help make it a feasible competitor to the biggest worldwide comms companies like Liberty Global," said Hills.

Lessons

Leadership in the financial sector was important and had to improve to sustain UK growth.

"Leaders in finance, insurance and accountancy - as well as manufacturing - are managing their employees badly. That has massive implications for the country - first-class leadership in these sectors is essential if we are to return to the wider economy to full growth," said Hills.