We can all agree that leadership styles severely impact employee productivity, inter-departmental communication, and consequently product and business development. Leaders are essentially meant to enhance employees’ commitment towards reaching their full potential in achieving a value-added shared vision, with integrity and passion.
Leaders across industries are generally prone to adopt a specific leadership style in accordance with their business activity and employee profiles. So what do you do when two completely different industries join forces and become one – Financial Technology (FinTech)?
In the banking industry, where work involves so many procedural/legal/ethical risks, it is very common, yet appropriate to a certain extent, to adopt what Max Weber coined as a bureaucratic leadership style – working “by the book”. Bureaucratic leaders create and are strongly committed to procedures and processes to achieve organizational goals. The specific issue with relying on policies is that sometimes it may take precedence over people.
In the information technology industry, the laissez-faire leadership style is definitely the way to go, given the fast-paced environment. Tech employees tend to often sail on very wavy and unclear waters with priorities, projects and tasks constantly shifting. A common trait of the laissez-faire leadership style is the complete grant of freedom to employees, leading to confusing and overlapping accountabilities. While we recognize its benefits in terms of ownership and personal development, we cannot ignore the elephant in the room that often causes gaps between expectations and performance.
Given the above, it is safe to say that one of the challenges in FinTech is finding the balance between these two leadership styles. So how can you make cross-functional teams work? How can you demand clear rules and regulations in an environment of frequent ambiguity and change?
Both leadership styles are essentially task-oriented leadership behaviours handled in mutually exclusive ways. While focusing on the task is necessary for good business management, it may not be sufficient for good leadership, where focusing on people and contextual performance becomes critical. I've been reading this insightful 2006 research paper which clearly shows that, while both task- and people-oriented leadership behaviors are important, the latter predicted even better team effectiveness and productivity - indubitably a very task-oriented outcome.
Building upon this people-oriented leadership behaviour - found to be essential, irrespective of industry and business - it could be that its characteristics, such as empathy and emotional intelligence, are the answer for mediating cross-functional struggles and the clash of leadership styles in FinTech.
Empathy is what enables leaders to deeply understand what their team, as well as other teams, are feeling business-wise. Understanding others’ work behaviour and flow, while communicating with emotional intelligence, is the foundation of building trust and rapport. Someone smarter (or maybe just more popular) than me once said that a successful leader’s most valued currency is #trust – and I, personally, strongly reinforce that.
In the absence of manifested empathy and emotional intelligence, leaders can easily be perceived as inconsiderate and professionally undermining - my way or the highway. This can be quite problematic when it comes to cross-functional teams that cannot avoid cooperation in the development of projects and products.
Clearly, leaders and employees of such diverse organizational backgrounds see the business in different ways, but the possible conflict has less to do with perspective differences than it does with miscommunication and misunderstanding, fuelled by the desire for clout and self-assurance.
In order to build and lead cross-functional teams that will propel a product/business to ever-increasing levels of success, all parties (both leaders and employees) should take a moment and empathetically acknowledge all of these dissimilarities. Focus less on what’s wrong and more on what could be right if they CC – communicate & cooperate.
Once all parties enable themselves to see and understand the big picture, do not be afraid to get together and brainstorm divergent ideas in a quest for creating – what could eventually be, in terms of both problem solving and product/business development, the next big thing!