Looking for Higher ROA? Talent Is the Key
February 24, 2021
3 minute read – An organization that actively creates the right talent is an organization that can leverage their deep thinking, creativity, and flexibility to create a competitive advantage and deliver on the value proposition – all of which leads to higher ROA.
Successful business executives have written volumes about the importance of having and developing the right talent for business success, including financial success. Intuitively, you know this is true for your business, too, but it can feel fuzzy when connecting the dots between talent and profitability.
Our writings on leadership competencies focus on 7 key competencies. While all 7 are critically important for high performing organizations, consider the following 3 and how they are directly connected to profitability.
Proficient at Identifying and Creating an Evolving and Sustainable Business Model
Visualizing and articulating the long-term view is necessary, regardless of how fast things are changing. The speed of advancements, complexities, and interdependencies require decision-makers to be much more forward-thinking to remain truly relevant. How exactly does this competency help profitability? Picture a Vice President of Mortgage who gets the daily details right and also consistently thinks about how consumer needs and wants are changing and how the lending area can better serve tomorrow’s consumers to bring more loans in the door. Imagine the leader in charge of payments who is proactively considering what the payments strategy should be for the organization and how it can contribute to profitability, even as the payments landscape changes daily. These leaders help the organization evolve for continued success, cultivating a strong bottom line today and into the future. Compare this to leaders who are only focused on the day-to-day and keeping their areas running at status quo.
Masters of the “So What” of the Numbers and Data to Strategically Drive the Institution Forward, So Much So That Business Intelligence Is Actively Used, Often in Real Time
Being a master of the “so what” begins with asking the right questions to help understand how to drive the business forward. This strategic executive is not simply a master of the data and the numbers, but is also able to distill them into easily understandable decision information and effectively communicate their meaning throughout the organization. Consider the head of marketing who is constantly evaluating data to determine whether the target market is finding the institution’s offerings relevant and why, then using that decision information to adjust not only marketing, but also to propose product changes and even suggest changes in strategic direction. Using data to hit the nail on the head with the target market leads directly to more revenue. Picture the operations executive who uses business intelligence to ensure that employees are delivering the value proposition with every interaction, and drills down to ferret out and eliminate roadblocks. Fewer roadblocks lead to delighted customers who truly feel the value proposition and bring more business. These strategic executives are able to see the forest, the trees, the bark, and the roots. They contribute to ROA with their ability to effectively use business intelligence to execute on the business model.
Adept at Choosing, Developing, and Engaging Talent That Supports the Desired Business Model, Positions the Credit Union for the Future, and Allows Appropriate Time to Think and Act Strategically
One of the greatest keys to success is that strategic executives surround themselves with talent they know will get the details right, so that their minds can be cleared to consistently think strategically about the business. Having this competency makes it possible to focus on the previous two. Without this competency, the benefits of the others cannot be realized. An organization where talent actively creates more talent is an organization with collectively more strategic thinking, fresh ideas, and bench strength.
Every organization needs executives who are creating and taking the time to think strategically about where the business should be going in the future. Talent that can rise above the day-to-day to think about, ask about, and act on the right things is the most direct route to sustained profitability.
Be sure to read more about the 7 Key Competencies of Strategic C-Suite Teams and Growing Talent to Fuel Your Business