But not all finance organizations are Lehman Brothers or Bear Stearns — in fact, most of them aren’t. The most pure markets in finance are incredibly sophisticated and arguably result in the most level playing fields of any industry. This is largely due to the fact that legislation forces transparency, so the sector must be vigilant about plugging holes and rooting out corruption.

[CAVIE/ACCI] The financial industry often gets a bad rap, thanks in part to world-shattering events like the 2008 recession. It’s tough for an industry to appear on the up-and-up when a few legacy companies upend the global financial system.

But not all finance organizations are Lehman Brothers or Bear Stearns — in fact, most of them aren’t. The most pure markets in finance are incredibly sophisticated and arguably result in the most level playing fields of any industry. This is largely due to the fact that legislation forces transparency, so the sector must be vigilant about plugging holes and rooting out corruption.

Leaders in other fields can learn a great deal from studying leading finance companies. Unlike tech companies, which maintain relatively friendly relationships with competitors, finance is a dog-eat-dog world. Finance companies refuse to permit bloat and inefficiencies because they can’t afford such distractions when billion-dollar decisions are on the line.

Finance’s Finer Points

Not all business leaders desire a house in the Hamptons and a private yacht, nor do they thrive on the fast-paced, 24/7 work ethic that finance demands. But founders and executives of all stripes could stand to cultivate some of finance leaders’ most effective qualities.
Here’s what distinguishes the leaders — and winners — in this industry:

They take management seriously

Major finance corporations conduct extensive management trainings that yield standardized processes and well-trained leaders. Executives in the tech industry would benefit from more intensive training, for ourselves and our staff members, before diving into or doling out management positions.

They recruit talent aggressively

Finance companies know how to entice the brightest analytical minds, and they hook them before they’ve even started their careers. Much like talent scouts pursue college athletes for the big leagues, top finance organizations operate strong recruitment programs. They visit the best universities in the country, promoting their grade-A internship opportunities to promising would-be investors.

They’re data-driven

Finance professionals rely on high-level, high-quality data information to stay on their competitors’ trails. Minute alpha advantages make the difference in billions of dollars in profit, which is why you see finance companies using predictive tools that are years ahead of those in any other industry.

Finance is a zero-sum game

Professionals in this field either win big or lose big, and they’re keenly aware of what’s at stake. That mindset creates a hyper-focused approach to delivering results.

How to Emulate the Finance Industry’s Success

By adapting finance leaders’ most valuable traits, tech executives and other business heads can run better, more effective organizations. Here’s how:

1. Regulate everything

Finance people are unbelievably disciplined. They’re up with the markets, and they’re mechanically focused on their priorities from the opening bell until their last trades of the day.

Of course, that level of discipline can come with a price. Finance workers are often more stressed than workers in other fields. Focus on your most important tasks each day so you can maintain work-life balance without feeling as though you’re making sacrifices on either front.

2. Emphasize data

Every decision within the finance industry relies heavily on data, and finance professionals are always hungry for more and better information. If you’ve read the book or seen the movie “The Big Short,” you have a sense of how important it is for these people to dig into every detail.
Interestingly enough, tech and finance will likely converge on this issue within the next decade. The Internet of Things’ greatest value rests on data transfer, an integral part of financial functions. Tech companies that hope to capture financial corporations’ business will need to utilize cutting-edge data technologies.

3. Shake off your losses

Everyone who works in finance loses sometimes. It’s the way the industry works: You win some, you lose some, in the most literal sense. But then they hop back on the saddle and keep riding forward.

Cultivate a similar attitude in your organization. Encourage calculated risks, and be prepared to bounce back when a new strategy doesn’t pan out. Learn from it so you can make better choices in the future.

4. Understand your competition

Finance organizations know everything there is to know about their competitors: who they are, what they’re doing, and where they’re headed. They look at a wide array of data points, including market cap, customers, upside, leadership team, earnings statements, predictions, historical information, industry trends, global trends and more. They use that data to model how these factors could impact their own performances and plot their next moves from there.

Be rigorous in your own competitive analyses. Even if you enjoy a friendly personal relationship with your peers, separate those feelings from the business. Keep tabs on what they’re doing and regularly revise your own strategies to stay a step ahead.

5. Implement management training

Tech leaders often take a “give it a try” approach to management, in contrast with the structured, uniform training held in finance companies. Instead of letting managers learn on the fly, provide them with tools, resources and tactics that will help them succeed. Managers are responsible for handling a range of complex problems, so it’d be a mistake to assume they can intuit the best solutions.
On average, most small businesses spend only six to 12 minutes on manager training during a six-month period, which is shockingly little time to train people in these important roles.

Businesses such as Google, on the other hand, recognize the importance of talent development. Marissa Mayer instituted Google’s associate manager program when she was still with the company, and the initiative has cranked out individuals who have become leaders at Google and other major tech companies. Management training matters, no matter the size of your company.

6. Recruit early

The finance industry is really good at building a pipeline of talent. Tech companies, meanwhile, are always vying to recruit the nation’s best, and when they do, they struggle to keep them. Target your recruiting efforts at universities and programs you trust, and work with them to build a solid and reliable pipeline.

Once you’ve recruited and on-boarded top talent, give them incentives to stay. Professional development programs and support for continuing education signal that you’re serious about helping your best people grow, while performance bonuses and other perks show that you’re paying attention when they do well.

Depending on whom you talk to, the financial industry is either revered or reviled. But there’s no argument that the best finance companies are extremely successful and that they have much to teach leaders in other fields. Tech executives in particular should take a page from top financiers on how to build efficient, competitive and successful companies.

Jim Fowler