Significance of Leadership - Essay Example

Leadership Leadership is a very important skill which is not possessed by all; hardly very few people are blessed with this skill. Being a leader is not easy; it poses many challenges and the person who overcomes these challenges make a successful leader. My experience will provide with a comprehensive understanding of the leadership qualities that I possess. I have a rich experience in which I’ve organized others to achieve, whether in an academic, community, or professional setting. However, I would like to highlight one experience that involved leading a group of so-called bad boys to make a real difference in the Bank of China. I was tapped to lead a six-person team plagued by complaints such as “I feel stifled by the bureaucracy,” “I am bored by the repetitive routines,” and “My boss has no sense of business.” Before taking on the responsibility, my mentor asked whether I had seriously considered what it meant to lead this infamous team. In my response, I quoted my former coach: “There’s no bad boy, only a bad coach.” I did not criticize the so called bad boys, many previous leaders had done the same mistake and I certainly did not want to follow in their footsteps. Another positive thing which I did was that I listened to them patiently and gave them a good chance to express themselves, all these above things worked in my favor and I ended up winning their hearts. I defined my role as the team’s backup. I wouldn’t lead; I planned to support. I shared my vision of turning the team members into real leaders who not only developed ideas, but also put them into action and delivered results. I invented the “changing seats” game, in which team members alternated sitting in my chair every Monday morning, initiating an activity for the whole team to execute that week. Later, I proposed setting up a Your-Voice forum, in which the team would exchange ideas about the latest international practices in trade finance as well as necessary reformations in workflow and business process. Motivated by the team’s enthusiasm, I convinced the executives to provide a small budget to support our lecture series involving professionals in insurance, shipping, and foreign exchange management policy. The lecture series was open to the entire organization, which helped rebuild the team’s image into a positive one. Gradually, I guided my bad boys to turn their innovative ideas into case studies and papers for top management’s reference. Some were quoted widely in the bank. One year later, two of my bad boys were promoted to team leaders in other offices, and the rest were recognized in the bank as innovators. They were no longer bad boys. The Capability of a leader is measured by the results, a leader is expected to defy all odds and achieve the goal and I certainly achieved my goal of transforming the so called Bad boys into matured leaders. This goes to show my ability as a leader. Could a commercial bank play the role of investment bank? Although some peers perceived international trade finance as low-end commercial banking, preferring high-end investment banking instead, I established my roots in this area with love and repositioned my career with passion. In 2007, I approached a potential customer who showed no enthusiasm for my credit letter-based international trade finance solution, looking instead to investment banks, which were raising capital through private equity and then getting IPOs overseas. This challenge stimulated my comparison of investment banking and commercial banking. Commercial banks are more conservative, issuing loans based on customers’ current financial situations; meanwhile, investment banks are more aggressive and value future cash flow. Therefore, China’s high-growth companies are more enthusiastic about investment banking as the valuation on their future cash flow gives them more potential in fundraising through investment banking. Thus, I proposed breaking through the traditional philosophies and learning from the investment banking mentality. I was authorized to experiment provided that I could invent methodologies to control the risk arising with the change from valuing current cash flow to future cash flow. My deep analysis of the customer found that its business model of purchasing a large variety of products from small Chinese manufacturers and selling them to Wal-Mart included two key points. First, Wal-Mart pays the customer, meaning future cash flow is reliable. If our bank could control the risk of the products shipping to Wal-Mart, we would have limited risk in lending more money to the customer based on the forecasted cash flow. This enabled us—a commercial bank—to play the role of an investment bank. Second, the customer’s suppliers are usually much smaller and their ability to raise competitive financing on their own is limited. Thus, we could extend our financing to the suppliers, thereby doing much more than investment banks. Based on my analysis, I developed a breakthrough business model, stepping from the conventional finance to supply chain finance. During the subprime mortgage crisis, the investment banks fell into serious recession, closing the door to my customer. I approached them again and impressed them with a presentation on their real needs and how commercial banks could satisfy these needs. The impact of my supply chain finance solution would be no less far-reaching than the future IPO as it enabled them to break the bottleneck of capital in their high-growth, calculating their future cash into the credit. This company became our first customer of supply chain finance. Later, I sold the innovative solutions to more companies in similar high-growth dilemmas suffering from the downturn in investment banking. The innovation greatly impacted my company. First, we demonstrated that commercial banks can be more aggressive than investment banks in serving clients. Second, my innovation inspired peers frustrated in their commercial banking careers to reexamine their career choices, leading to a booming culture of innovation that I used to reposition us as an indispensable financial center and a strategic partner for the customers as well as their suppliers and buyers. There was a lot of risk involved in whatever I did and I certainly did not shy away from taking that risk because I depended on my innovative skills. At the end of the day I succeeded in proving my point. Conventional wisdom says the big fish eats smaller ones. My employer, Bank of China, is such a big fish. However, I envisioned a new marketing trend: the fast fish eats the slower ones. Convinced that the Bank of China could be both big and fast, I started developing prototypes of financial products addressing the potential value increase of RMB back to 2006. When the People’s Bank of China announced that RMB would be allowed to fluctuate freely, I had the acumen to realize that export-oriented Chinese enterprises would suffer bitterly from the RMB-USD rate change. They would need financial products for risk hedging and appreciation-proofing. I successfully convinced executives to create a budget, with which I built a multi-functional team to develop prototypes of such appreciation-proof financial products. We comprehensively researched and designed a variety of financial products that combined derivatives and international trade finance. The results were technically advanced and won high praise from gurus in the Beijing headquarters of the Bank of China. Unfortunately, we encountered a serious setback: our financial products met indifference in the markets despite their technical strength. Complaints arose, and the team budget was set to be slashed. Team members’ spirits plummeted. The initial passion to make a real difference disappeared. Frustrated as well, I still clearly understood my role as leader. If I gave up, the team failed, the project failed, and the reformation of “the fast fish eats the slower ones” failed. Everyone’s efforts and the allocated budgets would have been in vain. I led my team to analyze the reason behind the setback. In a word, we were too fast. Running ahead of the market, we quickly put the products into sales. However, the RMB appreciation was very slow and Chinese export enterprises were not aware of the risk hedging. We spent too much time on product development and inadequate time training sales teams to sell the products. I produced a market analysis report to the executives and persuaded them to give me more time. Meanwhile, I encouraged my team members to persist—or rather, endure. This period helped me understand why one’s greatest enemy is oneself. I often doubted my abilities, wondering whether I was being overly aggressive. I quelled my negative thinking, and my patience paid off as the RMB-USD exchange leapt from 1:7.2 to 1:6.81 in only half a year. Meanwhile, global manufacturing began reshuffling. Export enterprises, which had previously been indifferent to our products, crowded into the Bank of China to consult on our risk hedging products. As the Bank of China was the earliest driver of this market in Shanghai and had a scale advantage as well, we quickly dominated the new high-profit margin market. Our efforts built on the double-edged philosophy that the big fish eats the small and the fast eats the slow was highly commended by top executives. There are two important things which I learned from this experience, no1 is that a leader sets high standards for the subordinates, it is set by the performance of a leader and another important thing which I learned from this is that the character of a leader is determined in adversity and every adversity brings opportunity with it. Read More