Mary Schapiro and Leadership Essay

In her role at the instant, Mary Schapiro was known as unmatchable of the worlds most powerful female regulators. She was named tame in the midst of the worst monetary crisis since the Great Depression. As chairman, she serveed chant and revitalize the agency by e genuinelyplaceseeing a more(prenominal) rigorous en repelment course of instruction and shaping revolutionary rules for W each Street. During her tenure, the agencys manoeuver potency brought about a immortalize number of en lungement attains and achieved portentous regulatory meliorate to protect investors. Schapiro leaves behind an agency that has regained its footing, stature, and morale following desultory lead under its previous two chairmen and its embarrassing lack of action precedent the financial crisis. Under Schapiro, the dry, which is usually thought to be the most large(p) and outstanding financial regulatory body in the country, brought a broad number of enforcement actions against financ ial institutions. Her job was to assess what went impairment and to crack it didnt happen again. During four geezerhood as mo chairman, Schapiro presided over one of the busiest rule-making agendas in the second bases history, during which the agency as well brought a record number of enforcement actions, and executed a comprehensive restructuring program to improve protections for investors. Upon her departure, electric chair Obama praised her leading, saying the second base became stronger and the financial system safer and better able to inspection and repair the American hoi polloi-thanks in large part to Schapiros hard work. diverseness Management alter administerment is designed to ensure the efficient pitch contour of an organisation and its population from the current to future states, and in so doing endorse the trulyisation of business benefits. In the context of strategy, it is the realisation of the strategic send off. Change management is about in ef fect leading and managing individuals, teams, and the organisation to successfully read the transforms needed to achieve required or desired business results. achievement in Organisational Change Follows Recognisable Patterns Kotters 8 StepsHarvard trade School Professor John Kotter is well known for identifying a mold for leading successful validational budge. Yet, we can non be sure that the President, members of Congress, and get word federal official Reserve, Departmentof the Treasury, and due south military group (including chair Schapiro) are known with this work and with separate similar guidance from change attractorship literature. And even if near or all of the change agents impacting a restructuring of the siemens are familiar with this work, it is unclear whether any of those change agents are consciously using this teaching and incorporating useful elements from Kotters books into the SEC re shaping process. Studies of organisational change suck shed significant light on the elements of a successful enlighten effort. Leaders effectuating reform at the SEC do not ca-ca to reinvent the wheel as they initiate, manage, and institutionalize establishmental change. Kotters seat is organized into eight stages designed to address eight observed mistakes do in efforts for organizational change establishing a sense of urgency creating the manoeuver coalition developing a hatful and strategy communicating the change passel empowering broad-based action generating fiddling-term wins consolidating gains and producing more change and anchoring reinvigorated approaches in the gardening.Each stage has identifiable characteristics.1. Establishing a Sense of Urgency distinct crises can be enormously helpful in catching peoples attention and pushing up urgency levels. To be sure, the SEC has experienced visible crises over the past few years. Admissions of significant bankruptcys at the SEC extend back over more than two years time and cover multiple areas of SEC trading operations. The natural superiority of the U.S. molding for securities decree is no longer an article of faith, and the credibility of the SEC as a financial regulator has never been lower. although the SEC has long been the superlative jewel of the financial regulatory infrastructure, recent developments have called that characterization into question. The SEC has been the target of relentless criticism ranging from claims that it mishandled derivatives regulation, oversight of securities firms, and market risk, to assertions of delays and blunders and possible industriousness capture at the Division of Enforcement. These criticisms followed the Treasury Departments invention of Financial Regulation-released in March 2008-that criticized the SECs approach to regulation as obsolete and proposed a plan of regulatory consolidation that would effectively lead to the agencysdemise. Most recently, the revelation that the SEC failed to run across a $50 billion Ponzi scheme at Madoff Investment Securities, notwithstanding having received allegations of wrongdoing for over a decade, suggests fundamental weaknesses in its hollow out enforcement operations.To be successful at organizational change, however, a change leader must use the crisis to shake up the organization. This requires that the change leader annul sources of self-satisfaction or minimize their impact and take actions that are salutary-down or even risky. Kotter uses the concept of fire in a construction as a proxy for crisis in an organization, writing that conducting business as usual is very difficult if the building seems to be on fire.Interestingly, hot seat Schapiro invoked fire imagery in comments to reporters as she made changes to SEC operations shortly afterward taking office. moreover, in a recent speech, chairperson Schapiro noted the rapid pace of change at the SEC over the preceding year I know that change is hard because at bottom our age ncy we have been booked in some of the most significant change in decades. When I arrived at the agency last January, we began a process of assessing our operations and moldd we could do better. We determined that we needed to change. And that is the wariness we have chosen. The personnel changes instituted at the SEC may be seen as examples of sweeping change. The discomfort and discontent of the SEC cater in rejoinder to the personnel changes may be separate of the brash nature of these personnel changes. Kotters work predicts this kind of reaction. He notes that bold moves that reduce self-satisfaction tend to increase conflict and to hit anxiety, at least at scratch line.2. Creating the Guiding CoalitionLeading change is not a anchorite task. Because major change is so difficult to accomplish, a powerful force is required to sustain the process. No one individual, not even a monarch-like CEO, is ever able to develop the right vision, communicate it to large poem of p eople, eliminate all the key obstacles, generate short-term wins, lead and manage dozens of change projects, and anchor new approaches deep in the organizations culture. Instead, what is required is a strong leading team-a team with the right composition and sufficient trust among members. In toll of composition,four key characteristics are important position power- the entire group who will be charged with making progress in areas of needed change, expertise, credibility, and leadershiphip. pull is borne of activities that create . . . mutual understanding, respect, and caring. Trust is important because it can lead to the effective creation of a common goal or shared objective. Chairman Schapiro has changed the leadership team at the SEC. We must question, however, whether the team has the right characteristics and the unavoidable trust. Certainly, the credentials of the SEC Commissioners are quite impressive in terms of expertise, credibility, and leadership skills. Chairma n Schapiro has put a premium on attracting to the SEC people with an expansive set of experiences and skills. Moreover, the published remarks of new leaders in the Division of Enforcement-people with position power-are impressive in their indication of a corporal change nervous impulse.New leaders continue to emerge, making the membership of the maneuver coalition unsettled and unclear. The executives who ignited the transformations from slap-up to great did not first figure out where to drive the bus and then get people to take it there. No, they first got the right people on the bus (and the wrong people off the bus) and then figured out where to drive it. In general, exoteric information sources are not detailed enough to enable a comprehensive assessment of the suitability of the composition of Chairman Schapiros manoeuvre coalition. For example, according to Kotter, you need both management and leadership skills on the guiding coalition, and they must work in tandem, team work style.He offers matrices that illustrate optimum compositions. Publicly available information does not enable us to determine whether or not the SEC guiding coalition has the optimal difference of management and leadership skills. Only as the exact identity of the leadership team emerges and the team takes concerted and coordinated action will we be able to evaluate its composition. As difficult as it is for us to treasure the teams composition, it is more difficult for us to assess whether the guiding coalition has the required trust. Although I have not found evidence that ostensible members of the SEC guiding coalition have engaged in team-building exercises or attended a retreat at which intra-group trust may have been engendered, the SECs recent self-assessment may be a sign that mutual trust is be promoted throughout the agency. As new people are identified for inclusion on thechange leadership team, they will need to be effectively brought into the circle of trust.3. Developing a visual sensation and StrategyTo achieve successful organizational change, a leader needs to have both vision and a strategy to fulfill that vision. Vision refers to a picture of the future with some implicit or explicit commentary on why people should strive to create that future. Vision serves to channel change in a particular direction and incentivizes and coordinates change in that direction. Chairman Schapiro seems to understand this aspect of change leadership, and she also seems to be incorporating it into the SECs operations. Her vision for a reformed SEC refocuses the SECs activities on one of the key policy underpinnings of the federal securities laws investor protection Another lesson I have learned is to have a vision about where you want to take your organization and stick to your principles in getting there. Principles are not ideologies. They are different. Maybe its a question of degree. Maybe to some its semantics. But as I see it, unlike ideologies, pr inciples dont seem to demand a particular answer to every problem that emerges.Weve seen how strict adherence to political theory played out over the last decade in the financial arena. Free market ideology together with rapidly changing technology, globalization and many other accidental causes led too many of us to forget hard-learned lessons from past crises and abandon basic common sense. Principles, on the other hand, help frame a question, an regaining or a problem. Having a principle might highlight tensions and trade-offs of particular choices, but rarely do they force you to choose between a good solution and a worldview. For me at the SEC, my main principle is putting investors first. And, I try to gentle focused on that every day. And the goal is to build an SEC that is late expert, nimble, and aggressive-that perpetrates investors confidence. In fact, as Bob Glauber can attest, I have a sign posted on my door that says How does it help investors? Its a simple questi on, but it guides all that I do at the SEC. And, all those who enter my office understand that is the prism through which we will consume all issues. It doesnt necessarily dictate the outcome of every issue that landson my desk-because there are many solutions to any problem that could abet investors. But, the principle helps to shape our thinking and steers us in the right path. Vision is implemented through strategy. Without vision, strategy making can be a much more contentious activity. Even more so, without good vision, a clever strategy or a logical plan can rarely inspire the kind of action needed to start major change. Chairman Schapiros vision has guided morphological and practicable change at the SEC as well as substantial rulemaking. Some credit her cl early(a) conceived vision and the associate rapidly engaged strategy for saving the SEC from more significant structural or operational change.4. Communicating the Change VisionAccording to Kotter, the larger the au ditory modality for the change vision, the more powerful it may be. A great vision can serve a useful purpose even if it is still by just a few key people. But the real power of a vision is unleashed only when most of those involved in an enterprise or activity have a common understanding of its goals and direction. That shared sense of a desirable future can help motivate and coordinate the kinds of actions that create transformations. A leader must be careful to communicate the change vision broadly, frequently (repeatedly), and consistently. The message conveying the vision must be direct, clear, simple, and geared to its targeted audiences. Metaphors, analogies, examples, and florid prose may be helpful in this regard. The means of conveying the message should be alter oral and written, large forum and small group, and through words and actions. Finally, to ensure understanding, the communion of the vision should be a two-way street, involving both give and take as well as c onveying and listening. Chairman Schapiro has engaged in significant public speaking in which she has regularly and repeatedly informed and reminded the SEC staff and various elements of the public about the SECs recommitment to investor protection and the linkage of that vision to structural and operational changes at the SEC. Chairman Schapiro regularly appeared before congressional committees and subcommittees, and she has communicated her vision in these arenas as well. She used memorable analogies, examples, and words to convey the SECs organizational change message. Evidencing an appreciation for two-way communication, soon afterher appointment, Chairman Schapiro took action in response to staff suggestions that enforcement efforts against corporate violators of the securities laws were too difficult. Moreover, the self-assessment process and colligate ongoing staff communications are evidence of two-way communication about the structural and operational changes that have bee n taking place at the SEC. And Chairman Schapiro has continued to express belief in capturing a change of viewpoints in decision-making.5. Empowering Employees for Broad-Based ActionTo implement the leaders vision, employees need to be able to take action. This may mean clearing away structural barriers, skill deficiencies, systemic obstacles, and supervisory impediments that may forestall effective employee date in change efforts. Many of the structural and operational reforms implemented by Chairman Schapiro appear to be designed to empower SEC staff members for action that carries forward the change vision of the SEC. The efforts of Chairman Schapiro to listen and move to staff concerns about unneeded enforcement hurdles are examples of initiatives to streamline structure. In addition, the restructuring of the Division of Enforcement is geared to clear structural barricades to effective enforcement efforts. The decision to withhold staff with non-traditional skills and the im plementation of new staff training are examples of efforts to indemnification skill deficits. Human resources and information systems have been or are being improved in response to deficiencies identified in the SECs self-assessment and the OIGs investigation, report, and recommendations. In the Division of Enforcement, supervisory positions are being eliminated, supervisory personnel are being replaced, supervisory responsibilities are being realigned, and supervisory attitudes that may have impeded investigations are being corrected.6. Generating Short-Term WinsBecause the organizational change process is slow and constituents can be impatient, it is important for a change leader to accomplish certain limited objectives in the short term. Major change takes time, sometimes lots of time. Zealous believers will frequently stay the course no matter what happens. Most of the rest of us expect to see convincing evidence that all the effortis paid off. Nonbelievers have even higher s tandards of proof. They want to see clear information indicating that the changes are working and that the change process isnt absorbing so many resources in the short term as to endanger the organization. To be effective in sustaining organizational change efforts, short-term wins must be both visible and unambiguous. They also must be clearly related to the change effort. And in an effective change effort, they are planned, not accidental. SEC Chairman Schapiro accomplished some highly publicized early wins after her appointment was confirmed. In particular, she swiftly moved to remove perceived barriers to enforcement of the securities laws against public companies. She publicly promoted these changes, and they were picked up by the news media. These efforts generated support in and impertinent the SEC. The achievement of these short-term wins on a staggered but consistent initiation has kept the SECs structural and operational reforms in presence of the SECs staff and the pu blic, building consensus around and pulse for the SECs self-initiated reform efforts and distracting attention from more substantial externally generated suggestions for change.7. Consolidating Gains and Producing More ChangeThe long-term time horizon for organizational change not only makes short-term wins advisable, but also may make early declarations of victory problematic. It is important that the sense of urgency created by the change leaders is sustain for the long haul. Short-term wins are essential to keep momentum going, but the celebration of the wins can be lethal if urgency is lost. With complacency up, the forces of tradition can sweep back in with remarkable force and speed. Although a rapid, consistent pace of change at the SEC was sustained over the first fifteen months of reform, Chairman Schapiro as well as other SEC change leaders, needed to maintain the change momentum by continuing to introduce reforms on a regular basis. Having done for(p) so far, the SEC co uld have lost all of the gains it had made in organizational change merely by relaxing into complacency. Until changed practices attain a new equilibrium and have been driven into the culture, they can be very fragile. To reach that equilibrium, in addition to engaging in more and dogging change, the SEC should bring in additional change agents, continue to advance leadership from its senior managers,recruit and nurture project management and leadership from lower ranks in the hierarchy, and identify and decrease or eliminate unnecessary internal structural and operational interconnections that often make change efforts more complex. These types of efforts in change management are difficult and pervasive.8. Anchoring New Approaches in the CultureFinally, to prevent regression, change leaders must address and suffice any incompatibilities between the changes that have been made and the organizations culture-friction in the groups system of behavioural norms and shared values. This is not as easy as it may sound. These norms and values may apply to the organization as a whole or only to certain split of the organization, and it is important to achieve compatibility on both levels. Moreover, culture is change-resistant and nearly invisible. Yet, the failure to address inconsistencies between a change effort and the prevailing culture can undo years of reform. Accordingly, it was important that Chairman Schapiro understood the applicable behavioural norms and shared values of the SEC and the Enforcement Division and their respective relevant cultural sub-groups as they continue to reform the SEC and the Enforcement Division. Because the core vision of investor protection should not be entirely inconsistent with the SECs culture (in whole or in pertinent part), these and other change leaders at the SEC should be able to graft the new practices onto the old roots while killing off the inconsistent pieces. The important thing will be for the SECs change leaders t o continue to remember the organizations heritage and link it to the organizations new and ongoing operations and objectives.