Leadership perspectives: A conversation with Mike Kuehnel, CEO at Flow Traders

Hi everyone, I'm Elisabetta Bartoloni. I'm a partner here at Heidrick in our New York office and I'm leading our global markets practice. I have the pleasure today to be with Mike Kuehnel, who has been a Flow Traders for the last 4 years and I have been the acting CEO for the last, we say 2.5 years, right? I'm very excited because with Mike we'll talk about a variety of topics including market growth and how to accelerate a company's growth. We'll talk about talent and what is important today in skill sets and what is required to be successful. We'll also talk about hiring processes and last but not least we'll talk about leadership. What does it take to be an effective leader in a market like this one? So Mike, thank you so much for being here. Thanks a lot for having me, Elisabetta. So Mike, I have a first question for you. We're gonna talk about market dynamics and accelerating growth in your role and as an executive, you have a lot of experience having really led an organization front to back. And in a market like this where we see a lot of changes from a macro perspective regarding regulatory pressures clearly, and, you know, rates cuts, no cuts. I can pile up a lot of different things here. What do you think are really the challenges for organizations to really keep that accelerated growth? Yeah, thank you so much, Elisabetta. I feel this is a very fair question and probably also a big nut to crack for many business executives. They really have to break it down, how to get this right, and I think we all agree uncertainty is tricky and hard to manage and. Things are changing on a nearly day to day basis. I very much believe in having a true future perspective on your business, and what that means is that you define your beach, an understanding on where the firm ideally should land, a full potential version of where the firm wants to go in 5 to 7 or 8 years, and then define the most effective path into that, and I feel. One element of getting this right is also having a clear understanding of what the, let's say, most relevant macro trends are you're facing and I'm not talking about innovation coming and going. I'm really talking about fundamental trends in markets, in client behavior, in regulatory landscapes, so to understand what matters the most for you from that environmental perspective even, and then bring it into a forward-looking execution plan. And I feel this is quite relevant. You might have heard people saying the right to play, the right to win. I think it really boils down to defining for your organization what the key success factors are. You want to be very diligent about over the next few years when it comes to your strategy setting and execution. Yeah, it's interesting you bring up execution, you bring up the right to win, which I think is very well said. So let's talk about then, when it comes to me to mind is leadership, right? What are the leadership principles that you feel are must-have in this market and maybe the ones that you have kept, developed, and some that you might have said these are obsolete. There are not any more what I should focus on, so I love to hear your thoughts. Yeah, so I'm not probably able to really. all the bits and pieces, but if I try to make up my mind what the three ingredients are that probably matter the most, I think the first is, before you even start about leadership behavior is to define your purpose, your mission as a company, because I truly feel that this sets the foundation for creating really genuine excitement across the workforce and bringing the very best out of everyone around the organization. So that's the first point. The second point is then acknowledging that there is complexity and many different ways of getting it right. I truly believe in empowerment and, uh, probably fair to say the opposite of micromanagement. But empowerment comes with a few very integral consequences, and one consequence of maybe prerequisite even is mentoring and making sure that you really are close to your direct reports, for instance, and making sure that you understand where they stand in their career development and how you can empower them on the day-to-day basis, but also strategically with the perspective on their career progression over the next few years. And the last piece I would like to add, I think we might all agree instantaneously that you need to break the silos. So if you really deliver a multi-year mission as a company, I think creating an equal level playing field across the organization, understanding that all the different departments are equally relevant and equally equipped to succeed, but making sure that it's a holistic effort. It's fully integrated and people do speak with each other. There are no natural boundaries and getting that into a very forward-looking mission and exciting about the purpose you would like to lean into with the perspective of where the company wants to land in 5+ years. I feel this is probably the very best of what leadership can deliver. Fabulous. I think that's, that's, you know, you addressed a lot of beats on my, uh, on my question, so I really loved it. Um, be back a little bit on, uh, on what you said about inclusivity, right, and working all together and the ability to rally the troops, I would say. Let's take it from a different perspective. We are talking a lot about automation in AI. How is this affecting all of what we just said and how is this affecting people's skill set that they must have in these times to be able to perform at the top and accelerate the business. That's a very fair question. I give you one perspective which intrigued me the most by now. I think there is a difference between execution and redefining execution. So if you are operating within the context of machine learning and AI and you understand that there is a true potential for end automation. I think what really needs to happen to remain competitive is to think much, much bigger. So again breaking the silo and, uh, understanding that the entire technological evolution we have seen over the last few years and the exponential rise in computational power. And the increased availability of data, all these pieces ideally should come together to a highly creative process to think bigger in the sense that you are even challenging the obstacles you might face as a fully automated organization because then it breaks down to a decision effectiveness, decision quality, and it might even tap into creating more agility across the organization because you're not automating as a static animal or a static organization, it's constantly shifting and changing and how do you make sure, and it really starts again with leadership and mindsets and culture as a foundation to embrace the fact that whatever we do today needs to change anyway and how do you make sure that you use these technological advancements in order to be, uh, on top of the curve constantly and I feel the creation of creative power. And drive into innovation without any boundaries is probably one of the key aspects. That make an organization really competitive on a sustainable basis. Interesting. So you talked about breaking silos. You talk about processes. Let's talk about hiring processes at a firm. I would love to hear from you what works and what doesn't and what do you feel when you are building teams and hiring people from external from, you know, from the market, um, what gets in the way in a process and versus when you feel it is really going smoothly and probably what is the best practice. Um, well, I wouldn't claim that I can give you the best practice because we are constantly improving, but I feel it's a three step logic I believe in. The first is coming back to strategy, really understanding what are the key components of effectively delivering into that strategy, and this comes with strengths you can leverage across the organization. It also comes with development areas, opportunities, maybe even weaknesses across the organization. So this brings you then in a second step to understanding the strengths of the existing workforce, so I very much believe in driving growth organically because you're cultivating your capabilities and you're making sure that the dependencies across the organization are being improved as you go, but as you do, the first and the second step, you understand that there are ways of accelerating your strategy. By addressing these development opportunities and then I very much believe as well in bringing in on a very selective basis key talent that is not just addressing that development opportunity in isolation that helps to, I would even say inspire the rest of the organization and create, well, for lack of a better term, a one team experience so that this is not about, you know, the outsider joining the firm, it becomes one team. But it goes back, how do you create an integrated fashion out of this and make sure that everybody's embracing the growth of the team with internal and external talent. I think it really goes back to understanding what is really needed at the foundation to deliver into that strategy and keep the excitement about delivering and then I feel, and we shared that before, acceleration is key. I think you heard this sentence, culture eats strategy for breakfast. There's also maybe a second derivative to that saying. You can have the best strategy on paper. If you're not beautifully executing it. You will fall behind, and by now, having been in my seat in a global market-making business, I feel high-quality and accelerated execution is the key to success. Yeah, I couldn't agree more. I mean, excellent execution really is, it's a fundamental these days, where you can't get away without it. And I do think that having a very strong internal culture is what also makes my job easier when I go and recruit. You know, people for organizations like yours because they get integrated better, faster, and they can get more, you know, successful. Uh, and continue to grow the business and accelerate it. So I, I'm a big proponent of having internal cultures that are very clear, and really, um, are supportive of everybody, are inclusive and so on. So we can talk about a lot about inclusivity, but I think it's very key these days. There's one challenge we, uh, we face, I personally face. Is trying to bring out, bring out the highest level of openness, and this holds true both for the existing workforce, the existing talent and new talent, because without openness, maybe even curiosity and this feeling of being intrigued by learning from others, uh, it won't work, and I think careers have massively shifted. I remember my father telling me you find a job, you keep you know, that job for the rest of your lifetime, and now we understand that, well, you learn, honed capabilities, you realize that these capabilities in part become outdated. So how do you take the next step? And this notion of constant learning and doing that in a very, let's say, high-performance environment feels a bit like going to the fitness center every single day, right, to make sure that you keep your focus on point and also understand how you want to further develop; and then when it comes to, let's say, mediocre performance, top performance, high performance, I feel one point we haven't touched upon is passion. I feel, and you can look into sports, how people are actually able to deliver a 20 year-plus career in the top performing sports, and I think it really breaks down to combining the purpose, what you really want to leave behind, which is bigger than just generating economic profit for a firm. And transforming that into personal passion and that passion then goes into a concept I very much believe in, positive psychology. Yeah, so you're inspiring internally, you're inspiring in a way that you inspire people to be inspirational, and you do that to the outside, to your customers and clients, and the way you engage and I feel that sets the tone. Yeah, absolutely, and I think another piece that I feel we should talk about is innovation and having that environment that has cultivated trust and has embraced trust so that your employees can come up with innovative ideas. Not all of them will be phenomenal and will be right, but everybody will have the ability to speak up, and I think these days it is very important. I think this is mission critical and it's also not easy to get because probably in our subconscious minds we want to stick to patterns we have seen that worked and still work, and maybe it's fair to also differentiate between the day to day innovations of what the Japanese call kaiten and the groundbreaking game changer like innovation pieces and I come back to um. Focus and internal alignment because I truly believe that true innovation comes out of every part of the organization, so it's not the strategy team, the business development team, the local C-level in the region. I think it really needs to come together and what is needed, and I see that in a day to day way is constant challenging and this, as you said, goes only with trust because you also need to bring it to a point where you might. Agreed that some premises you followed over the last few years were wrong, or maybe not a fair reflection of reality, and then bringing that back to the table to ID8 together as a team to then make very concrete choices, but then goes to being courageous, taking the risk, and this is one key piece. If you want to drive a very ambitious agenda, you always need to have a proper balance between risk and return, but trying to avoid risk is counterintuitive, so you need to bring it to the most optimal level of risk acceptance for your company in order to increase the likelihood of success for the strategic bets you're putting out there. And I'm coming back to the first minute of our discussion, uncertainty. So what really changed over the last decade, maybe for the last 20 years even, is that the level of uncertainty massively increased. The world has become much more interdependent. There's massive globalization. There's more regulation. There are technology-induced shifts in customer and client demands, so a lot is happening at the same time. And one strategic opportunity to capture that is to place strategic bets out there that are highly synergetic to each other but also give you, as a workforce, and then individually, as an employee, as a leader, an opportunity to really play the very best of your creative thought process and put that into a transformative road map for the years ahead. And I think this is the inspirational piece and probably fair to say that this then goes much further than just having a great career in a classical sense. It's basically self-rewarding. It's pushing you to your limits. It's creating constant growth across yourself and the workforce, and probably, if you translate that into a continued sustainable business success, that is the key ingredient of making companies great. Yeah, well, I feel extremely inspired by this about this conversation and what we just shared. So Mike, thank you so much for all your insights. I am very excited to continue the conversation with you, even, you know, off the stage here. And I wanted to thank everybody for tuning in and, we want to hear your thoughts and your questions and, we look forward to seeing you next time.