Banks can survive crunch with training and strong leadership, says management expert

It is "no coincidence" the banks that have thus far survived the credit crunch are known for investing in management training and ongoing staff development, it has been claimed.

Lloyds TSB and HSBC are singled out by Cass Business School chief executive Colin Carnall in his analysis of performance management and its impact during times of economic instability.

Writing in the Financial Times, Mr Carnall acknowledges that many assume investments such as training should be cut during a financial crisis, when the opposite has proven to be true.

During the economic downturn between 1992 and 1994, he notes, a large proportion of leaders increased their spending.

"They recognised that their sectors would change, which in turn would lead to the need to deploy new business models and more capable staff," he explains.

A prerequisite for such recognition is sound leadership, Mr Carnell continues, with people managers required to analyse, understand and "describe the evolving risk profile" with communication skills that have the necessary impact on a company.

"Knowledge without impact" is of no use, he concludes.

Colin Carnall was previously professor of strategic management at Warwick Business School.