What do global CEOs reckon is their toughest challenge? Dealing with complexity and breaking away from the traditional “managing change” response. And they surprise further by saying (in a recent global CEO research report) that more than visionary thinking or operational excellence, they need to bring creative leadership to the organization to steer it through a volatile environment.  While a large majority of the CEOs expecting complexity to rise over the next five years, barely half believe they were ready for it. That doesn’t sound very significant until you find that the organizations from the “well prepared” camp noticeably outperformed the rest in the years running up to the crisis. As well as during it. And were headed by more creative leaders.

What do creative leaders do differently to deserve this success? One, they are fearless about challenging a perfectly acceptable status quo in their quest for fresh and disruptive ideas. Two, they are not paralyzed by uncertainty; neither do they shy away from the risk of quick, calculated decisions. Three, they’re willing to experiment, innovate and do the new. And in the process, they prepare their organizations to successfully withstand the rising complexity of day-to-day business.

I like this theory. And it makes me wonder how creatively banks, the most complex but conservative of organizations, will deal with this challenge. For instance, will they simply labor under the burden of complex regulation or, having done the hard work, creatively position compliance as their competitive differentiator? Will they take on increasingly complex competition head on by adopting new models of business, or allow those snapping at their heels a bigger bite? And how will they react, say 20 years hence, when technology and disruptive innovation will enable newer ways of banking that make banking institutions, in their current form, redundant?

I don’t see how such challenges can be addressed with conventional solutions. Banks need to innovate their thinking to discover new ways of engagement, new sources of revenue, new avenues of efficiency, and a whole new way of staying relevant to their customers.

Recently the CEO of an aviation company said that he didn’t fear complexity, but rather, was motivated by it. How many of us….bankers and their partner…would make a similar claim?