Positioning for Change: With People, Culture and Management: The Focus of Banks to Grow Their Businesses in Today's Increasingly Complex and Uncertain External Environment Has Brought Some Major Changes and Rethinking about How to Manage People and Transform the Internal Culture. (on the Cutting Edge)
O'Connell, Bryan, Journal of Banking and Financial Services
Already the industry has gone through much change and transformation over the last ten years, affecting people, culture and management in this process. Many jobs have been lost, but have been replaced with new people with different skills and ways of thinking.
Driving cultural change
It is important to recognise what has driven this change. In many ways, the internal management and culture in banks is a response to the pressures of change that come from the external environment, as well as the banks' own strategic initiatives.
As a result, the industry has transformed to such an extent that it is absolutely critical that fundamental adjustments are made to align how management handles people, its most precious resource.
There are many external forces applying pressure to staff. Time scales, for instance, have been reduced to internet time in which everyone demands immediate answers. There's plenty of information from many new sources, but it's often a quandary as to what is valuable and should be read.
Because customer expectations--and their power to get what they want--keep rising, there is constant pressure to be more customer focused. Existing and new competition threaten many segments of a bank's business and the forces of globalisation just keep rolling on, constantly affecting a wide gamut of retail, business and corporate financial markets.
Change is constant and a very permanent part of the landscape. There is greater volatility in financial markets and a much greater degree of operational risk.
Security has also become a major concern and there is more confusion about how to create value from technology. We need to be prepared for the unknown more than at any other time.
As a result, the internal culture and management of banks has lagged in terms of keeping pace with the changes and complexities faced. Unless the issue is successfully addressed, it has the potential to impede growth.
What the banks are doing
Productive culture is what is being aimed for and is the key to further successful growth strategies. Part of this is focused on looking across the business of the bank and setting targets that stretch individuals, increase performance and motivate people.
Many banks today talk about unleashing the energy of individuals and encouraging them to work at their best.
Some banks are driving this very hard.
The cultural focus at the ANZ Bank has shifted to driving more accountability, achievement, customer focus and general continuous improvement whilst maintaining cost reductions and shareholder value. Importantly what's `out' is bureaucracy, hierarchy, command and control and short-term focus.
The National Australia Bank is also addressing similar issues. According to the bank's executive general manager for people and culture, Peter McKinnon, the bank is focusing on innovation--diversity, creating a difference, new ideas and new perspectives.
`This involves bringing in executives and others with different backgrounds and experiences,' he says.
Banks are also measuring, using and publicising staff satisfaction rates. The well accepted view is the greater the satisfaction, the greater the productivity and performance which will result in turn in greater customer satisfaction and also execution of the strategy.
Leadership and management
A major precondition to achieving this transformation of culture revolves around having new forms of leadership and management. …