Culture flows from the top down
The importance of culture cannot be overstated. Senior leadership needs to define the culture and associated behaviors that best support the transformation vision. These will often involve an unfamiliar level of openness to collaboration, new ideas and experimentation and, as a consequence, new levels of risk-taking. It is also vital to instill a culture of accountability, whereby those charged with leading and delivering change take ownership of execution.
However, only around four in 10 executives agreed that their organizational culture had a sense of urgency about change and transformation. The same proportion agreed that their culture encouraged innovation and new thinking.* Incentives and performance management may need to be revised to encourage culturally aligned behaviors.
Moreover, the right cultural balance will only be achieved if it is demonstrated by executives at all times and baked into change management programs. Organizations that underperform when it comes to transformation highlighted limited support from the workforce as the main reason.
“However a bank is seeking to transform, a key determinant of success is the culture and willingness of executives and senior managers to take personal risk and practice courage,” says the Chief Strategy Officer at a major North American bank. “All too often, transformation initiatives are based on what teams know they can deliver, but this is limiting. It’s better to go with your gut and transform in a way that you think will have a big impact, even if there is some uncertainty. Leadership can encourage personal risk-taking by allowing people to fall short without the risk of dismissal if one particular transformation doesn’t work out. This encourages future risk-taking.”
Don’t forget diversity
Future-fit transformation teams must be diverse in terms of gender, ethnicity, nationality and experiences. This will ensure that a range of perspectives are available. However, it’s not enough to have a diverse room. People from different backgrounds need to be encouraged to voice their opinions, especially if they are among the more junior team members.
“My team does lots of work on psychological safety, which is needed to ensure that people are encouraged and have the freedom to say what they want,” explains the Group Head of Transformation at a multinational bank. “This is vital because the people who really know what the issue is are often not the most senior people sitting around the table. This is a key element of diversity. All studies I have seen say that teams that feel psychologically safe deliver better outcomes.”
Key questions for banks as they look to re-orchestrate talent and invest in people:
- Do we have a targeted workforce strategy to attract, develop and retain the right talent?
- How do we define and embed a transformative continuous improvement culture in a hybrid working environment?
- Are our transformation teams diverse with respect to gender, ethnicity, nationality and experiences?
- How can we obtain the optimal mix of skills in the right locations to develop and retain talent in a cost-efficient manner?