Leaders are challenged with finding a balance between encouraging a fail-fast approach with ensuring effective risk management practices as established by regulation.
2. Co-create and continuously articulate a transformation vision to boost employee engagement
Ultimately, transformation happens because of employees. But, they are often understandably focused on their day jobs. They may be aware of transformation initiatives but feel detached from the process and not emotionally invested in the vision. Indeed, according to transformation leaders, the most frequently cited cause of unsuccessful transformation is an unclear vision. And less than half of employee respondents (41%) say they understand and believe in their organization’s transformation vision and strategy.1
This needs to change. Transformation will only succeed if employees are fully aware of the strategy, believe it will materialize and are willing and empowered to help to implement it. Maximum success can be achieved when the purpose of individuals and the organization align.
The first step to achieving this is for senior leadership to communicate a clear transformation vision, articulating why it is important, what it entails and the role of employees in its success. This will help to build belief in the transformation goals across the organization and inspire teams to participate.
A transformation vision that is documented in a few presentation slides and only accessible to a limited circle of executives is insufficient. Instead, banks must relentlessly communicate the bank’s transformation vision to the entire employee base through a range of channels, including in-person, online, and even through immersive platforms like the metaverse. Innovative branding gives transformation roles prestige, which can excite employees to participate.
Executives can also maximize employee engagement in transformational programs by encouraging employees to co-create the change. This could be formalized through crowdsourcing initiatives such as hackathons, which create an environment where employees can offer ideas that accelerate existing projects or inspire new ones. Many banks already do this to some extent, and involving senior leadership in these initiatives is critical.
Gamification can help encourage participation and bring hackathons to life. For example, senior executives could serve as judges, unlocking incubator funding for winning initiatives. Employees that make meaningful contributions could be celebrated in company-wide communications and awarded prizes such as dinner with the CEO.
All of these initiatives must be underpinned by empathetic leadership that cultivates a “we and not me” culture. To avoid dictating transformation from the top down, leaders should encourage a two-way dialogue between executives and employees to ensure that everyone feels included in organizational change. An environment of psychological safety must be created in which fast failure is accepted, not punished, empowering individuals and teams to experiment. This approach is especially likely to appeal to newer entrants to the workplace, who tend to respond positively to an open and considerate working culture that values their participation.
3. Design for diverse viewpoints
Successful transformation requires a diverse range of perspectives. There are two aspects to this: diversity dimensions, such as gender, ethnicity, age, sexual orientation, social mobility and ability (among others); and employees’ competencies and skillsets.
Cross-functional teams-of-teams that bring together multiple competencies to solve problems and deliver specific transformation outcomes can promote diversity of thought. These teams should include employees from multiple functions, including technology, control functions and the business, and also provide balance with respect to diversity dimensions.
Leaders of these teams must adopt various techniques to ensure that diverse voices are heard and acted on. For example:
- They could evoke perspectives from quieter members of the team and make efforts to control dominant personalities.
- They can invite those attending meetings virtually to contribute first to nurture their contributions and reduce in-person bias.
- They can be mindful of scheduling calls at mutually convenient times for team members operating in different locations.
- They can send material ahead of meetings to help non-native English speakers absorb content.
- They can instill governance protocols that define decision-making rights to protect a consultative approach.
Many banks have established teams-of-teams, but often find them ineffective. This is partly because employees see them as a distraction from their day jobs. Leaders can address this by giving teams-of-teams “protected time” so that team members can focus on transformation initiatives without it detracting from their primary roles. Individuals could also be seconded to a team-of-teams for a defined period of time, enabling them to spend the time that is necessary to experiment, build new skills and expand their professional network.
Teams-of-teams should also be given some license to co-design their own ways of working, including allocating roles and decision-making rights. They could also determine how frequently they interact and establish a preference for in-person or virtual meetings based on the collective needs of the team. Rules of engagement could also be set across the team, such as taking everyone’s opinion into account and not blaming individuals for mistakes.
Here are some questions for banks as they perfect the human aspects of transformation:
- Does our organizational culture support agile transformation and fail-fast principles?
- How do we incentivize meaningful employee participation in transformation?
- How do we ensure that our transformation vision resonates with the people it is designed to benefit?
- Are our teams-of-teams designed for success? How can we help them perform more effectively?
- How can we balance incentives to reward both agile ways of working and successful transformational outcomes?
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- Respondents who indicated the statement describes their transformation to a significant extent, defined as a rating of 8 or higher on a scale from 0 to 10.
The lack of focus on the people experience may be one of the primary causes for failed transformations. Promoting a fail-fast culture, articulating a clear vision and continuously and actively engaging employees on the execution of this vision, and adopting techniques to bring in diverse skillets and perspectives, will be key in unleashing the people potential.