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Bosses out to transform corporate culture must not expect a quick fix,
writes Christine Long.
The Commonwealth Bank's chief executive, David Murray, admits to being on a
learning curve in the past six months. In that time, he has realised that
measuring the success of the CBA's three-year plan to transform its corporate
culture, called ``Which New Bank", is not just about getting the numbers right.
As he told an audience of fellow bankers at a Securities Institute of
Australia luncheon this week, ``One of the best learnings I've had in this is
that financials are not everything in understanding progress."
The quite non-banker-like comment follows the revelation in the CBA's interim
profit announcement last week that it has already spent $346 million on its new
strategy. But the 38-year Commonwealth Bank veteran says it is money well spent
if the result is engaged staff and satisfied customers.
Discussing the catalyst that had triggered the CBA's transformation program
Mr Murray told guests at the luncheon: ``I had looked at a chart which showed
150 years of the relationship between credit and nominal GDP in Australia and it
was abundantly clear to me that our industry would have to go through a major
shift."
While seeing the need for such a shift was easy, Mr Murray said, getting the
timing of the response right was ``near impossible".
``One of the problems in leadership is that you see things with an urgency
that sometimes the organisation or the people do not."
One of the mistakes leaders can make is to demand change occurs in a time
frame that is not feasible for people in the organisation, Mr Murray said.
However, driven by the conviction that it would need to take a ``group-wide,
transformational, all-in approach to the change" if people were going to be
levered out of their comfort zone, the bank built a plan ``from scratch" in
four months.
Mr Murray said he regarded customer service as essential to measuring the
success of the bank's transformation program.
``The most important one for our customers is what we call our strength of
relationship score. (It) goes straight to a very simple proposition, that is, do
you believe the service is strong enough that you would actually recommend us
to somebody else?"
Inextricably linked to that were the internal service quality scores for 300
items measured on a monthly basis and its staff engagement score, he said.
Mr Murray thinks there is plenty of room for improvement in staff engagement.
``We still think that we will not get the strength of relationship score up to
a satisfactory position unless we improve the staff engagement score again by
about 20 per cent," he said.
The program has involved significant changes for both the leadership team and
the wider workforce, Mr Murray told the delegates.
``All of my team now spend much more time with customer-serving staff. They
spend much more time coaching their own teams and each of them has a
cross-divisional function in the major program which they must personally
sponsor and lead," he said.
Mr Murray said everyone in the organisation must attend a services and sales
meeting every week, where they discuss ideas for service improvement. Each
person at the meeting makes at least five commitments they will fulfil in the
forthcoming week.
Part of the cultural transformation also means tackling nitty-gritty issues
such as clothing and language, Mr Murray said.
``We speak in a respectful way because people who put their money in a bank
like to trust the bank and believe that people in it have integrity," he said.
``More importantly, when we design complex operating processes we have names
for them and names for the steps in the process.
``If we employ all these whiz-bang MBAs and people who change all the names
as soon as they start, it doesn't work."
Mr Murray believes there will be an inevitable deterioration in customer
service if two staff members are trying to have a discussion with each other and
they are using different terminology.
``That's an example of things we have to focus on and drive every day if we
are to make a difference," he said.
``If an organisation has a behavioural flaw, whether it's arrogance or lack
of integrity, it's very hard to be confident that things will get done well and
mistakes won't arise.
``We all have issues inside our own organisations and it is for that reason
we push culture very strongly."
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