The financial services industry is encountering unprecedented disruption. Here’s how ANZ Banking Group is rethinking how it trains its leaders to respond to their new business environment.
The financial services industry has been buffeted by a new set of forces, notably lower growth, heightened consumer expectations, increased competitive intensity, and greater regulatory, legal and public scrutiny, none of which show any signs of abating any time soon. To succeed in this lower-growth, lower-return environment, it is crucial for banks to become more productive, innovative, responsive and values-led.
To lead this change, executives need a mindset shift to deal with complexity, embrace uncertainty and solve complex problems – especially where they are not experts and where there are no known or right answers. Faced with this, leaders should orchestrate networks and generate a range of possible options. This can no longer be achieved by sitting in a boardroom brainstorming – the process is too slow and the range of brains involved is (usually) too limited.
Instead, leaders must have the humility to rethink the concept of hierarchy and accept that the role of ‘leader’ should be assumed by the person or group best positioned to guide a specific decision. Leaders should also insist on experimentation, recognizing that agility will come from learning what works and, as importantly, what doesn’t. This is a big shift. The fear of a business idea failing needs to be replaced with the fear of failing to experiment and of living up to personal values and solid standards of conduct.
New ways to find answers
ANZ partnered with Duke Corporate Education to develop our executives to operate more resiliently when facing complexity and unpredictability. Putting people at the centre of the design, we devised a programme to support ANZ executives in complex problem-solving – while adopting an open mind about where and how the answers would emerge.
The programme was designed to incorporate emergent best practice in leadership development – especially the need for more immersive experiences, which only works if individuals can learn from analogy, rather than from instantly relevant experiences. That said, the design also demanded that our executives swiftly applied their learning to real ANZ business challenges and demonstrated immediate improvements.
Real business challenges
The programme was sponsored by ANZ’s chief financial officer, also accountable for group strategy. Rather than using an abstract and simulated complex problem, participants were anchored in ANZ’s reality and given a real business challenge, to craft ANZ’s response to the evolving banking landscape. The key question posed was: “Given who we are, the need for significant change, and assuming we cannot hedge our bets by doing a little of everything… what are the key options we should consider now, why, and in what sequence?”
The framing challenge for the second programme was what good execution looks like in a more volatile, uncertain, complex and ambiguous world. These programme adjustments were critical, and reinforced the strategic nature of the programme – i.e. not ‘static’ programme deliveries, but evolving to support a transformative business agenda. From a design perspective, the approach was to take a familiar and complex problem, and study it in an unfamiliar environment to see what might be generated. To achieve this, we wanted to go somewhere very different.
The Chinese experience
We went to Guangzhou, the capital of southern China’s Guangdong Province, and largest city in one of the world’s most important industrial areas. It was selected because it has gone through a transformation of its own from being the centre of manufacturing, to the home of some of the most innovative e-commerce companies – Alibaba, for example. In addition to having a complex business environment with relevance for ANZ, Guangzhou also had an interesting cross-section of community, environmental, social and urban issues.
Participants were exposed to organizations from a wide range of industries that had experienced, and responded to, significant shifts in their operating environment due to regulation, competition, market trends, consumer preferences, technology advancements and demographics.
The exposure outside the financial industry challenged our executives to think outside of their usual banker mindset. Processes and approaches learned in China were immediately applied to real ANZ challenges. One of the most noticeable aspects of the companies our participants met was that many had a clear and compelling sense of meaning and purpose, which guided them through turbulent times and complex decision making. This became a rallying point for our executives, as they felt they could elevate similar messages in ANZ.
Eighteen months have gone by. Many of the business initiatives picked by our executives have been refined (in smaller teams and via workshops) and our management board has endorsed their implementation. This is not just refinement of business as usual. These initiatives are focus areas that will fundamentally change the bank. One example is our new sense of organizational purpose – a focus on why we do things, not just on what we do. This links closely with our emphasis on shared values.
While we focused on individual capability building, executives worked together, across business and geographical boundaries, to reach collective decisions. This was critical for building stronger connections among the executive team, and breaking through systemic and cultural issues. We can only change the whole bank if all our most senior executives tackle the same issues in the same way. We now have more than 60 executives who have taken up a role in addressing enterprise-wide issues, rather than concentrating solely on local business matters. Participants have a clearer sense of their enterprise leadership role and how best to take it up.
In short, our executives have learned to think and work differently. We are seeing evidence of this mindset shift in new strategic plans and increased execution agility. And we continue to support them through internal collaboration communities – building their fluency in the use of social tools as a new way of managing information flows, amplifying the message and implementing new ideas.
Suzette Corr is general manager of human resources Australia and group general manager of talent and culture at ANZ.
Anita Fleming is head of learning and development at ANZ. In this capacity she is responsible for the bank’s global learning offerings and curriculum in the areas of sales, risk, leadership, operations and services.
An adapted version of this article appeared on the Dialogue Review website.