People Insight recently released a report exploring culture during a transformational change in financial services. We share five key takeaways from the report.
“Transformational change occurs in response to, or in anticipation of, major changes in an organisation’s environment or technology … [transformational change is] associated with significant revision of strategy (with changes to) structures, processes and culture to support the new direction.”
— Cummings and Worley, 2009.
Look at any news about HR trends right now and it’s all about culture. Or explicitly — having a culture that supports people in organisations undergoing transformational change.
Whether its wholesale business process change, restructuring or introducing new tech — it seems all organisations are responding to VUCA (Volatility, Uncertainty, Complexity and Ambiguity), intense competition, rising customer expectations, the need for new skills — and regulatory pressure. Change requires our people to flex, doing things in entirely different ways, at different times and with varying resources. Change can be tough – mentally and emotionally. As Anderson and Anderson say, “often leaders and workers must shift their worldviews to even invent the required new future, let alone operate it effectively.”
Financial services couldn’t be a better example of an industry where extreme change is the new constant. After the 2008 financial crisis, culture was cited as a root cause of the major conduct failings that occurred. Rebuilding trust, the FCA stated, would need a major rethink about the way organisations did things. A year ago, the FCA launched their culture paper, designed to stimulate discussion of what good culture might look like, the role of regulation and how to change behaviour for the better.
At People Insight, we are experts in the area of company culture, employee experience and meaningful, lasting change. We recently published a report— packed with valuable insights from industry leaders in the financial sector — to understand how the financial industry was enacting transformational change and bringing their people along with them.
Here are five key messages that shone out as critical advice to make transformational change as effective as possible.
1. Transformational Change Requires Authentic, Human Leadership
“The right leadership, role models, and clear expectations around beliefs and behaviours help create a far more positive culture where people feel confident enough to bring their whole selves to work and produce their very best work.”
— Cheryl Bosi, HR Director at Lloyds Banking Group
Transformational needs leaders. But it also places significant pressure on them. Employees look to the CEO, the board and their favoured senior managers for consistent, confident communication to explain the rationale and the vision for change, or they won’t get on board. Leaders need to be highly motivated by the change — as well as influential, dynamic, reassuring — and behave openly to guide their team.
As Fiona Anderson explains, leaders must behave authentically and consistently over the long haul of change — not by just “spitting out words” at the start or as Rob Jarvis puts it, “rely on a speech and a few follow-up emails”. They need to communicate regularly, consistently, setting clear expectations for what they are going to do — and critically, what they expect their people to do.
Of course, this requires a persuasive rationale, and different people will respond to rational, commercial or emotional reasons. As Karen Corran says, “people need a clear reason for change which is well-considered, well-positioned and communicated in a way in which people understand (even if they don’t agree).”
Consider how the organisation’s values help people to cope with change. Hannah Grinsted mentions how one of Bud’s values is “…Grit — the ability or desire to deal with ambiguity and ongoing change.” Fortunately for this new organisation with new people and new values, they look to recruit people who display “grit” and come on board with the expectation of being involved in change.
“It is far easier for a business to succeed in its ongoing evolution when everyone on board has fully bought-in to the mission and that they have the positive approach necessary for embracing ongoing change.”
— Peter Briffett, CEO & Co-Founder of Wagestream
More on leading organisational change successfully here.
2. Line Managers Are Pivotal to the Success of the Change Message
“Invest time in coaching your managers to play a part in your communications strategy and reinforce key messages confidently. This means that colleagues hear the message in a way which they can connect with, helps them to visualise what the future might look like for them.”
— Fiona Wallace, Brewin Dolphin
As Fiona says, line managers play a pivotal role in change. Employees are more likely to have frank conversations with their line manager. So, in the communications plan for change — make sure line managers as key stakeholders are well briefed. Provide them with the opportunity to ask questions, so they are fully equipped to support their people. Give managers guidance and encouragement on their role in living the behaviours, meeting with their team and keeping the communication flowing — in both directions.
“When everything is up in the air, the majority of people feel insecure and unsettled. They look, more than ever, to their leaders to give them reassurance that all will be well.”
— Nigel Girling, The Babington Group
3. Change Requires an Agile Approach, Celebrating Wins and Acknowledging “Failures” as Lessons
“There are three crucial steps to take in order to successfully lead change: Reduce bureaucracy, reduce long decision-making cycles, and celebrate success.”
— Susanne Chishti, CEO of FINTECH Circle
Agile principles have spread beyond project management. Many industries now seeking to adopt “rapid testing, short feedback loops, quick decisions and early to market” as a mantra to compete in a market of frequent innovations to satisfy rising customer expectations.
Susanne argues that change programmes benefit from this way of thinking. Change must be at pace, and pace requires quick decisions. In turn, this requires more autonomy for staff without time-consuming sign off processes. “Leaders,” Susanne says, “must allow their people to test things, to note learnings, and to take action.” There’s no reason this shouldn’t apply to internal change as well as external projects. It can make all the difference between transformational change feeling like a slog, or a rewarding experience. Cheryl Bosi mentions how Lloyds Banking group have taken an Agile approach, with small groups experimenting with how to solve issues like collaboration and day to day “annoyances”.
Of course, change often means doing things in ways you haven’t done them before — which requires creativity and innovation to come up with solutions to unique, pressing problems. If employees come up with new ideas, projects or experiments, but they are not successful, don’t let them feel like failures. Instead, allow for a “fail fast” mentality. Leaders should celebrate the lessons learned and why the company is stronger as a result.
What’s more, the benefits of agile can have a positive effect on employee engagement, argues Peter Briffett, with naturally more employee involvement, autonomy, teamwork and communication.
4. Transformational Change Is Constant — but Remember What You Want to Preserve
“Culture change is not achieved through a single action or project – it is the culmination of all the different actions you take in an organisation and in my experience, positive culture change is something which happens over time.”
— Fiona Wallace, Brewin Dolphin
Change is the only constant in life and business. Change is always going to happen — it’s never something that is “complete”. As Nigel Girling says, “much of what leaders have been taught about managing “change” since the 1980s is no longer helpful. It assumes that stability is the norm and that changes can be managed as projects before returning to a steady state. But constant change is the new normal.”
What’s also true is every change is likely to have an impact on organisational culture. One of the most important things any company can do is to focus on preserving the values and parts of the company central to its identity.
At Brewin Dolphin, Fiona Wallace shares that work-life balance is of utmost importance. Regardless of the change, Brewin Dolphin’s team ensure employees have consistency and assurance that the company’s identity and beliefs remain the same.
5. Actively Listen to Employees and Give Them a Say in Transformational Change
“Get into the habit of listening. Giving people the opportunity to have their say can make all the difference to whether you make change with your people or despite them.”
— Sarah McPake, Senior Manager at TSB
Probably the most important finding of the report is the need to involve people in change, rather than do it to them. As Nigel Girling says, “volatility is only scary for the powerless.” One of the key ways of involving people is giving them a voice to express their views on, and ideas for the change by developing a comprehensive listening strategy.
A listening strategy takes your peoples’ feedback, suggestions and concerns on board at every stage. It incorporates a range of employee surveys, focus groups and pulse checks with specific purposes and timings. Critically, the data will help you monitor if your people across the organisation are with you as change progresses — allowing you to take quick, targeted action.
Initially, consider how the change will affect the employee experience and ask your people for their valuable insights. When your people raise issues, ask them to help create solutions —again demonstrating their views matter, and involving them rather than applying change to them. At Jersey Financial Services Commission, working groups of employees are empowered to find solutions and drive change forward after each survey to improve culture and the working environment.
People Insight are trusted by many leading organisations to help them develop the cultures they need to navigate change effectively. Get in touch to find out how we can help you design your culture and develop comprehensive listening strategies today.
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