Transformation requires a leader at the helm who you can trust, who communicates clearly, who shares a clear vision of where you’re going and how to get there and who challenges the status quo. I’ve seen many types of leaders in more than 20 years in banking and highlight here the key leadership traits that I’ve found consistently deliver success during transformational change.
Transformational change is a long process with multiple layers and steps. Times of transformation call for a different style of leadership to be successful. Getting it wrong can cost a company its value, reputation and team loyalty. You need leadership that instils a clear vision for the future through inspirational communication and active engagement. These leaders are results-driven, measuring success against clearly defined goals and challenging the status quo.
Transforming a business starts with envisioning the future state target operating model and defining the design principles to guide the change. Great leaders leverage a deep understanding of their environment and industry best practices to create a competitively advantageous change program.
Visionaries build strategy from a unique perspective. They see a future that others cannot yet see or imagine and bring it to life in a way that encourages others to believe it can become reality. Visionaries bring people along the journey by “walking the walk” and building trust in their vision through leading by example and interacting regularly with all levels.
One of the great visionaries of our industry was Charlie Cawley, who built the MBNA multi-billion-dollar company from scratch. Charlie was widely regarded as one of the greatest pioneers of his time in banking – a man who cared and always asked how his employees’ jobs could be made better.
Our founder and CEO and many people at Bridgeforce worked at MBNA/Bank of America and adopted several of the principles that Charlie exhibited.
Effective and inspirational communication brings others along the journey and ensures team engagement. The best transformational leaders demonstrate inspirational communication by drawing on their own experiences to get team buy-in. People are inspired when a leader successfully brings the change to life with anecdotes and stories in a relatable way. Ultimately, consistency in messaging is key.
My colleagues and I recently helped a client implement a new collections unit, specifically focused on supporting customers facing financial difficulty. The project required inspirational communication to bring the potential impact to life to both new team members and customer-facing units that transfer customers to the new team.
We used the early calls as examples to build understanding across all levels. Teams could hear about the terrible circumstances customers were experiencing and just how appreciative they were of this new support being offered. These real-life early customer stories built buy-in. The stories inspired more agents to move to the new team or to offer this new support to customers facing similar difficulty.
Hearing customer reactions and the real difference that could be made, enabled management to quickly get behind the new initiative and secure resource needed to set it up for success. Moreover, if the customer-facing teams weren’t inspired to leverage the new team, the customer experience would have remained inconsistent for customers facing significant hardship.
As a result of this inspirational communication, customer satisfaction reached 92% for those transferred and the process worked seamlessly for qualifying customers.
When all impacted parties engage before, during and after the transformation, that means there are no unanswered questions. All management levels should engage in the change—for those directly and indirectly impacted. Ideally, strong leaders use pilot stages to create early change advocates who will share experiences and engage colleagues on the ground.
Recently, a top five lender wanted to make a transformational site consolidation and engaged us to help them. The consolidation was completed in phases to demonstrate success, build buy-in and create advocates of the change.
Active engagement and regular two-way communication was critical to retain high value resources and mitigate feelings of uncertainty. We held regular open floor meetings with stakeholders and impacted resources at all levels. Also, we sent frequent transparent email updates on each phase. Management consistently walked around the floor and requested feedback to maintain onsite engagement, answer questions and influence attitudes towards the change.
The project’s success hinged on fully engaged resources that felt valued enough to drive the remaining changes and achieve all efficiency goals.
The result? A 90% reduction in site expenses with transparent and effective communication of the change and minimal disruption.
Translating a vision of success into clearly defined and measurable targets is the only way to measure success against your strategic transformational goals. Your goals should cover all facets of the transformation, including the customer, staff, risk, cost and revenue. Additionally, iron out methods of measurement and tracking well ahead of the transformation project start so that trends during and after transformation can be tracked against targets.
A strong leader builds strategically measurable targets with clear definitions into a change project. We recently provided collections training and coaching as an integral part of a client’s transformative change. We helped the client define and measure success through quality, risk (adherence in covering full fact finding), and efficiency/cost (call time). Due to the focus on these specific areas, all exceeded the target of 10-15% improvement.
Example of Measurable Targets and Results from Training Project
Finally, the ability to challenge the status quo is a major differentiator in transformative leadership. Challenging the status quo means you are always looking for strategic alternatives while encouraging all levels to identify opportunities. Transformative leaders find creative ways around red tape that stands in the way of transformation.
Neobanks (non-bank entities in financial services) have demonstrated their ability to challenge traditional banking. While many work with banks in the background to broaden their services, neobanks are less constrained by legacy systems and processes.
As a result, they often bring new products and services to market in a fraction of the time (and cost) of traditional banking institutions.
Many banks have already partnered with fintechs (for example on payment platforms or BNPL products). Traditional banks hope to bring some of this entrepreneurial spirit in-house.
Transformational change continues to be a key focus area in financial services. However, insufficient communication and lack of leadership are the key drivers of failed transformation.
Primary causes of change failure are insufficient communication (59%) and lack of leadership (56%) (Statista).
Failed transformation remains one of the biggest cost drivers in the industry. The costs run into the millions for staff alone. But the costs are not only financial:
At Bridgeforce, we start all transformation projects by asking a few simple questions. Find the improvement areas needed in your leadership style by answering the following:
VISIONARY: Is the vision of the future state understood at all levels?
ACTIVE ENGAGEMENT: Does front-line management understand the drivers for the change?
MEASURED GOALS: Do you have a single view of the organizational change priorities that are aligned to your strategic goals?
MEASURED GOALS: Have you clearly defined roles & responsibilities, escalation routes and decision-making steps?
INSPIRATIONAL COMMUNICATION: Are decisions made definitively and communicated to all interested parties?
ACTIVE ENGAGEMENT: Do your staff feel committed to successfully achieving the transformation and understand what’s in it for them and for their teams/customers?
CHALLENGING THE STATUS QUO: Are you confined by how things are done today, or are you truly looking at new and inventive ways to achieve the same results?
We understand that change can be hard. But it’s not impossible. It’s rewarding for the team and for your customers to see your vision come to life. Start by answering the questions above to determine your leadership baseline. You can count on a trusted advisor like Bridgeforce to get your organization where it needs to be for success.
If you are undertaking significant business transformation, Bridgeforce has helped global lenders like you. For more than 22 years we have successfully executed change and supported leadership during transformations, including:
Contact us to speak about your current challenges and how we can help you achieve your goals