Transforming Nedbank

A fast-changing business environment demands speed and agility from executives. Dean Retief explains how Nedbank shifted gear

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Like many banks, in 2015 Nedbank faced a combination of circumstances that were reshaping the business environment. Increasing regulation, competition and changing customer expectations were combining with a macroeconomic slowdown. The advent of fintech – technological innovation used to support or provide financial services – was creating many new business models, applications, processes and products. The rate of change was accelerating.

Chief executive Mike Brown believed that the bank faced a choice – between turning inwards and looking outwards and embracing change. He says: “As incumbents facing disruptive fintech companies, we have many advantages, such as our customer base and our trusted brand, based on a strong history of successful financial trading. That puts resources at our disposal that, if we invest wisely, can be used to transform our business to be a leader in digital banking. The challenge was to create our own burning platform for change and not be drawn into complacency. My mental picture was that to be successful and grow, the bank had to change faster than the world around it.”

The challenge for Nedbank’s leaders was that the skills needed to lead and inspire change are generally very different from those required to manage the status quo and deliver to budget. Many of our people were risk averse, with a managerial bias for hierarchy, reviewing and monitoring. However, those attributes also made us inward-looking, less nimble and slow to change. We wanted to balance our existing skillset with leaders who could speed up our rate of change, shifting from slow and top-down, to fast and dispersed, yet aligned. In short, we needed a culture change. Brown elaborates: “If the key focus of our strategy is innovation to provide market leading customer solutions, then we need the culture and values of our leaders to align to deliver the strategy.”

From the top

To be effective, change has to start from the top. We started with the Nedbank Executive team (Exco), working with consultants to explore the strategies of the leading digital players in the world, and to shift our agendas from a process orientation to focus on working as a team to lead accelerated change for the benefit of our customers. The Exco’s learning journey is still ongoing – but we have changed our mindset to be more learning-oriented, more client-focused, more competitive, more digital and more agile.

The next challenge was to spread this outlook wider so that other senior leaders felt the same level of ownership for leading change and delivering strategic outcomes. We wanted the next level of leaders to become invested in the strategy – and to stop kicking problems and blockages back up to the Exco.

We had a well-established set of leadership development programmes, but we wanted to create a new experience for executives that could deliver something very different: radical new ways of thinking; the capability to look critically at the bank and devise solutions that would create competitive advantage. Our existing development programmes were no longer fit for purpose. Working in partnership with Duke Corporate Education, in 2017 we launched the Executive Business Transformation Programme (EBT) to enable key executives to look at the bank from outside-in. Our driving idea was that the future is uncertain and no-one has the answers, so we need our leaders to be more curious, more comfortable with the unknown, more open-minded and more willing to learn.

Developing learning leaders

We wanted to make learning fun, to create executives as curious and open to learning as they had been at the start of their careers. Our new programme focused less on sitting in classrooms listening to great ideas, and more on active participation in new ventures. The EBT has many of the hallmarks of a top-level development programme that you would expect from a global company. We created three modules, on strategy execution, customer centricity, and disruptive leadership in a digital economy, linked by inter-session work like webinars and coaching. But two things really made a difference. The first was the decision to travel to observe and learn; and the second was how we actively engaged participants in enhancing the strategy of Nedbank.

Instead of sitting at home in South Africa or going to a world-class business school, we held each of the three modules in a location where radical change is happening in real time: the three ‘Silicon Valleys’. The first visit was to Silicon Cape, a catalyst for tech innovation in South Africa, home to a community of entrepreneurs, developers, creatives, angel investors and venture capitalists. The second module was in Kenya, where techies are creating the so-called Silicon Savannah. This $1 billion tech hub is home to more than 200 start-ups, as well as established companies like IBM. We looked at design solutions to match customer needs, rather than trying to put customers into marketing boxes. For example, we saw ‘ATMs’ that provide a cup of milk, and learned how the company BRCK is connecting off-the-grid schools to the internet with innovative technology. And the third module was in the iconic Silicon Valley in San Francisco.

These visits immediately took participants out of their comfort zones, a precursor to unlearning and subsequently adopting new ideas. Participant Lizzy Mogale said: “It was my second visit to Kenya, but it was interesting to hear some other participants initially question whether there would be anything to learn there. The elections in Kenya were announced and this made some people nervous about going there at all! We were so risk averse – it was good to have our landscape shaken so that we could grow and transform as leaders.”

The second difference was how we engaged participants in our strategy. Our chief executive set the participants, working in syndicate groups, a strategic challenge. In some development programmes, this sort of exercise can be somewhat rote: not particularly strategic, or something that already has a full-time team working on a solution. Not so for us, as Mike Brown elucidates: “The challenge we set was critical to the long-term success of our organization. It forced the cohort to become incredibly engaged with the current strategy, rather than sitting back and criticizing a strategy or an emerging environment they haven’t really understood. They moved from questioning to participating and enhancing.”

Outcomes

The real success of any development initiative lies in its legacy. What has really changed in Nedbank as a result of the EBT? Do our senior leaders act differently and can our customers, and the business, observe and benefit from the changes?

Brinsley du Plessis, business design and enablement executive for business banking, was a participant in the first cohort in 2017. “I had been on a lot of our existing leadership programmes, which I really benefited from, so I was both curious and a little bit nervous to see how the new programme would work. You get a lot of theory on a business school programme like Insead. The EBT was touch and feel – really experiential – and I find learning and doing to be transformational in a way that theory isn’t.

“Soon after the programme I convinced my boss that our next strategy session should follow a framework I learnt through the EBT, with the premise that if you focus on answering customer-centric questions, the financial target will follow – the opposite to what we usually do.

“It was the best transformational meeting we had held. We have also been proactive in adopting the design thinking competencies and our customers have noticed the difference, as we have used these practices and routines to identify real staff and client problems – often the problem you start out to fix turns out to be an adjacent, rather than the core, challenge.

“Using this methodology we have significantly reduced turnaround times for two of our product lines: in one case we improved from an average of 40 days down to seven, and in the second case, from 25 days to 12. Customers and staff alike are delighted with the improvements, as these were previously significant pain points for them. Now, we know we can improve even further.”

Lizzy Mogale again: “On the EBT, the calibre of speakers was excellent: global trailblazers who understand the ‘why’ behind what they do, who live life for a bigger purpose and who want to change the world. Every day I now ask myself, ‘what am I doing to change the world?’ It’s about being curious, passionate and having the desire to have a positive impact. Environment and context can shape your thinking, so I proactively take myself out – read different topics, work in different locations – so that my thinking doesn’t get stuck. I am responsible for driving our annual leadership conference every year and at our last one, participants said they didn’t even feel like they were at the bank. The space, the activities and the speakers were hugely energizing.”

Veona Watson, executive head of HR, strategy and special projects for group finance, was probably the most reluctant participant recruited to the programme – and is arguably now its biggest advocate.

“I had for many years wanted to attend the Insead AMP and was thrilled to have been nominated for 2017, but not by any means thrilled to hear that I would be on the new EBT pilot instead,” she said. “I had reservations about it being a pilot, I had reservations about a programme where all the delegates were from the same industry – actually the same bank – and I had reservations about the emphasis being on digital and client-facing delivery while I was seeking personal growth as a leader.

“I could not have been more wrong. I was entrenched in one way of thinking based on my 30 years of experience. The EBT has been a catalyst for me and I am now on a completely different leadership trajectory. In fact, one colleague said to me recently: ‘Who are you and what have you done with Veona?’

“In the past I would jump fast to problem resolution – today I have learnt to fall in love with the problem, to understand it in all its complexity, and only then to move to an answer in collaboration with others. People in the finance function tend to be very black and white about issues and we see it as our job to maintain financial control through educating and correcting others. Now I have broadened my view to understand that we are uniquely placed to provide strategic insight. We can maintain financial probity while at the same time being open-minded and willing to engage with others in resolving challenges. It’s about how we work with others and take their perspectives into account – we need to listen and learn, not act through decree.”

Chief executive Mike Brown reflects on the impact of the programme. “It is energizing to hear feedback from the groups. It is clear they have learnt a significant amount, but more importantly, they have a different level of energy around teamwork, growth and innovation. They also have a significantly improved network, which is vital, as we can only deliver our strategy together. Our leaders have never been short of analytical skills. Through a programme like the EBT, they are shifting to be more people-centred and creative as well, and I have no doubt the customers of Nedbank will feel this change.”

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— Dean Retief is the HR executive for organizational effectiveness at Nedbank