Cultural Shifts Critical to Transformation Success

Many banks and credit unions may forget that the key to successful introduction of new products, processes and strategies is the employee. Understanding how the employee is impacted by change, and helping them modify behaviors will go a long way towards a positive end result.

Subscribe TodayNow more than ever the banking industry is in a stage of massive transformation, from instituting major cost reduction programs, to becoming a ‘digital bank’, to changing entire physical distribution networks. Each of these changes require motivating your employees to adopt these new solutions.

For instance, if a new mobile banking platform is being introduced, not only are customers impacted by this digital improvement, so are the customer support teams that need to help educate the customer on the new platform, answering questions and helping to move transactions to the platform. But what if employees feel threatened by this digital improvement for fear that they may be replaced by technology?

According to Bain & Company, of all of the behaviors involved is a change initiative, only a few produce the majority of the desired results. These few behaviors during ‘moments of truth’ have the most impact on customers and other employees. For instance, are call center employees encouraged to spend time with customers that have questions about a new digital platform, or motivated to keep the discussion brief in order to meet call duration objectives?

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Getting employees to choose the right behavior during a key moment of truth can be difficult according to Bain research. This is because employees often have very good (and very personal) reasons for not choosing a new behavior.

One way to get the buy-in of employees can be to have them involved in the process, creating the standards of behavior themselves. This is because it takes into account the employee concerns and allows them to determine the right way to overcome concerns.

Changing the Ecosystem

Unfortunately, simply changing the process of developing the correct behavior path is not enough. The overall ecosystem must also change.

According to Bain, “Elements of that ecosystem include the design of the solution itself; the mindset of people in the organization; the role modeling that helps people understand what’s expected; and the reinforcing measures that
sustain new behaviors. When an organization purposely addresses each element and aligns all of the elements of the ecosystem, it can create unstoppable momentum.”

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The key is to make it easy to behave in the right way. This can include checklists, visual cues, reminders during a process and improved training.
Once the right behaviors are determined, bought into by your team and being implemented, Bain recommends ongoing reinforcement to ensure the right behaviors continue. Options for reinforcing the best behaviors include:

  • Ongoing motivation
  • Ongoing feedback from peers, leaders and customers
  • Formal rewards and incentives

The reinforcement should be immediate and ongoing according to Bain. It is also recommended that the positive reinforcement should outweigh/outnumber the negative consequences in a 4:1 ratio.

Understanding the Sequence

As can be expected, not all employees view change the same way or have the same potential impact from change. Therefore, any behavior modification strategies need to be customized to individual groups of employees. This includes different levels of employees as well as different departments or functional areas, according to the research.

Organizations also need to determine where to start between groups of employees. And the order is not always the same. According to Bain, “When a program depends heavily on a cultural change, it is best to start at the executive level and then proceed down through the organization. By contrast, a program to improve customer service, sales productivity or safety would likely focus first on the front line, although team leaders and executives ultimately will get involved in a behavior change program as well.” There are even instances where it may be best to start with middle managers.

It was found that each group of employees will have common roles regardless of the change being implemented.

Senior Executives: Serve as role models and should generate energy and confidence: They need to be aware of employees’ concerns and recognize positive behaviors.

Middle Management: This group needs to change behaviors and lead by example while also providing direct and frequent reinforcement of good behavior by those around them and those who report to them. They also have the responsibility of working with other parts of the organization to ensure consistency of message.

Frontline Employees: These are the direct customer contact people who must implement the new behaviors consistently. It is best if these behaviors are quantifiably linked to a known performance goal, (productivity, customer service, etc.).

Importance of Clarity and Consistency

In any organization, employees at any level and role usually want to do the right thing for their company. The Bain research found that the best results from any behavior modification comes when the plan of action is clear, is consistently and constantly reinforced, and where there is a team approach to understanding and implementing the behavior desired.

Change is never easy for anyone in an organization. But, for a successful transformation to occur, it will be important for employees to be at the forefront of understanding and communicating the change. Required behavior changes need to be clear with positive behavior adjustments rewarded.

Bottom line, change can not be implemented in a top-down manner without understanding the impacts to the entire team and the co-creation of the best behavior modification plan of action.

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