By Evan Leybourn, Business Agility Institute:
According to the Business Agility Report, Leadership is the #1 issue facing agile transformation programmes. And it is middle management who are the king-makers of change. They are in the unique position to either drive the corporate vision or freeze the change.
I got a chance to catch up with Paul Lewis, Executive Manager Enterprise Agility at Bankwest, to get his thoughts on leveraging the frozen middle. In this honest interview, Paul shares some of their missteps as well as his insights on where resistance to change emerges and how to overcome it.
What was it that led Bankwest to begin this business agility transformation. Was there an instigating event or was it a strategic move?
Nearly 3 years ago, we found ourselves at a strategic fork in the road. Despite delivering several years of successful performance, we considered the rapidly changing external environment and asked ourselves some fundamental questions. What business are we in? Where should we play and how will we win in our chosen markets and segments?
To be successful in the future we had to be able to move faster and be more customer obsessed. We recognised that this not only required to think differently about what we do but as importantly, how we do it. We formulated the strategy was to create a new operating model to break down our divisional silos and create a bank that could respond to rapid change while really putting the customer at the centre.
We had always talked about customers being important to us, but when we looked at some non-bank case studies, what stood out were those organisations that were truly customer obsessed. Not just in the front line, but through their whole organisation. We didn't have that. That’s when we really started. To get that customer obsession throughout the organisation. To remove layers and break down those divisional silos, so more people would have direct engagement with our customers.
What was one thing that made it stick?
Understanding why. This was especially important for the executive team and senior leadership group. We had to make it clear that we would risk being ‘disrupted’, either in the Australian marketplace or to CBA group, if we didn't change the way we'd been working. It's been a journey, and while there will always be concerns through large transformation, our leaders have committed to it and are fully onboard. I think it is key to ensure your managing director, executive team, and senior leaders are truly on board and own the outcomes you're looking to achieve.
What was the biggest mistake you made along the way? You're changing an entire organisation, so what would you have done differently were you to start again today?
I wouldn't call them mistakes, but I would say that we have learned a great deal and would have done many things differently if we were to do it again. My number one learning was to open-up to co-design across the entire organisation earlier. We were a transformation tribe which owned the transformation; both designing and delivering it. A tight group of people who knew what was going on and had bought into it. Whereas we should have been facilitating the transformation through co-design with the leaders who were going to be part of the new operating model. Those people who were frozen out of the transformation and thus didn't own it and weren't buying into it.
This led to an inevitable degree of resistance. Leaders often struggle with a perceived loss of ‘control’ in agile transformations, more than most change programmes, because the goal is to empower teams to self-manage and to distribute decision making (rather than delegation). This takes away a lot of the command and control leadership. And, by being frozen out of the design, there was additional anxiety and therefore some resistance. While we didn't wait a long time to discover this, we could have accelerated the change from day one had we opened up and been more transparent with leaders.
You touch on psychological safety in the outline for your talk. How important is that in your leaders and how do you develop it?
It's absolutely critical. That was another key learning that we found throughout this process; to create environments that are psychologically safe. We broke a lot of our own rules in the early days and we were quite rightly challenged for them. For example, we created a regular co-design forum to discuss our progress. However, there was a small subset of attendees who were more resistant about the work and made it difficult to present work in progress, rather than work that was complete. We learned that we had to talk to people about the mindset and behaviours required for what we're trying to do.
We discovered that it’s a lot easier to do the "what" of change. To create new ceremonies, processes, and controls, put them in a pack, and share it with other leaders. However, it’s the "how" of change that’s hard. That is to say, the cultural side, the psychological safety, and leadership shifts in mindset and behaviours. And, to be honest, that's going to take us years to get through. These leaders have built their entire career around one way of doing things. You've got to pull that apart and they've got to be emotionally intelligent enough to be able to shift and see that they still have a role to play. So psychological safety for them is to be able to share, contribute and challenge, but in an environment without repercussions.
That was one of the reasons we initially talked a lot about making it safe to fail. We generally don't use that phrase anymore. It's not really a mistake or a failure and it doesn't matter how you sugar coat it, people don't like those words, psychologically speaking. So, what we're all about is breaking things down and doing things that are small. If we don't get it right, we learn from it and do something different next time. Now it's about evolving, changing, learning and continuing to have that feedback all the way through.
Your talk at the Business Agility Conference is "The Frozen Middle - Learnings from Strategy to Execution", what can audiences expect to learn from your presentation?
How to accelerate change through leadership buy-in & accountability through a co-design approach. This was the key learning for us - not having a frozen middle. To leverage our middle managers, bring them in, and make sure they're educated so they can take ownership of the change.
Paul is an experienced corporate leader with a unique blend of entrepreneurial skills and enterprise transformation experience. He strongly believes in putting people first, enabling the future of work, through an awesome employee value proposition and consistently enhanced customer experience. He is speaking at the Business Agility Conference in Sydney on September 24-25 on ‘The Frozen Middle - Learnings from Strategy to Execution’. Get your ticket to hear Paul speak here: http://businessagility.yowconference.com.au