At a recent Williamson Community Leadership Program event hosted by ANZ, Shayne Elliott sat down with BlueNotes to chat about the emerging issues on banking ethics & culture, purpose-led transformation and his view about the role CEOs can play in making that happen.
We started by asking him about business, its role in the community and social responsibility.
Shayne Elliott: Businesses don’t have the option of being observers of social issues and community issues in this part of the world because we touch on almost every single part of Australia.
We are a huge employer. We deal with five million retail customers. We touch every single part of the country geographically so what we do has impact whether we want it to or not.
How we choose to bank, how we choose to behave, what we decide to talk about and all of those things actually do matter.
So then you have a simple choice: should you do that pro-actively and try to do good things or just go about your business and just not care about the impact you have?
At ANZ, we took a view it would be better to be purpose-led and be really conscious of the impact - and try to have a positive impact on the community.
We have been in Australia since 1835 and since then we have financed people’s homes, businesses, factories, schools, hospitals and railways so our role is actually to help our community thrive.
Andrew Cornell: Indeed - to take that one step further - if you don’t have a purpose the profits you make are not sustainable?
SE: Yes, the issue about purpose is it’s not just sitting around making one up. We have been around for a while, almost 200 years so it’s really about finding out what it is and how to articulate it clearly.
The reason it works is because people come to work for all sorts of reasons - some are economic, social and all those other things - but people essentially want a sense of purpose in their lives.
It is no coincidence purpose-driven companies actually attract better people. They motivate people in a different way and they have a more positive impact on customers and the community as a result.
AC: The big challenge then is clearly a cultural challenge. You want people to do the right thing and you want them to want to do the right thing. How do you influence a culture to be more positive? Is that where the purpose work fits in?
SE: Absolutely. The whole culture has becomes a new buzzword I guess. It’s not the easiest thing to define. So how do you influence that?
Well, you have to be ready to hear about what you will and won’t tolerate - and to lead by example.
You have to reinforce those positives when you see it and make sure you stamp out bad things and do so in publicly and visible ways. Then there are lots of little things about being really clear - when you say doing the right thing, what do you mean by that?
What are some of the supporting parts of that culture? For example we want a culture where people speak up, so if they see something bad happening or see a mistake.
That sounds easy but you need to put in place mechanisms and ways of doing it and make sure when people do speak up they are treated with respect and listened to.
We probably don’t spend enough time on culture when interviewing people - we tend to focus on what they can you do, not what kind of person they are or what they believe. We don’t do enough of that as it’s a little bit harder.
We are much more conscious about finding values and capabilities now.
AC: So how do you do hire for values?
SE: That’s part of the problem. Our HR industry developed after World War II to deal with a wave of men coming back from war.
HR is designed to filter out people and so we set benchmarks to make the list smaller so you don’t have to deal with a thousand candidates. It’s all about filtering down.
But in the new world we have to flip it around. It’s not about filtering out; it’s about including more people in the list.
So we have to rethink about our hiring and talent development practises. I think it comes down to softer skills rather than hard skills. It’s more about capabilities.
I mean, do you have a growth mindset? This is the next big thing we are thinking of in the bank. In a fast-changing environment, what you did yesterday is less relevant than your ability to learn, take on information and adapt quickly.
AC: How are you going to encourage a growth mindset in your organisation?
SE: Banks are in the business of managing risk. You identify risk, mitigate it, price it and avoid it. That doesn’t always go hand-in-hand with a growth mindset that tolerates failure.
That’s actually one of the struggles in terms of banking culture. On the other hand, we fail every day and we fail at scale.
If you look at our accounts, last year we lost $A1.9 billion lending money to people who didn’t pay it back. Nobody got fired for that, we build it into our model, we plan for it. We plan to lose $A1 billion to $A2 billion every year.
That’s a lot, so we are not that risk averse. We just have to get that mindset, that approach, built into other parts of the bank.
So it’s ok when a new product or a new process or a new business line or new way of working fails.
AC: Is that something a CEO can play a role in - bringing together good leaders with people who want to go a certain direction and help?
SE: Yes, absolutely. I asked my team: imagine we are on a sinking ship and we have a single lifeboat and there are only so many seats. Who do you put in the boat?
The question was a mindset one. Don’t tell me we need a lawyer, we don’t know if we need a technologist, we just need people to figure stuff out, who are multi-skilled.
We need more people we are comfortable to have in the lifeboat with us and we need to make sure those people are given the right opportunities in leadership to develop to make them even better.
AC: In your experience, in different organisations you’ve worked for, what is the greatest challenge in transforming an organisation’s culture?
SE: It’s about sustainability. So, find the culture you want and ensure the entire organisation is behind it. Then it will happen irrespective of who the CEO is.
The purpose work the company did at ANZ wasn’t led by me, it was led by a group of talented and high-potential people on a development program.
They came back three years ago saying ‘we’ve seen successful companies small, big, private, public, new and old and the one thing they all had was a really strong sense of purpose’.
ANZ had strategies and visions but there was a bit missing.
So, there was a grassroots demand for that which has been much more sustainable, rather than us taking over.
It’s about sustainability. It’s also about being grounded and knowing, being aware of grassroot-lead things.
I think the military style CEO thing doesn’t work anymore, because people today - partly because of social media - don’t want to be told what to do any more.
AC: We see through the years different models of what CEOs should be. How do you see yourself as a CEO? Do you have a model?
SE: No, I don’t have a model. I think, in today’s world the only thing you can really do as a CEO with any lasting impact is the impact you have on the culture.
I know that sounds soft but it is true. We can buy and sell things but they don’t have big lasting impacts on the company as it can all be reversed by the next person.
The real impact you have is around you in the culture you develop and because culture is quite hard to change, it is quite difficult to unwind.
It’s about leading by example and setting the kind of behaviour you want to have.
The kind of people you attract to your organisation - and promote and give authority to - is actually part of that culture build.
I see that as the sort of CEO you have to be - not the storm-trooping, highly directive CEO that perhaps were more in fashion in the past.
Andrew Cornell is managing editor at BlueNotes
The Williamson Community Leadership Program provides a life-changing year of growth for 40 senior leaders annually from across Victoria representing the private, public and community sectors.