Please view Video 1 (Introducing our Nomination) which summarises our Cultural Transformation Journey
Our nomination in summary
Our nomination describes the cultural transformation journey in Lloyds Banking Group’s (LBG) Community Banking division, led by 6the Colleague Engagement & Responsible Business team.
We’ll tell you about how we landed and embedded a new set of organisational Values and Behaviours to over 32,000 colleagues through peer-led training sessions, and how our internal collaboration tool ‘Hive’ helped us to do this, resulting in a significant cultural shift. This change has been critical in helping us deliver our vision and purpose – to Help Britain Prosper by being the Best Bank for Customers.
Where it all started
The 2008 financial crisis brought a period of immense change, ambiguity and scrutiny for the financial services industry. LBG itself was facing a difficult time following the HBOS acquisition and PPI liabilities. Customer behaviour was also evolving and expectations from banks were becoming increasingly more complex. It was now clear to us that we could not stand still and needed to continue to innovate and modernise to remain a key competitor in the financial services industry. We recognised that our people are our biggest competitive advantage and we needed to invest in them to manage these changes as our operating environment wasn’t encouraging the right behaviours to enable us to do so.
Following this difficult time, post financial crisis, the Financial Conduct Authority (FCA) pushed for greater transparency and accountability in financial services, with a big focus on public, colleague and customer trust. Strong leadership was needed with a clear vision and purpose – this required a cultural change with a customer-centric approach. The FCA stated that a firm’s business model and strategy is very much interlinked to its culture and defined culture ‘as being the mind-sets and behaviours’ of colleagues within a firm.
A few years on from the financial crisis, we’d made progress but the way we were managing performance wasn’t driving behaviours that fitted with our aspirational culture. We made a clear statement about the need for change in our cultural direction and started to focus on conduct and changing colleague mind-sets. It was important to also understand what our people capabilities needed to look like, now and into the future and where the gap was.
To understand our progress, we focused on our internal colleague surveys and external banking research from the Banking Standards Board (BSB) survey which indicated that colleague engagement was good, however personal resilience was low and colleague verbatim showed there was still more to do.
What we did to fix this
We already had our Group values of putting customers first, keeping it simple and making a difference together. Colleagues had always been passionate about great customer service but needed greater clarity and purpose to help them live and breathe the values. So we introduced 12 new behavioural statements to bring the values to life and show colleagues how to put them into action. Our Values in Action (ViA) peer-led training programme helped to land and roll the behaviours out to colleagues.
To support our leaders to inspire and empower their teams, to also prepare them for the future and the changing role of a leader, we introduced four new leadership behaviours. We successfully landed these behaviours with our leaders using peer-led cascade sessions.
To embed these behaviours, we needed to become an integrated collaborative organisation. A huge enabler in this process has been Hive, allowing for the first time ever, widespread collaboration across Community Banking and the Group using the power of digital. Collaboration on this scale across teams wasn’t possible before.
Hive, which is a two-way communication tool, allows colleagues to post content (including videos, images, discussions, polls and comments) and create groups, bringing together colleagues and generating ideas on specific business topics or projects. It’s enabled colleagues to get instant answers from peers and subject matter experts and find solutions much quicker.
How successful were we?
The scale of our work has been immense and far reaching – touching all colleagues in Community Banking and subsequently right across the Group. The peer-led element of the Values and Behaviours training was unique in bringing out authenticity and sincerity with colleagues. The Hive use of technology has also promoted simpler and more efficient ways of working and allowed us a group-wide collaboration tool to truly embed the values and behaviours.
Our investment in colleagues has led to a more engaged workforce and encouraged colleagues to bring their best selves to work, which in turn has led to a better customer experience. We’ve successfully modernised and improved our way of operating.
Increased colleague engagement
Our 2017 colleague engagement survey scores showed an increase of 7 points in “good collaboration” and an increase of 5 points in “trust and confidence in our colleagues” compared to 2016 survey results (scores of different metrics are out of 100). This shows great improvement and demonstrates that our initiative has set us on the right track in building confidence in our colleagues to better serve our customers brilliantly. Our Community Banking (CB) scores outperformed the UK High Performing (HP) norm in 2017 and we are very proud of this achievement.
Scale and impact of our programme
28,000 colleagues benefitted from the Values in Action embedding sessions and 9,000 from the Leadership Behaviours sessions.
Following the sessions:
96% of colleagues found the 12 new Group Behaviours easy to understand.
94% of colleagues understood the impact of the new behaviours on how they are managed.
99% of senior leaders understood the impact of the Leadership Behaviours on how they managed performance within their teams.
92% of junior leaders told us they found the training sessions useful, with 90% finding the Leadership Behaviours easier to understand and could see how to bring them to life in their role.
Our supporting collaboration tool, Hive, has now been rolled out to all colleagues in Community Banking. This has allowed us to connect, coordinate and collaborate across the Group, providing us all with better visibility of our customers’ needs, enabling us to provide a better support service.
The external climate has driven significant changes in customer behaviour and their expectations of us. As a customer-driven organisation, we must see this as an opportunity not a threat. With our competitive advantage of a multi-brand, multi-channel offering, and as the largest digital bank in the UK, we must continue to use this advantage to deliver better outcomes for our customers. Our Values and Behaviours remain our constant to guide colleagues and keep our customers at the heart of everything we do. This gives us all a consistent platform that we can constantly return to and empower our teams with.
Every single colleague has been able to be a part of the process, and we are currently in the next phase of our culture journey – upskilling colleagues to make the best use of Hive to create a more engaged workforce and continuing to embed the values and behaviours into all of our people processes. This means that colleagues will live and breathe them from their very first day in the organisation.
To begin, a bit about Lloyds Banking Group and our Community Banking division:
Lloyds Banking Group is the largest retail and commercial bank in the UK and has a significant responsibility in supporting the UK economy through the products and services we offer.
We have a clear purpose, to “Help Britain Prosper”. Through our products and services, we’ve been doing this for more than 250 years and today we help over 30 million customers with their financial needs.
Our Helping Britain Prosper Plan takes us beyond business as usual. It tackles the social and economic issues that matter most to Britain: its people, businesses and communities. It differentiates, unites and inspires our Group and colleagues to meet some bold targets.
We support a wide range of customers with different banking needs at every stage of their lives. We have a relationship with nearly every home in the country and with many businesses too.
Our vision is to be the Best Bank for Customers and we will achieve this by ensuring that we live by our values of “Putting customers first”, “Keeping things simple”, and “Making a difference together”.
We offer core banking products and services through a number of channels, to suit our diverse and changing customer needs.
Community Banking is a division within LBG and accounts for almost half of all colleagues in LBG. Within Community Banking we have branches on the high street, telephony services and central support functions. We operate under a number of brands including Lloyds Bank, Bank of Scotland and Halifax.
Before we share more details about our nomination, it’s important to first look a bit deeper at the financial services industry and the steps we have taken to date to address the issues we’ve faced since 2008.
Background and context…
In 2008 the financial crisis changed the way in which financial services had been operating and hugely disrupted the UK economy.
The aftermath resulted in an increase in legislation and regulation and a lack of public trust. Coupled with the acquisition of HBOS, a government bailout and the PPI scandals, LBG faced a very challenging time.
Alongside this there was intense competition from traditional and new competitors who were disrupting the market.
Consumer behaviour was also changing at an accelerated pace and customer expectations has risen steeply as a result of advancing technology creating more real –time interaction.
Our culture journey over the last five years…
LBG recognised that in order to survive during this challenging period, strong leadership with a clear vision and purpose aligned to a customer-centric approach to create the right cultural environment would be required. Recognising that our people are our biggest competitive advantage, our challenge was how we would go about creating an environment which championed a diverse and inclusive workforce whilst investing in colleague capability and encouraging a collaborative culture.
If successful, this would lead to more engaged colleagues and an improved customer experience. In addition we would more effectively meet our regulatory requirements and deliver for our shareholders.
In 2013, we began to identify the change needed within Community Banking to embark on a cultural transformation journey:
FOCUSING ON THE CUSTOMER – We transformed our performance management particularly remuneration for colleagues as it was not promoting the right customer-focused behaviours, a bold change in 2014. This forced an increased focus on customer service and encouraged colleagues to act with integrity when establishing the needs of our customers. This also aligned to the Financial Conduct Authority (FCA) and Prudential Regulation Authority’s (PRA) Remuneration Code (SYSC 19).
UNDERSTANDING THE VALUES – To support the cultural shift required we recognised that there was also a need to change colleague mind-sets and revisit our values – ‘Putting customers first’, ‘Keeping it simple’ and ‘Making a difference together’. One of our early pieces of research established that there was variance in colleague interpretation of the group values and clearer guidance was required.
SHIFTING TO BEHAVIOURS – In 2015, our ‘Best Bank for Customers’ journey began enabling us to identify and focus on the colleague behaviours and processes needed to deliver the best customer experiences and integrate these into colleagues’ everyday roles.
DEFINING PEOPLE CAPABILITIES – In 2016, we defined the current and future capabilities that our colleagues and leaders would need to have in order to support our Best Bank for Customers vision. This resulted in an evaluation of skills and capabilities and identified clear areas of focus where there were gaps. We also needed to simplify our previous leadership framework which was too complex with over 50 leadership behavioural statements and not reflective of our needs of leaders for the future.
UNDERSTANDING OUR OPERATING CLIMATE – The recent Banking Standards Board (BSB) surveys showed that across the banking sector personal resilience was relatively low. This was also the case in LBG, despite our organisational resilience being high. We recognised that we needed our leaders to help build resilience, personally and collectively with their teams, to be capable of positively navigating change.
Following colleague feedback and the studies we undertook, in 2017 we launched our new colleague and leadership behaviours as outlined in our nomination.
Encouraging our colleagues to embrace our values and inspiring our managers to become leaders…
6. MODERNISING OUR WAYS OF WORKING – To embed these behaviours, we needed to become an integrated collaborative organisation. A huge enabler in this process has been Hive, our online collaboration tool which colleagues can use to post content (including videos, images, discussions, polls and comments) and create groups, bringing together colleagues and generating ideas on specific business topics or projects. Hive has allowed for the first time ever, widespread collaboration across Community Banking and the Group using the power of digital. Collaboration on this scale across teams wasn’t possible before.
Benefits of our new Values & Behaviours model for LBG
Our Values were designed to help us achieve our vision to be the Best Bank for Customers. We needed our colleagues to focus on being customer centric, collaborative and feel empowered to challenge traditional ways of doing things.
We wanted to empower our people to recognise and integrate the behaviours into their everyday roles.
We wanted to create much more of a learning culture, where colleagues weren’t afraid of failure and learning from it by trying new ways of doing things.
We wanted our leaders to encourage colleagues to bring their best selves to work by developing confidence, and embracing the value that a diverse and engaged team can bring. The new leadership behaviours would empower our leaders to be authentic in their leadership style.
It was essential that we were really clear to colleagues and leaders about how we wanted to do business as a bank, following a significant and challenging period of uncertainty. At the heart of our people strategy, it was important that our colleagues and leaders understood that our people have a responsibility to change the way we operate, to do the right thing and to be the change we wanted to see. Culture is very difficult to measure, but the way in which we have delivered this change is the reason we feel that our team are deserving of this Peer Award.
A different approach to changing culture…
Following colleague feedback and learning from previous cultural change programmes, we saw that communication to colleagues was central to this initiative. This meant investing in our people so that colleagues really understood the need for change, what was changing and the reasoning behind it (as outlined above).
We also recognised that we needed to allow time for colleagues to understand what each of these new values and leadership behaviours meant to them individually in their roles, in their teams and as leaders.
Embedding Values & Behaviours into our people strategy
It was essential that colleagues felt this change was a real cultural shift, and not just a temporary “campaign”, so we had to ensure our entire people strategy delivered the same message. Alongside the training, we worked collaboratively with other teams to align all our colleague support materials. This included performance management materials, recruitment processes, colleague induction materials and development tools. This work was essential in ensuring all our people processes helped us in embedding the values and behaviours.
Values & behaviours recognition
We need to ensure that colleagues were being recognised for these behaviours. We have developed recognition methods such as e-cards, instant awards and quarterly nominations. We want each colleague to feel proud for what we stand for and can see the direct positive impact this will have on our customers. Colleagues are empowering their teams and creating encouragement across their peers through these positive reinforcement methods and has proven to be very successful (please see supporting PDF).
The challenge continues to be how we support our colleagues in living and breathing the values and behaviours. It requires time and effort and a key enabler is to ensure we continue to recognise success and progress as colleagues build their personal understanding and accountability.
Our on-going journey and next steps:
We’re really proud of how far we’ve come as an organisation. Nonetheless, cultural and behavioural change takes time, is difficult to measure and requires continuous effort. So we absolutely acknowledge that our journey is on-going and is not a destination. We have highlighted our key areas of focus and these continue to be where we want to learn and develop to Build the Best Team so that we can become the Best Bank for Customers.
We’ve identified the following on-going activities that will continue to take us closer to our vision and our Bank of the Future:
Group Values & Behaviours & Leadership Behaviours:
We’re on a journey to empower our colleagues and have just completed the rollout of the Leadership Behaviours to our junior managers. This will help us support continued embedding of the Values & Behaviours for all colleagues.
We understand that culture and engagement are very much connected but are nonetheless different things. To help us have a robust measure for culture, we are developing a Culture Pulse survey to help us measure behaviours (rather than engagement) for the first time. This is due to launch in April/May this year.
In order to get a holistic view of what are colleagues are doing to embed the values & behaviours, we are creating a single view of different business unit change activities, focussing on what impacts people and culture to encourage better collaboration across Community Banking.
We want to ensure our senior leaders continue to set the tone from top and have the guidance to do so, therefore creating support tools to ensure our Values and Behaviours are brought to life in mid-year and end of year performance management discussions.
We created a specific group in Hive, our collaboration tool for ‘Leadership Behaviours in Community Banking’ and have reached >1000 members in a short time frame – membership continues to grow. We want to continue to harness the power of Hive to share examples of Leaders role modelling the behaviours and leading discussions with real life examples of bringing the behaviours to life. Colleagues are already sharing best practice and reflections from their training sessions.
We are continuing to promote Values & Behaviours recognition across Community Banking through our recognition methods.
Our 2017 colleague engagement survey scores showed an increase of 7 points in “good collaboration” and an increase of 5 points in “trust and confidence in our colleagues” compared to 2016 survey results. This shows great improvement and demonstrates that our initiative has set us on the right track in building confidence in our colleagues to better serve our customers brilliantly.
Key themes from the 2017 colleague engagement survey included improved open and two-way communication, improved management effectiveness and improved team work/ collaboration, which highlighted great progress.
Our Community Banking (CB) scores outperformed the UK High Performing (HP) norm in 2017, including the Employee Engagement Index (EEI) which measures colleague motivation, and the Performance Excellence Index (PEI) which measures colleague belief that LBG is committed to the delivery of excellent customer service:
EEI was 82 %, against 76% for LBG overall and 73% for the UK HP norm, showing we were leading the way in engagement.
PEI was 89%, against 83% for LBG overall and 75% for the UK HP norm, again showing we were leading the way in this area.
CB and LBG collectively showed strong results and improvements from 2016, with EEI up 5% and PEI up 3% at a Group level.
Verbatim Responses: “What one thing are we doing well to help us Build the Best Team?”
2017 Building the Best Team survey (colleague survey) – COMMUNITY BANKING demographic results
Men’s engagement score has improved from 2016, the gap between men and women’s engagement score has closed slightly since the last survey. Whilst BAME, disabled and LGBT colleagues are less engaged we have seen some great improvements in their engagement and are now all hitting the Group score, and exceeding the HBP target.
As a result of the successful launch of the behaviours in Community Banking, the effectiveness of our training sessions and the excellent feedback we received, our approach was adopted across LBG. We’re extremely proud to be supporting these positive cultural changes which are now making a difference to ways of working across the whole Group.
The roll out of the new leadership behaviours to senior leaders was so successful that colleague feedback told us there would be value in doing the same for our middle managers who made up a large proportion of our customer-facing management population. We have now just successfully completed the roll out of the leadership behaviours to this population.
Cultural transformation is a continuous journey in which we all have a part to play. We’ve learnt how to ensure our colleagues feel engaged and empowered to explore what cultural change means for them personally in order to harness the real business benefits. The most effective way of helping colleagues to do this is by learning from one another, having clear leadership and being innovative in the tools we use to fully embed this. Our people have taught us that we need to be innovative yet simple in our ways of doing things in order to maximise the value they’re able to add for our customers.
And the future looks bright…
We’ve just entered the third phase of our Group Strategic Review which reinforces our focus on investing in our people capabilities for the future with a planned 50% increase in colleague training and development hours. We need to continue to utilise our multi-channel multi-brand positioning combined with keeping on our current journey to become more agile and empower our colleagues. This will both drive their engagement and help them to continue to build customer trust, against a backdrop of continued and arguably increasing change and economic uncertainty.
Building resilience to help us face into whatever the future holds will be critical and the values & behaviours described in our nomination will give us a robust and future-proof platform to deliver for our customers.
We live in an age of experience where the way brands behave is a surer sign of their credentials and reputation than the advertising messages they put out, the quality of their products or the outlets they appear in.