Working with financial services firms from across the industry, I rarely run across a problem that can be solved by keeping things the same. It always requires a change. Sometimes it’s just an approach the bank takes to the problem, but often it involves a change in the tech stack, staffing mix or product menu.
My team is responsible for asking the questions that will prepare leaders in our industry to solve for their immediate source of pain at the same time they get better at predicting the future so they can prepare for it.
Where does the institution need to be technologically to meet the changing needs of its customers? What IT staff will be required to get there? And, of course, what specific technologies will be required and how will they be implemented? These are questions that we seem to always be asking.
It’s the way the institution chooses to answer these questions that set them apart from their peers. That, and the way they manage the change their answers prescribe.
Choosing the new tools
I’m very excited about some of the next technologies we’re seeing brought to bear on the challenge of delivering financial services to consumers. In many ways, we are fortunate to have so many new tools and options that are breaking down barriers and finally leveling the playing field for all Americans.
New technologies like Blockchain, Artificial Intelligence, Robotic Process Automation, and Machine Learning are quickly becoming the fundamental building blocks organizations will use to achieve their business goals in the future. These technologies offer impressive benefits and expand the capabilities of institutions in ways that are still coming to light.
Even less complex innovations, such as smart contracts, hold great promise for our industry. Soon, bank IT departments will have even more choices. Today’s leading executives are tasked with evaluating all of these tools and deciding which will come next for their institutions.
Fortunately, these executives have never had it better. But a wealth of choices brings its own challenges. Choosing between them can certainly be one of these, but the biggest challenge for most institutions is getting the implemented tools adopted. This is all about managing change in the organization.
The hard part of preparing for the future
Determining what should come next is not the hard part. Not if you know what to look for. Implementing new technologies effectively isn’t really that challenging either, if you have the right implementation team.
The hard part is managing the change process in a manner that ensures adoption. Without adoption, no technology initiative — or any kind of initiative for that matter — can possibly succeed.
It’s hard to find a bank that hasn’t experienced bitter defeat at least once when a new technology was implemented at great expense and after many hours of labor only to fail to get adoption from the bank’s staff.
Adoption is only possible when the bank’s staff has been conditioned to accept change, has been well-prepared for the new process and trained on the new technology. Even then, an important initiative can fail if the staff doesn’t understand why the change is important to them.
In fact, I have found that focusing on the choice of technology at the expense of managing organizational change is one of the biggest mistakes that institutions make. It’s not really about the specific technology at all.
There are many tools that can deliver similar results if properly configured and integrated with a bank’s legacy platforms. What really matters is finding the right technology stack that will deliver the business capabilities the institution needs and then preparing the bank staff to use these new tools to deliver products and services effectively.
We tend to focus most of our energy on the front end, seeking out solutions, vetting vendors, forging contracts, and implementing. Those are all important, but too often they leave management with little energy to focus on the most vital element of change management: adoption.
Effect change is culture-dependent
One of the reasons change management is so difficult is that most managers don’t know where a willingness to change comes from. How does a person find the courage to face a changing world when they may have only just figured out how to succeed at their job in the world they are being asked to leave?
One thing we know is that change scares people. It introduces risk that threatens to undo all they have worked to achieve, to make them suddenly incompetent in a job in which they previously excelled. Change at work is among the most unsettling of circumstances.
You cannot browbeat a person into willingly facing change. Even leading people into change cannot erase the fear and loathing with which most people approach something new at work.
But it can be done. Over the years, I have found that the cultural aspect of change management has been severely underplayed. In all of the articles that have appeared promising to help management affect change, few if any have touched upon the fact that the culture of the organization is the single most critical factor.
When company management holds onto the status quo as long as possible, in an effort to save time and money while limiting the institution’s risk, it signals to the rest of the company that change is not a good thing. Despite this, few organizations realize how desperately they need to change. When they finally do realize it, it’s either too late or brings with it a great deal of pain and expenses because management held on to the old way for far too long.
People notice this. They notice how management deals with people who can’t learn new things quickly enough to satisfy the institution’s customers. They see how quickly management will replace older workers with younger, tech-savvy staff members to maintain production levels — something that is incredibly difficult to accomplish during a platform change.
The cultural factors, more than anything else, will determine how effectively the institution can manage change and how successful any new technology initiative will be.
Creating a change-friendly culture
Banking executives are coming to understand the impact their culture has on the success of their new technology initiatives and how they can enhance their culture to achieve higher levels of success.
There is no tool the bank can pull off the shelf that will instantly create a change-friendly culture. But there are actions that when consistently taken will broadcast management’s attitude toward change and support for employees who are undergoing the change process.
In my mind, this starts with an assessment. Without knowing how current employees feel about the company’s position on technology and change, it’s very difficult to know what needs to change to achieve success. Surveys, roundtable discussions and one-on-one interviews will bring this information to light.
The development of technology and process roadmaps has been a very helpful tool in helping staff understand where the bank is headed and how they can keep pace with the changes that will result. This suggests that innovation, something some have described as the art of catching lightning in a bottle, is really more a science focused on careful planning and expert project management.
When people can see the map and the plan the bank will use to get there, it removes much of the fear that is the byproduct of uncertainty.
Any study of the leading banks will show that there are many more elements that must be considered when creating a culture that normalizes change and champions those who embrace it, in spite of the nagging fear that is the constant companion of uncertainty. But starting with the elements described in this article will help any institution.
Keith Kemph is President and CEO of BlackFin Group, a management consulting firm serving the Banking and Mortgage Industries. He leads a growing team of industry consultants and can be reached at [email protected].