Culture As A Competitive Advantage With Siobhan (Shiv-wan) McHale

 

Having the right culture in your business gives you a significant competitive advantage. This notion is gradually being accepted into the mainstream and culture change has become a must for every organization. Ben Baker’s guest today is Siobhan McHale, author of The Insider’s Guide to Culture Change. Siobhan shares with Ben her experience of helping transform Banking Group Limited (ANZ) in Australia and New Zealand from the lowest-performing bank in the country into one of the highest-performing in the world. The key? Culture change. Join in the conversation and discover how you can instill a growth culture within your workplace to enable the delivery of your growth agenda. Dive in!

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Culture As A Competitive Advantage With Siobhan (Shiv-wan) McHale 

Welcome back to the show, everybody. Thank you for being such an amazing audience. Every single week, you email me at [email protected]. You connect with me on social media. You tell me what you like. You tell me what you want to hear. I love you for it. I love the fact you have been with me for 270 plus episodes now. Thank you very much for being part of this. I have another treat for you. Siobhan McHale from the DuluxGroup in Australia. I have another Ozzy with me. I know I get a lot of Ozzys. I love them. She is the Executive General Manager of People Culture and Change. She’s written a book called The Insider’s Guide to Cultural Change and is on the Thinkers50 Radar for 2020. This is a woman that knows culture and has done some amazing things around the world. Siobhan, welcome. I am so excited about this conversation.

Me too, Ben. I’m delighted to be here.

You are in Bellbird, correct?

Yes.

Give people a better idea, you just came back from a holiday time in Tasmania. I am absolutely jealous. I was supposed to be in Australia in 2020 and 2019, with all the speakers stuff going on. It never happened. I can’t wait to get down there and see the country. Maybe in 2022, I will be down there. I will be tapping on your shoulder. We will be able to go out for a drink or a cup of tea or something.

That would be awesome. Australia is a beautiful country. I have lived here since 1994. Originally, I’m Irish, which people might pick up from my accent and my name, Siobhan which actually means John, but it’s a Gaelic form of John.

Reframing is a powerful tool where you help people redraw their mental map of their role and its importance. Share on X

That is what I thought. I figured it was either Irish or Welsh. I wasn’t sure which one it was. What brought you to Australia? Let’s go through the history. Tell me a little bit about you, where you got the cultural bug and what brought you to Australia?

I grew up in Ireland. I was passionate about people and how people can be at their best and operate at their highest. I studied Organizational Psychology and spent the first decade of my career as a Management Consultant. I spent ten years flying across four continents, advising hundreds of leaders about how to create more constructive and productive workplaces. During that time, I moved to Australia with PricewaterhouseCoopers. I was working there at the time. I moved from London to Melbourne. After a decade of consulting, I was yearning for something more than. I wanted to roll up my sleeves and get stuck into change, get involved in leading change in organizations. I joined a series of international companies as the executive in charge of change. That’s the role that I speak from that insider role.

There is a big difference. I come from a marketing point of view, whether you are an in-house marketer or you are that marketing consultant that comes in the agency. It is a very different headspace. Tell me what took you from that PwC Consulting role headspace to sit there and say, “I want to work inside the organization.” What type of organizations excited you that took you from that consulting side to being somebody that rolled up your sleeves and wanted to be part of the change that was happening?

I was flying in and out of organizations as an advisor. That is a fantastic role. We do need external advisors who can have a different perspective on your organization. For me, there was something missing. After a decade of doing that, I thought I want to put into practice all the theories and the models and see what works. It’s one thing to tell people what to do. It’s another thing to lead that change and to make change happen successfully. One of the organizations I joined early on was a bank in Australia called ANZ.

We’re in zed. We’re part of the Commonwealth. We’re in zed. American friends, sorry about it. You guys are wrong. It’s not ANZ, it’s ANZed.

Over the course of seven years, we transformed that bank from the worst performing bank in the country, to the best performing bank in the country. The number one bank on the Dow Jones Sustainability Index. It was a remarkable transformation that became a case study at Harvard Business School used by Professor John Kotter. I talk about that in my book, The Insider’s Guide to Culture Change. It was applying a lot of the tools, a lot of the techniques and earning what works and what doesn’t work when it comes to organizational change.

You are a big believer in culture. That is where you come into. How did culture come into play, to take a bank from being one of the worst performing banks to being something that was extremely successful to a point where Harvard wants to do a case study on this? What were the insights that you came up with that enabled you to sit there and say, “Here is where the challenges are. This is what’s going wrong. Here is how we fix it?”

One of the key things during culture change is to see and diagnose what is going on in the organization that often we can become blind to. When I walked into ANZ bank, I began to pick up data. As soon as you walk in, you are picking up data. I walked into the foyer of the bank and I noticed the marble pillars stretched up to the gothic ceilings. They were beautiful plush carpets on the floor. The offices were bright and light field. The executive suites were massive, with beautiful sweeping views across the bay and Melbourne. That was the head office.

A few weeks later, I went to visit the branches. There were 700 bank branches. I noticed a very different image in the branches. The paint was peeling from the walls. The carpets were threadbare. Customers stood in long queues waiting for their query to get answered. When they got to the top of the queue, invariably, their question wasn’t answered. They were left frustrated and annoyed that the branch staff couldn’t seem to even answer the simplest queries. There were two very different worlds within the bank, the head office and the branch environment. What we discovered was a pattern are in agreement between those parts.

That pattern was that there was a pattern of blame. The head office said, “It’s your fault that the customers are unhappy to the branches.” The branches said, “No, it’s your fault that the customers aren’t happy.” This pattern of blame went round and round. It was running the company and leaking energy from the company. The branches were enrolled of order takers, waiting for the head office as the order givers to tell them what to do. Seeing this pattern was the first big step in breaking the pattern and changing the culture to be more customer oriented.

Unfortunately, I see this more often than not. I call it the mothership mentality versus the branch offices. Whether it’s a retail environment or their B2B organizations, there tends to be a dichotomy between what happens at ground zero at the central office, and what happens out in the field. I know that you have a four step process or four pillars that you work with them to be able to sit there and say, “I see this challenge.” You can see it from the outside very clearly. You can sit there and see that there is what is good for the goose is not good for the gander. How do you enable people from the inside, first of all, to see what the problem is and then work together to be able to fix it?

One of the key steps, I talked about this in my book is to reframe. Reframing is a remarkably powerful tool where you help people to redraw their mental map of their role and why role is important, you might say. If I can take a step back and talk about role, we step into multiple roles every day of our lives. You might wake up and you greet your wife, good morning in role of husband. If you have children, you step into role of parent. Your behavior changes in that role. You might drive to work or get the train to work in role of commuter. You go into work. You might step into role of boss with your team. Later on that day, you might have a meeting with your boss where you step into role of subordinates. Later on that day, you might have a meeting with some of your colleagues and you step into role of peer. After work, you might catch up with friends and step into role of friend or community member or churchgoer. Each of these roles, you have a different mental map of the role. That mental match shapes your behavior in a way that is just as powerful as personality.

Change the policies, processes, and procedures that scaffold the culture. Share on X

One of the things we used at the ANZ was this technique of reframing where we redesigned the operating model for the organization. We reframed the role of the head office, from order giver to service provider to the branches, providing them with IT services, HR, risk legal, etc. We then reframe the role of the branches from order taker to being service provider to the customer. They were in the role of making all of the decisions that would help to grow the business and maintain high levels of customer satisfaction, which is why it went from the worst performing bank in the country, to the highest performing bank in terms of customer satisfaction.

How to get people to understand that these rules need to change because you have an organization that has done the same thing for possibly decades? The relationship has gotten worse. The us versus them has gotten worse. The finger pointing has gotten worse. How do you take that type of organization and change it? It’s not just changing an individual, it’s changing the thought process throughout the organization. That has to happen from the C-Suite all the way down to the frontline workers that are servicing the clients. How do you go about bringing that change to bear? That is the real thing. I understand you are reframing the role. How do you get people to understand that the ship is broken and might sink, first of all, if nothing happens, and second of all, how to repair that ship in a way that is going to keep everybody on the ship and safe?

I was head of the Transformation Program for four years. One of the things that you learn is that it’s not about launching new values, that might be the start of the journey but often people think that is what you do, that is not the formula. It’s a series of interventions. That is why it took seven years to rewire that whole organization and to get better outcomes. One of the key interventions there was, we started with the top 600 leaders, culture change is leader led at all levels. We put them through a three-day workshop, which was about reframing and giving them the tools to lead this change. We then went through layer by layer, each layer of employees and put them through the same workshop until we had over 30,000 people who had attended the workshop over the years.

That was a very big investment in this cultural change program. I had a team of facilitators, coaches, and consultants who are helping different parts of the business to diagnose what was going on in their organization or parts of the organization and to make those shifts. It is about design. Firstly, seeing the passion and then reframing with a new operating model. Redefining the role of the parts, not just to be individuals, helps the organization to get on a faster change trajectory.

My first question is, when you are taking those 600 people, those initial 600 people, are you breaking them into teams of 10, 30, 50? How many people would you have to go through a cohort? You need to have a lot of conversation and a lot of engagement with those people in order to be able to initiate that change in mindset, especially when you are dealing with C-Suite. Would you put all the C-Suite together or have the C-Suite mixed in with other people within different departments? How would you even start that process?

There were different stages of it. The initial program was an individual intervention where people went to an event. There could have been 30 people at the event or 200 people. It was an event over three days. Phase two of the intervention was team-based work, where you work within your team on what were your business challenges. The thing with culture is it’s not about people feeling good. Generally, when you ask somebody how’s the culture, one of the things they will immediately tell you is about their engagement score. I say yes because what else is happening in the culture?

 

Culture can be about how commercial, innovative, consumer centric, strategic you are, how process driven and disciplined, etc. Culture is how the organization or the entity or the group operates or functions in order to achieve its objectives. It’s not just about employee engagement. At the ANZ, we measured our profits. Over the seven years, profits doubled. The share price trebled over that time period. The community engagement was so high that we became the number one bank globally on the Dow Jones Sustainability Index. Customer satisfaction rose to the number one bank in the region. Employee engagement also rose. That was one of multiple measures, not the only measures. This is one of my passions, that culture is more than the employee experience.

There is so much to unpack there. I want to clarify one thing before we go on. You are talking about initial three-day event. That’s the beginning. You have 60,000 employees, but it’s not like you put 60,000 people through a three-day indoctrination process and life changes. There is ongoing, follow up, different training, different scenario groups, different levels of communication that goes on for months, if not years, in order to be able to achieve that.

There is working on the mental maps. That is one aspect and the actions, but the other aspect is working on systems and processes. We had a whole series of projects that were aimed at changing the policies, the processes and the procedures, which scaffolds the culture. There is no point in saying, “We want to be more adaptive and more agile if you have bureaucratic processes.” One of the projects was called busting bureaucracy, where basically, we identified all the stupid rules across the bank, and decided which ones we could blow up and which ones we didn’t need anymore. You have to do both. You have to do the mindset and behavior work, and the processes and systems work simultaneously. The other key thing is that it wasn’t just done to people or done for people. One of the values that we launched at the bank was lead and inspire each other.

What we were saying is, each person within the bank is a leader. You are a leader no matter where you sit in the bank. How can you lead and inspire others? We had some group initiatives, but we also mobilized and galvanized people at a local level to see how they could break out. The whole program was called breakout, how they could break out of the old ways. We started to emerge local action and local examples of people doing amazing things to regain the respect of their communities and to reconnect with customers and their needs.

It sounds like a big part of this initiative was empowerment, empowering employees. If you had a position where the branches were seen as order takers versus the head office where the order givers, you are trying to change that dynamic in such a way that people at all different levels were empowered to be able to make decisions. Am I correct in those?

Yes. I would say it was a reframing. They were in role of victims. When you went to the branches, they said, “I can’t do anything because head office is making all the decisions. What can I do?” The reframe is, you are not a victim, you are a leader, and you have much power to change things within your realm. This new mental map of a leader, people started to think, “What can I do? How can I make a difference? What does a leader do within the branch? What could I step into now?” That reframing was a critical part of the success.

You’re not a victim. You're a leader who has so much power to change things within your realm. Share on X

I use the phrase that leadership is a mindset, not a job title. That is the one that tends to resonate with a lot of people. My question to you is along the way, you need to have benchmarks. How do you establish those benchmarks to be able to sit there and say, “This is where we are. This is where we want to be. These are the things that need to happen along the way?” How do we make sure we’re hitting our goals? How do we make sure that we celebrate both the wins and the challenges, learn from those challenges and move forward? I’m sure it wasn’t a straightforward process. I’m sure there was setbacks. I’m sure there were times where you wanted to bang your head against the wall, as we all do with these large change management projects. How did you go about getting people to, first of all, establish a set of key performance indicators and benchmarks and then be able to have people live up to expectations of making sure that those benchmarks were being met?

Cultural change is leader led and culture is an enabler of business strategy. My conversations around culture never start with culture. They start with where are you going as a business? What are your imperatives? What are your business objectives? Therefore, what culture do you need to enable the delivery of those objectives? For example, if I’m talking to a CEO, and he’s or she’s saying, “I want to create growth and expansion.” It’s okay. Tell me more about that. What are your goals? Where do you want to grow? How big do you want to grow? Therefore, you need a growth culture to enable the delivery of your growth agenda. As soon as you frame culture in that context, it’s not a sale. I get people saying, “How can I sell the culture? How can I make the executives want the culture change?” They are the leaders of the culture change. If cultural change is the enabler for the business imperatives, that is a no brainer.

We agreed with the executive team at ANZ what they wanted to achieve in terms of their business goals. They wanted to grow the business. They wanted to achieve certain profit objectives. They wanted a better customer satisfaction. They want a better employee engagement in service to the overall purpose of the organization, which was to serve the community’s banking needs. Therefore, the objectives, the culture measures fell out of that. Every year, we would measure where we were. We would take those measures back to the executive team and say, “How are we tracking? What do we need to change here? Is this on track with our aspirations? How do we need to shift on this cultural change journey?” Measurement is about business metrics and culture is an enabler of those business imperatives.

Is it an enabler or a driver of corporate objectives?

Yes. That’s a saying by Drucker, “Culture eats strategy for breakfast.” I often say culture and strategy are not competitors. They don’t eat each other. Culture is an enabler of strategy, not a competitor of strategy. You can’t have one without the other. If you want to achieve your strategic intent, you will need the culture that can deliver on those imperatives.

This conversation starts is imagine where you want your company to be in five years. Now, let’s see what do we need to do in order to get there? It’s not just meeting that number. It’s not just a financial number. It’s who do we want to be seen as an organization. What do you want your brand to be? How do you want people to talk about you when you’re not in the room? Culture enables that strategy to be enacted by getting everybody bought in. I’m a big believer of, if people are not bought in, don’t realize not only what they are doing, but why they are doing it, what they do specifically matters, they are not going to do it. How do you get people to understand what the company means at this time? They have heard 100 different platitudes and ways that employees matter. They have seen in a hundred different ways that employees don’t matter because of whatever peeling paint or no empowerment or whatever it is. How do you get the buy in of employees to sit there and say, “This time, we mean it. This is how and why you matter. This is where we are all going together?”

 

Often, culture is delegated to HR to fix. That is the death knell for the change. As soon as HR takes up the role of being the advocate and the persuader of the change, a lot of managers step out of the role. It’s downhill from there. Oftentimes, it’s HR trying to persuade people you matter and you count. Often, cultural change from my perspective, is not always about convincing people that they matter and they count. Let me give you an example. I was working at an infrastructure company where they were building bridges and maintaining big infrastructure plans, very big projects in the oil and gas sector, for example. One of the issues that the CEO had was that many of his big infrastructure projects were losing money. When we looked under the hood of why these contracts were bleeding money, the company was on the edge of going bankrupt, what we discovered was a big pattern that was running the organization, that was in its culture.

The pattern was what I call the nice guy pattern. Essentially, managers in the company had taken up the role of the nice guys and employees had taken up the role of the underperformers. Irrespective of what job they did, they were kept in the company, they were moved around to different roles and there were no consequences. This meant that the jobs were running late. They were running over budget. The deadlines were missed. The client wasn’t happy with the job and yet there were no consequences. That had huge ripple effects. This nice guy pattern was also playing out with customers. If customers asked for additional work, often they were given a freebie, and the work was done for nothing. The good relationship with the customer, we are the nice guys. We don’t want to charge them.

That was okay in a soft contract environment where you got paid in margin, but not in a hard contract environment where you had to manage within very strict margins and very strict agreed contract constraints. The company was being run by the nice guy passion. We had to see that passion and reframe the role of people within the organization, starting with managers to commercial managers. You are not the nice guy. You are the commercial manager and you need to manage this contract commercially. That reframe and a lot of work behind it led to the company within a year transforming its business. The chair said at the AGM, “We have transformed our companies.” They can happen quite quickly once you see and start to re frame people’s roles within the organization.

Teaching people that it’s okay to say no, but it’s how you say no. To be able to put yourself in a position that says, “We’d love to do this for you, but it’s an extra $50,000 in order to do that. Would you like us to go ahead?” It’s a mindset shift within a lot of organizations. I liken it to parents now, want to be their kids’ friends, not their parents. They don’t want to say no. They don’t want to be the bad person. They don’t want to be the disciplinarian. As a parent, that is what you signed up for. Sometimes your kids are not going to be happy with you, but you have to sit there and say, “How do we manage? How do we lead in these situations in a way that is going to not only make sure that everybody’s around for long haul, but everybody’s going to be able to fulfill a role?” I love that story.

It’s the simple seeing the patterns. It prompts me to share an example you are talking about parents. There was this couple. Let’s call them Ann and John. They were frustrated because their children were dropping their clothes and toys all around the house. The parents kept having to pick up after them. The parents were in role of the picker uppers and the children were in role of clothes droppers. The agreement to the pattern between them was, mom and dad will pick up our clothes and our toys. That was the agreement even though there were lots of complaints and arguments about it. That agreement was still running that family system. Until Ann and John saw the role that they were taking up as the picker uppers and shifted that role, that pattern would continue. By shifting their role from picker uppers to refusers, the dynamics shifted. Even within a family, you can see these patterns. You can see the power of changing roles. Patterns appear everywhere. They are in nature. They are in families. They also show up in our workplaces and yet, we don’t tend to see them. We don’t tend to diagnose them. They tend to run us.

I want to get into that because that is an interesting point. They will be valuable to people as leaders. How do you, first of all, recognize that you’re enabling behavior, and second of all, be able to modify it within situation? That is challenging. You have always done a behavior this way. You have always acted this way. You have always allowed certain things to happen. Negative behavior keeps perpetuating itself, how do you first realize that this is happening? Do you find that people are able to self-actualize this? How do you go about making those changes to make sure that it’s done in a way that enables long-term positive change?

We are wired and taught to look for single root causes. But behavior is not sitting in isolation; it’s connected to other behavior. Share on X

We are wired and taught to look for single root causes. We were taught to go back and see the cause of the noise, of the issue. Often in organizations, we are looking outwards. We are saying, “They are to blame. That is the issue,” rather than seeing the co-creation of where that behavior is being fueled from. The behavior is not sitting in isolation. The behavior is connected to other behavior. As a leader or was seeing oneself within that context and seeing how your behavior is connected to somebody else’s behavior, that’s a measure of skill. That is a rewiring of how we’re taught to operate. But if you start to think in that way, and operate in that way, you can be incredibly powerful.

There are so many examples I could give you, but a recent one at DuluxGroup where during the pandemic, we sell paint. People were stuck at home and painting a lot or painting and decorating their houses. We were very committed to getting them the paints that could help them to paint and renovation in these challenging times. We started to see our volumes increase. We started to reframe the role of our leaders. Our top 200, we brought them together and said, “Your growth and delivery leaders, you must deliver. That’s your job, delivery leaders.” Everybody went off. We noticed after that was that accidents and injuries started to increase exponentially.

We brought them all back together again. We started to explore what was going on here. In their eagerness to take up their role of delivery leader, they started tripping, having strains and causing themselves some injuries. We framed again to say you are a delivery leader with care. We just put in with care and brackets. Suddenly, we saw this trajectory of accidents plummet to give us the best year in terms of our injury performance ever. This is the power of reframing and seeing how our behavior was connected to their behavior. Not just saying they are just being careless and having accidents. What caused that? Maybe when we reframe that role, we had an unintended consequence so let’s reframe it again, but making sure we put in with care, so people know that they have to take care when they are in role with delivery leader. Just that one example shows you how you can intervene, you are always intervening, but what you put in has consequences.

That is a great place to leave this. When you sit there and reframe things, and you are able to reframe things in sometimes small ways, you can make huge differences within organizations. It’s a matter of simply going, getting people to understand what the true objectives are. What is necessary? What is needed? Where are we going? What needs to happen in order for us to all to get there? If we can, as companies, as individuals, as leaders, articulate in a way that people are going to listen to understand value, we are going to do better within our organizations.

Before I let you go, I’m going to make sure that people have access to your book. I’m going to make sure that people get in touch with you. Go to YourLivingBrand.live. It will all be there for people to get. It has been an absolutely wonderful interview. I have one question I asked everybody before I let them go. That question is this, as you leave a meeting, and you get in your car and you drive away, what is the one thing you want people to think about you when you are not in the room?

I don’t want them to think so much about me, but about them and how they can take up their change leader role to make the world a better place and workplaces better. I’m hoping that I have triggered in them some thoughts about how they can step more fully into their leadership role.

 

It sounds like you enable people to be better every single day, Siobhan. Thank you for being such an amazing guest. Thank you for all your insights. I can’t wait to re-read this. I’m sure I’m going to read it a couple of times and be able to take notes and get some gold every time I read it.

It’s been a pleasure, Ben. Thank you for speaking with me.

Important Links:

• Siobhan McHale
• LinkedIn – Siobhan (Shiv-awn) McHale
• Twitter – Siobhan (Shiv-awn) McHale
• Amazon – Siobhan McHale
• The Insider’s Guide to Culture Change
• DuluxGroup

About Siobhan (Shiv-wan) McHale

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