Agefi Luxembourg - mai 2024

Mai 2024 35 AGEFI Luxembourg Droit / Emploi ByChristinaBLOCK andChristianvonSCHIRACH, zeb consulting* W hat drives companies’ performance and success?Howdo theyknow whohas todowhat?Whatmakes employees strive for the ongoing success of their company? When we think about levers of success, we usually talkabout “restructuring” – inotherwords, adapting structures to achieve goals better or enhance perfor- mance.Wealsoregularlyworkonnewstrategiesthat describe exactlywhat is to be achieved inwhat time. Ofcourse,newstrategiesalsoplacenewdemandson thestructuresoforganizations–beitaholisticadjust- ment or area-specific structural changes. Transformation of collaboration and leadership The right strategy and structure are undoubtedly necessary and form the basis for success. One ques- tion, however, that still too few organizations are askingthemselvesinthecontextofstructuralandstra- tegic adjustments is this:HOWdoes theorganization intend to achieve the desired adjustments?A regular review of strategy and structure is common practice in companies. But the question of “HOW do we achieve these goals?” is asked far too rarely. New structures and strategies require new forms of collaboration and leadership. In this context, we are not only talking about adaptability in structural and systemicterms,butalsowithregardtoimplementing the strategy (or structure) quickly, smoothlyandeffi- ciently. This involves employees, teams, and mana- gers. The reason is clear: only those who adapt their strategy with foresight and then manage to imple- ment it quicklywill be successful in the long term. The key to successful implementation undoubtedly lies incorporate culture. It affectswhether employees participateactively,thinkoutsidetheboxandarewil- ling tochange.However, it alsoaffectswhether resis- tance will slow down – or even block – the imple- mentationprocess. Theway inwhichemployees col- laborate and interact determines the success or survi- val of the company in the long term. The best strategy is therefore only worth as much as theculturewhichservesasthefoundationofitsimple- mentation. If a company succeeds in turning employees and teams into fans of the strategy, they will achieve the full potential of their performance core. If it fails or does not fully succeed, performance blockerswillhinderimplementation.Buthowdoyou recognizepotentialandtheperformancecore,butalso performance blockers? The latter often do not arise in systems (e.g., target systems),butratherbecauseofthewayinwhichpeo- ple collaborate, i.e., how they interact. What is there- fore required is a scientifically sound measurement modelthatidentifiesperformanceblockersinthecul- tureandbasedonthis,atried-and-testedtransforma- tion concept that reliably aligns different cultures within the overall organizationwith the success-criti- cal components of the target culture. Strategy as a guideline for culture The corporate strategy sets out howthe bank intends to move towards the goals it has set itself. Culture – andthuscollaboration–isthelubricantinthestrategic gears of the company, the importanceofwhich is still frequentlyunderestimated. Customerorientationandcentricity,forexample,will beapermanentgoalinalmostallbanks.Toachieveit, the strategyprovides guidance regarding the charac- teristicsofcustomercontact.Obviously,theefficiency, simplicityandspeedofprocessesareparticularlyrele- vant. However,manyyears of zebproject experience also show, especially in the dimension of customer orientation, that – both from the customer’s perspec- tiveandintermsofresults–teamscanachievehigher and better performance together than if everyone “goes it alone”. Customers were more satisfied and actively sought contact with relationship managers more often when teams jointly set specific goals in linewiththestrategyandwhentheyreportedpositive collaboration. The culture of a bank is therefore not just a “soft” aspect, but a decisive factor that affects the implementationof the strategy. A culture that encourages innovation, flexibility and risk-taking can respond better to changing market conditions,whichinturnisconsistentwithastrategic focusongrowthordiversification.Controllingculture is thereforenot anesotericoption, but systematic, tar- getedmanagement. The performance core: psychological safety Psychological safety refers to employees “daring” to express their opinions and asking questions without fear of negative consequences. Particularly in an industrythatisheavilyinfluencedbyriskassessment and decision-making, psychological safety plays a crucial role andhas a significant impact onemployee behavior and performance. For example, if a culture promotestransparencyandcollaboration,employees are more likely to share information andwork toge- thermoreeffectively.Measuringpsychologicalsafety regularlybasedonscientificfindingsandideallycom- paringitwithrelevantbenchmarksisthereforealogi- cal consequence. The correlationbetween psychological safety andperformance In banks, the ability to generate innovative ideas, manage risks and communicate effectively is of fun- damental importance. Psychological safety creates a space in which employees canmake full use of their expertisewithoutfearofnegativeconsequences.This not only promotes individual performance, but also strengthens teamdynamics andcollaboration. Banks arealsoparticularlysensitivetorisks.Theriskculture, which influences theperceptionandcommunication of risks and how they are handled, must be in line with the bank’s strategic orientation. A culture that promotes an open discussion about risks helps to ensure that employees learnmore actively frommis- takes and that they implement the risk strategymore effectively. The three layers of the zebmeasurementmodel The zeb.culturemodelmakes it possible tomeasure whether a culture supports and promotes strategy implementation. Overall, a measurable culture helps to ensure that the implementation of the stra- tegy is not just anabstract concept but becomes visi- ble in concrete actions and results. By integrating measurable elements intoabank’s culture, theorga- nization becomes more resilient, agile, and better equipped toachieve its strategic goals. The zebmea- surement model is based on three relevant layers, the content of which is adapted to the strategy as required. However, the structure of the three layers is always the same. Psychological safety is at the core – therefore it is also known as the performance core. Insufficient psycho- logical safety is the biggest performance impediment for organizations, employees, teams, andmanagers – it can put the brakes on collaboration and leadership quality.Alackofpsychologicalsafetymeansthatmis- takes are swept under the carpet. It creates a lot of negative atmosphere and energy in teams and the entire organization – rumors are spread, people talk more about eachother thanwitheachother. This can alsoleadtodysfunctionalcollaboration,i.e.,infighting within the team. If the core is “out of kilter”, then this is always the first andmost important field of action, as it stops teams fromworking ina targeted, i.e., stra- tegy-oriented,manner. Duetotheirdifferentareasandfieldsofactivity,banks alsohavedifferentrequirementsintermsof,forexam- ple, innovation or the way mistakes or risk aspects are dealt with. However, the performance core, i.e., psychological safety, is relevant for any orientation. Around the core there is another important layer to describe the “HOW” of an organization and to iden- tify performance blockers. This layer describes what motivates people in organizations – including the motivationof individuals, themotivationand impact of leadership behavior and the motivation arising from teamwork. Psychological safety is closely inter- linked with these aspects. Performance and impact arise from the interplay of individual motivation, the formof leadership and teamwork. At the same time, these components are also relevant for the depth of psychological safety. Most performance blockers are found precisely in these two layers. If these are “out of kilter”, targeted work is disrupted. A typical phenomenon can be observedtimeandagaininprojects:Ifateamishighly motivatedbutperceiveslittlepsychologicalsafety,the team does not gain traction. Performance does not become visible. Only when psychological safety is positively influenced does the project team achieve its full potential. The outer layer contains the strategic goals that the organizationwantstoachieve,suchascustomerorien- tation, ability to innovate and change, and results orientation. This outer layer must be developed in a verytailoredmanner,dependingontheguidingstra- tegy. It enablesus toanswerwhether teams are really alignedwiththestrategyandcansupportitinamea- ningfulwayorwhetherteams,employeesandmana- gers are focusing on the “wrong things”. We often identifyblockersthatlieatthecore,i.e.,thatarerooted in leadership or motivation. This leads to working time being spent on resolving conflicts or finding “special solutions” to avoid conflicts. Ultimately, it is a waste of performance and efficiency that could otherwisebeusedinthetargetedsupportandimple- mentationof strategically relevant topics. A transformation approach based on this model aims to eliminate the internal performance blockers – thinking fromthe insideout. Indoingso, apositive culture and collaboration can be aligned with the strategic goals. In addition to the three-layer structure shown above, thestepofgaininginsightsfromresultsisparticularly challenging.Whatgoodisavalueinasurveyifitcan- notbeputnexttothevaluesofparticularlysuccessful companies? The zeb measurement model therefore not only provides a scientifically sound structure for greater success. It alsoprovides a database of around 70,000datarecords.Dependingonthedesiredbench- mark,acomparisoncanbemadewithregionalbanks, large banks, insurance companies, but also with industrialcompanies–andnotonlyinrelationtoove- rall results, but also toeachspecificquestion.Onlyon this basis can a bank’s performance be systematically raised to the level of “the best”. Themeasurementmodel can therefore provide clear implicationsastowherethingsare“outofkilter”and which cultural fields of action act as performance blockers, hindering strategy implementation. It is important to precisely solve these problems so that activitiesandworkingtimecanonceagainbeusedin a targetedmanner. Conclusion: culture has strategic impact If the corporate culture is seen as the lubricant of the company, as described above, common employee surveys regularly fall short. Attention is generated by both simple and elaborate means without having any impact in terms of strategy. Effective support for the implementation of a stra- tegy requires a scientifically sound approach ins- tead. In this context, “sound” should be taken as a synonym for “well-founded”.After all, science lays the foundation on which a simple and attractive analysis platform is built for a company’s employees. Last but not least, benchmarks are akey success factor for working on the corporate culture in a targetedmanner, i.e., in line with the strategy. *zebconsultingisastrategy,management&ITconsultancyspecializing in financial services in Europe. For more information, visit our website www.zeb.lu Culture and strategy in banks as keys to success? s f u Déco vrez le orma HEC Liège en Financ SITE WEB www. hec.uliege .be Masters en sciences de gestion et en ingéneur de gestion à fina en Banking & Asset Management, en Financial Analysis & Aud Engineering Masters de spécialisation en horaire décalé (Analyse, Contrô Sustainable & Climate Finance ; Fiscalité générale ; Douanes/C Formations et certificats en Executive Education tions e lité spécialisée it, en Financial le et Révisorat ; ustoms Compliance) CONTACT hec@uliege.be ©Getty