“Most big banks have the tools and advantages to push the boundaries of their existing business models. And they’re certainly motivated. What hampers their progress is uncertainty about how best to build on core strengths to create sustainable outcomes.”McKinsey
Financial institutions know they need to change. They need to keep up with the digital growth. And they need to keep up with the evolving market that startups are disrupting. Their HR departments feel the urgency and know they need to drive the change. But what often remains blurry is what they need to do in reality to make things happen.
Yes, we need to steer this organization into the new direction – but what is the direction? What does the future of financial institutions look like in practise? And what does it require from people to actually get there?
I’ve participated in international cultural transformation projects. Both in big corporations and government offices. I have also experienced the rapid evolution of hyper growth startups. These two worlds have great differences, and each organization is unique. Each has its own characteristics and people. And yet there are a few common key things that make all the difference.
There are 5 ingredients for a successful transformation:
- Excellent leadership towards renewal
- Getting fresh points of views and expertise from outside
- Communicating a clear vision of the future and the need for change
- Having focused task forces from various departments solving problems to
- Engaging people and individuals in various ways throughout the change journey
HR’s value as driver, supporter and enabler in these areas is critical. But I know it’s not easy, especially in financial institutions. Security and stability are core to these traditional and respected organizations. And they are huge. Such a context is not the easiest when preparing for a change. And as in any change project, there are many obstacles ahead. You also need to consider legal obligations. And resistance to change. And bureaucracy. And peoples’ wellbeing.
How can HR make the magic happen?
I believe the key is having a structured change process, and acknowledging the areas where you need extra support. Being open minded and brave to explore.
Here’s where startup collaboration can help. Let’s take it point for point.
1. Excellent leadership towards renewal
It all starts here. Top management can better identify the right strategy by working with startups. Or find the right direction faster. Or explore more directions.
Startups have hands on experience of the different scenarios of future technologies. And they have it today. Startups also provide a practical view to different options for those technologies. And by working with them you get a better understanding of those technologies.
Through a better understanding of technology, you make better decisions. You also crystallise your strategy. HR can support the leaders throughout the organization towards the same goal.
2. Getting fresh points of views and expertise from outside
It’s natural: we get used to doing stuff in a certain way, and our ability to question things becomes more difficult. Sometimes we need an outsider to come and shake things a bit.
But you can do much more than looking from the side, trying to keep up with how startups work. You can welcome the entrepreneurial spirit inside the organization. You can collaborate with them, to get those fresh points of view a lot faster. People will be naturally exposed to new ways of working and can learn by doing.
3. Getting the vision and message through
Repetition, reminding and rituals: the 3 R’s of change management. Startups can also help HR get the message out throughout the organization. Many change projects have an abstract goal, that is difficult to make tangible. But empowering employees to work with startups, you create tangible projects. And those projects become the tangible output of the change.
When you collaborate with a startups, you end up meeting with them several times. And that acts as the perfect reminder of the change you’re trying to create. They can be a reminder of agility, new ways of working, interest for a new technology, or customer focus. They are often powerful examples, that make the benefits clear. Sometimes they are examples to imitate, and sometimes they are examples to avoid. But in all cases, examples help shift the mindset to new directions.
And of course, in some cases their technology helps you share the company’s vision. I wish we would have had back in 2010 the tools we have nowadays! Startups are also brilliant in this.
4. Having focused task forces from various departments solving problems together
In big multinational organizations, processes are slow. And you also often have to involve different departments, countries and expertise areas. This is one of the major challenges, especially for innovation projects. Approval chains accumulate, and that hurts efficiency and effectiveness.
One common approach to solve this is to build entrepreneurial task forces. Various departments (innovation, HR, legal, IT, etc.). work together, each expert shares their views, and get immediate feedback. But it doesn’t happen by accident: you need to make sure that you set up the team in an agile way.
Involving startups in these teams can enable an effective kickstart. They will push for a faster process, and for quicker decisions. People are less likely to fall into old behaviours. Meetings with the startup serve as gathering point for the different departments. It forces you to be agile by default.
And the best of all – for many, the main reason – you bring in the expertise of the startup!
5. Engaging people and individuals in various ways throughout the change journey
People learn in different ways but by far the most effective way of learning is by doing. In financial institutions, that can be risky and time consuming. By collaborating with startups, your employees can test new ideas fast and with less risk. And you can test them in real life, and with less fear of failing.
For a successful collaboration, you give ownership of the innovation to employees. You create change champions, who see and communicate the benefits. They involve individuals in different ways. They learn to take into account younger and older generations. They consider people’s different ways of adapting to change.
By working with startups, you prepare your employees for that role. And your organization can change faster, and in a more controlled way.
The key to collaboration is to combine the best practices from the past with the new ways of working. You will be on the right path towards renewal. By focusing on some core things, you walk that path with stronger change champions in your organization.
About Virpi Jalonen
I’m a Renewal Strategist and Modern Career Coach. I’m enthusiastic about #TheFutureOfWork, how it affects careers, and how it transforms organizations. I have 10+ years of experience in HR management, with various roles in international IT and gaming. I specialize in talent acquisition and engagement, building HR processes from scratch, ramping up organizations, creating positive working environments and making things happen.
Feel free to contact me – I’d be happy to continue the discussion!
What do you think are the most challenging areas to work with? Do you recognize the ingredients for success? How has your organization managed to solve the obstacles?