How Culture Change Fuels Digital Transformation: Lessons From Westpac New Zealand

As most any business leader will tell you, change can be tough. Leading change in large, established organizations can be downright painful.

This shouldn’t be surprising. Well-established organizations have developed a certain level of cultural “inertia”—a certain way of doing things that have served them well for many years. And this may be all the more true in heavily regulated industries, like banking and finance.

Despite this inertia, however, digital technology is making it increasingly unrealistic for these stalwarts of the old guard to argue for business as usual. Think about it. How many interactions with brands today are not conducted via some sort of digital communication? Apple’s old catchphrase, “There’s an app for that,” is humorous because it’s true.

Technology is certainly disrupting everything from how we grab a taxi to how we get our groceries. There isn’t a corner of our lives that technology hasn’t, or soon won’t have, made its mark.

Given this profound environmental shift, forcing organizations large and small to rethink the fundamental way they serve their customers, more and more organizations are following in the footsteps of tech firms by adopting a DevOps way of working.

But how are these large, established corporations able to adapt and evolve to compete in this new and rapidly changing business environment?

One bank, Westpac New Zealand, is doing just that.

Leading Change in a 150-Year-Old Bank

I had an opportunity to spend some time with Dawie Olivier, CIO of Westpac New Zealand, to understand how he and his team have begun this kind of cultural transformation in a bank with a 150-year history.

“We started with the fundamental premise that every day at work doesn’t have to suck,” says Olivier.

Olivier, a congenial, former naval officer, shared that even in the highly regulated world of finance if companies are able to show that they are better able to stay compliant as a result of DevOps because they are able to catch and resolve issues much more quickly, stakeholders are apt to get on board.

So, if you’re a leader in a highly regulated industry who is interested in evolving your organization’s culture to meet the demands of today’s consumers, here are a few tips from my interview with Olivier at the 2016 ChefConf in Austin:

1. Understand the value that rapid iteration brings to your success. And bring your stakeholders along for the ride at each step of the way to reduce friction and misalignment. This involves actively educating your stakeholders about why your approach speeds up the company’s ability to deliver to customers and clarify that this velocity isn’t a risk to compliance. Rather, it’s a way to catch issues and correct them much more quickly and efficiently.
2. Include more than just dev and ops. At Westpac, teams now include stakeholders external to tech entirely, incorporating legal and others into the fold throughout the process. This ensures that they are aligned and are able to identify and address challenges before they have a negative impact on performance.
3. Identify the passionate people. They may be different than the “loud” people in your organization. Olivier established an approach whereby he and his leadership team were able to encourage those passionate people to rise from within the ranks. “We went through a stringent process of separating noise from true champions.” These champions were willing to give it their all in the spirit of moving the organization to a DevOps work style. The challenge is knowing when someone is passionate to move things forward and when they are just vocal for the sake of being vocal.
4. The power of self-organization. Empowering work teams to try out different ways of organizing themselves to accomplish work allowed for learning and iterative changes to be made. This helped people accomplish their work more quickly and easily.
5. Take time to learn from others who are doing what you’d like to do. When evolving the way in which your organization operates, you’re likely not the first group to have tried the same thing (DevOps is a case in point). While you may find that the way you wind up working looks slightly unique, but there is a lot of value in learning how others have approached their culture change efforts. Adopt what works for you and pass on what doesn’t.
6. Use crowdsourcing principles to include more people in decision-making. Olivier explained that the leaders on his team had to learn new behaviors in order to foster and sustain a new culture of employee ownership. “I’m extremely passionate about crowdsourcing. About empowerment. About ground up creation that is not leader-led, only leader-facilitated. Every time a concept or behavior came up that people liked, we took it to the floor, gathered feedback, and brought it back to the table.” This required leaders to stop trying to run everything and take a step back. They needed to acknowledge that the teams likely knew the right answers already. Now, meetings often consist of the staff presenting on topics that the crowd has deemed most important in moving the organization forward. This represented quite a significant shift from how business had historically been done.

Indicators That Your Change Efforts Are Working

1. It’s apparent in the stories people tell. Change is visible in both on-the-ground behaviors and in the stories people tell across the organization. “We facilitate storytelling sessions all the time,” Olivier shared. One engineer told the story of when she was young, she loved working in a record store, immersed in music and surrounded by people who loved music. She went home every night having loved every second of her day. But, she now felt as though she found her new favorite job at Westpac. “These stories start proliferating and that’s when you know the cultural change is taking root.”
2. Your aspirations start boxing with reality. “Once people start defining what their aspirational behaviors are, they begin to point out what mechanical behaviors exist that make those aspirations impossible,” says Olivier. “Someone might say, ‘When we discussed empowerment, and we discussed the fact that we get to make decisions, this is not what that looked like in our minds.’ So quite quickly you get the aspiration boxing with reality.” As leadership, you have to respond to these concerns. Give your people the behaviors and tools that let them act in the way that they aspire to act and feel.
3. Engagement flourishes. Over time, the team at Westpac began testing the new rules of working together. And once they came to realize that leadership was serious, and it was a safe environment to try out new behaviors, engagement soared.
4. Countercultural behaviors start getting called out by people in the organization. One sign that the values and norms of the culture were evolving was when Olivier observed staff members providing feedback to others when they began to exhibit “old” behaviors. This was the point where he knew that the team was owning the new ways of working and they truly valued them.

A little over a year into the transformation, Westpac New Zealand has gone from a last resort technology employer to where “We have people who left and want to come back, and our agents are fielding direct requests to specifically join our team,” says Olivier. “Those are the real signs that the culture change is working.”

Westpac New Zealand was also awarded the Best ICT Culture award at the CIO Awards in June of this year. An award that is nominated and awarded based solely on crowdsourced input from employees themselves.

One of the most important elements of any large-scale change effort is getting buy-in from your people. “Most often unleashing new tools or methodologies is done without laying the groundwork first,” says Olivier. The danger is, your stakeholders don’t yet understand why this methodology supports their aspirational behaviors.

I haven’t met an organization yet that hasn’t wanted to increase velocity and performance. But, as Olivier so eloquently stated, “Velocity is an outcome. The fuel that makes that work is culture.” Westpac’s change journey serves as a powerful example for all organizations—even those in highly regulated industries—of the critical role of culture in driving change in the right direction.

This article originally appeared on Forbes.