When a banker lends you an umbrella
Danske Bank case
New financial institutions with fresh business models and little history are popping up on every corner of the internet. Fintech firms have begun to offer new ways to provide money transfer services and online credit to customers and have thereby become direct competitors to banks; other businesses develop disruptive technologies that they later sell to the financial industry. No doubt, the competitive landscape of the money world can bring sweat to the foreheads of any traditional banker.
Henriette Fenger Ellekrog
Head of Human Resources at Danske Bank
When Henriette was a child, her biggest dream was to become a fighter pilot. She was very disappointed to find out that to women, this profession was off limits. However unfair the experience, Henriette says that in fact it taught her something important: to redirect rather than to come to a halt when faced with an obstacle. Today, Henriette says she would rather be working with people than being alone in a cockpit, but her love of flying remains unaltered.
What Twain said
American author Mark Twain reputedly said that “a banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain”. There might have been more than a grain of truth to this statement in past times, but for the Nordic-born banking giant Danske Bank, the winds of change are clearing the halls of old truths and ways of doing things, and bringing in a steely-eyed focus on the one component that drives all capital – people.
“We have been around for almost 150 years, so what we have been doing as a company has not been bad. Not all companies survive that long, but with the shifting environment, we need to change the way that we operate”, says Henriette Fenger Ellekrog, Head of Human Resources at Danske Bank. Today, she says, all financial institutions operate in a context of change. “Macroeconomics, customer expectations, digitalisation, disruption and competition are the five forces of change that set an entirely new environment for us to operate in”. With these five forces coming together at a previously unseen pace, Danske Bank has been pushed to rethink its operating model – only to discover that the key to future prosperity was in fact right at its doorstep.
Folks before finance
Dating from the 1870s, Danske Bank is no newbie in the banking business. The company currently boasts three million clients, ranging from private customers to big businesses and institutions, and it is present in 16 different countries. Danske Bank’s impressive tenure and its success in building such an extensive organisation are testaments to its inherent force – and a will to keep improving, pushing forward and avoiding becoming too comfortable. However, in such a huge organisation, turning the wheels in a new direction is sometimes a cumbersome process, and it is of pivotal importance to get things right from the very start.
“We needed to take a hard look at ourselves and say: are we organised in the right way, do we have the right capabilities, is the way that we work the right way, and so on”, says Henriette. She continues, “While most major banks have a good grip on digitalisation and economy of scale, we detected one increasingly important field in which we could excel – customer experience”. To get there, Danske Bank knew that the focus going forward would need to be on two closely intertwined aspects: people and culture.
From the inside out
The very first strategic step was for the entire management team to realise the influence they had on the direction the company was heading. If Danske Bank were to move in a new and different direction, the entire management team had to be living this change as well. Otherwise, the entire plan would fail.
“We asked ourselves: ‘How do we work on delivering the right culture, the right people? It’s a question of defining what it is that we want to achieve. One thing that definitely drives the culture is leadership, and we need to work with what kind of leadership will drive us in the right direction. Another driver is the performance model: who are the heroes in the organisation, who do you celebrate, what are the success criteria? Both in terms of the standard KPIs, but also the more hidden success criteria. Also, we need to look at the people that we bring on board and the kind of capabilities they have. Are they all men in their 50s with suits and ties, or is it also people with different kinds of experiences who bring about a much more diverse and agile workforce?”
In order to reshape its operating model, Danske Bank did not necessarily need to go through dramatic cultural changes, explains Henriette. But what the company did have to do was to define what kind of culture it wanted to achieve, and then get down to detail on what elements were driving this particular kind of culture. In this case, the main drivers were the leadership, the performance model, and, not least, the people and how they were organised.
No fluffy stuff
Danske Bank’s ability to execute on its strategy is what defines whether or not the banking giant is successful and becomes number one in customer experience, explains Henriette. This means that the right people need to be on board and everybody needs to work in the right way in order for Danske Bank to be able to execute. “Fortunately”, she says, “everybody gets that in the organisation, so there’s already acceptance in terms of saying: people and culture are not a part of the strategy, they are the strategy”.
Across Danske Bank, the shift to a more people-oriented strategy has been surprisingly well-received. “It has been a relief to many people to understand that culture isn’t something funny and fluffy or this very non-transparent or academic stuff”, Henriette says. “It’s actually very much hard-core work”.
While saying that people and culture are the strategy is easy enough, the actual implementation is where the challenges truly begin. “As a leader in this transformation, you need to be very stubborn and persistent when trying to get people to go in the right direction. There is a natural tendency to go back to old patterns or old habits. You need to find a personal drive in terms of actually engaging and inspiring people on this journey”.
At the start of the transformation, there are many low-hanging fruits to pick, but once you have taken the first step up the ladder, things start to get difficult and you need to augment the expectations and the deliveries. “I think it’s really important that we say what it is we are striving for”, emphasises Henriette, and continues, “the culture is not a goal in itself; it’s a means to an end and that end is delivering on being number one in customer experience. When I’m asked: ‘How can you measure that you’re successful?’ and ‘When do we have the right culture?’ I always answer, ‘When we’re number one in customer experience’. I can’t measure it by having satisfied employees or great leaders, if we are not delivering on our overall objective”, explains Henriette.
Tasting your own medicine
In Henriette’s small part of the big Danske Bank organisation, in which much of the strategy work in fact originated, the change was especially tangible. “We had a small project meeting in HR, halfway down the road, where we sat down together and realised that we were actually scared of moving forward. We had a feeling of ‘Oh God, we’re going to shake things up and take a very daring step’, and that was very difficult for us”. However, with this realisation, Henriette and the rest of the HR team became wiser on what the large-scale change process would demand from the rest of the organisation – but also on the rewards that lay ahead. “We realised that this is the change process that we’re telling the rest of the organisation to join. It was a very good experience to feel on our own body that this was an audacious task to take on, but when we did it and dared to take that step, we realised afterwards that it was the right step to take. Even though it was hard and perhaps difficult to imagine where it would end, we could see that it was the right thing to do and that really inspired us to carry on”.
Henriette explains that in HR, things don’t fall into neat professional boxes. Instead, they go cross-organisationally and cross-processes. And same as in the rest of Danske Bank, the operating model in the HR department has been fundamentally changed by bringing in new competences; people with analytic skills, process skills, project management skills – and not only the traditional HR profiles.
Keep the umbrellas open
Gazing into the future, Henriette does not see an immediate end to the journey that Danske Bank has embarked on. Significant workforce changes are coming, the labour market is still changing and so is the workplace. Also, she adds, the constantly changing outside environment makes it increasingly important to keep close to your customers. “We need to adapt”, she says. “Our customers will experience this in terms of new ways of interacting with us”.
However, Danske Bank’s main emphasis, people, will remain a cornerstone to success in a digital future as well. The banking giant will keep on sharing its umbrellas and work hard to keep a close connection with its customers – come rain or shine. Because, as Henriette puts it, “in the future, everything that can be digitised will be digitised, but then what cannot be digitised becomes even more important”.