The Power of People in Digital Banking Transformation

The Power of People in Digital Banking Transformation

          
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The Power of People in Digital Banking Transformation

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  • Lesson One: Teach Digital to Business Leaders and Teach the Business to New Digital Leaders—at Scale

    With digital transformations, as with other transformations, the CEO needs to own and shape the overall vision and to clearly communicate it internally and externally. “Banks don’t need a head of digital—that’s the CEO,” says Brett King, the CEO of Moven.

    CEOs are expected to get the entire top leadership team, including members of the board and the C-suite, moving in the same direction and speaking with a common voice. And the first step in doing so is to clarify who owns the agenda. With digital, in particular, that can be challenging. Executives from disparate business units and functions rush to take action and do the right thing, but a lack of coordination ultimately means that no one has clear responsibility for the overall agenda.

    Nevertheless, once the CEO has managed to align the top leadership team and establish responsibility for the agenda, management can begin spreading the digital vision throughout the organization. This, however, is where things get especially tricky. What differentiates digital transformations from other leadership alignment challenges is that CEOs often must mobilize management to march in an unfamiliar new direction—one that both reinvents the customer journey within the core business and builds capabilities to create new, disruptive digital business models—without, as the saying goes, knowing what they don’t know. Rarely do senior leaders have the expertise about the digital world that they need. They may have heard of PayPal and Apple Pay, but they may not necessarily have a deep understanding of the newest fintech players and technologies. Such executives must be brought up to speed quickly.

    Getting to that point requires a new approach to leadership development. In addition to developing existing leaders, companies need to inject new digital talent into the organization and provide training in the business.

    Some leading organizations have deepened their existing executives’ understanding of technology through tailored digital leadership and immersion programs that encourage learning by doing. Effective digital leadership-development programs typically include experiential and other novel learning methods, including attending digital road shows, which display the latest digital technologies; conducting digital immersions, including visits to digital hotbeds such as Silicon Valley; building real-world applications through rapid prototyping, testing, and development—or sprints; and engaging in business simulations and interactive scenarios. (See Exhibit 1.) The programs cascade at scale throughout an organization as leaders teach leaders.

    exhibit

    Other companies acquire digital talent externally, hiring senior executives with deep technology expertise and outstanding business acumen and then teaching them their business. BBVA, for example, aggressively sought out and hired external senior leaders in 2015. One of those recruits was Javier Escobedo—the new head of e-commerce, marketing, and brand management—who came from Expedia.

    Effective organizations cultivate a better understanding of the core business through a comprehensive on-boarding program in which C-level executives give new digital leaders a holistic orientation about strategy and future priorities. They also make sure that new leaders have close and regular engagement with business unit leaders, such as by jointly owning a pilot project and results.