In case anyone hadn’t noticed, there’s a banking Royal Commission going on in Australia right now.
We’re loving it, because it’s providing some fascinating case studies on the links between corporate purpose, vision, strategy and business planning and what can happen when any of those links are broken.
Here’s one of them.
Around about the time the Commission’s hearings got underway NAB CEO, Andrew Thorburn, wrote an open letter to customers, staff, shareholders and the community at large.
In it, he included something of a confession...owning up to the fact that there were occasions in the past when the bank had not done the right thing by customers. We doubt there was any need to “fess up” but he did.
We think he's stumbled across that needle in the haystack.
NAB has a corporate purpose...who knew?
What particularly captured our attention in the letter was the reference to the NAB’s corporate purpose: “to back the bold who move Australia forward”. Apart from the fact there’s some room for interpretation as to who “the bold” are, it’s a pretty neat, aspirational, business purpose.
And a vision...
NAB’s vision, articulated in the 2017 full year results presentation, is to be the most respected bank in Australia and New Zealand.
And a strategy...
Checking out the NAB website and results presentation, you gives a bit of a feel for the bank’s strategic direction. It seems to focus on customer satisfaction (tick) and a focus on growth segments (tick), employee engagement and culture (tick), and return on equity along with cost to income numbers (also - kind of - tick, though we constantly argue that the numbers are outcomes of everything else that goes on in a business. Any business…not just banking).
That's great...isn't it?
At first blush the purpose, vision and strategy seem to hang together reasonably ok. As we said, the purpose feels aspirational (and even a bit motivational).
The vision, maybe a little “meh” and not time-bound in any way so that leaves things well and truly open, but it’s ok.
And we suspect NAB’s strategy documents run to hundreds of pages, so to say we’re scratching the surface here is a major understatement. But it gives us enough of an idea about the bank’s strategic priorities.
What's the issue?
Where things seem to have come unstuck for NAB is in the execution. Certainly the corporate purpose and the vision appear to have gone missing. And one leg of the strategy - all about the numbers - has taken priority (at least that’s what it looks like from the outside looking in).
The question for NAB is where to from here.
The CEO has put NAB’s corporate purpose out there on public display. Will everyone remember? Maybe not everyone, but plenty will - especially staff, probably a proportion of the customer base, maybe a few shareholders and possibly the odd member of the community.
Effectively, he’s invited stakeholders to hold the business accountable to that purpose. He probably didn’t mean to do that but he has.
If there’s a serious belief in the stated purpose, it needs to be at the core of communications both internally and externally. For example, it seems that NAB’s favourite marketing tagline right now is “more than money.” I don’t recall seeing the “backing the bold” statement anywhere.
“Backing the bold” should be rather more clearly referenced in the vision statement, and the strategic plan.
It's all about the people.
Ultimately though, "backing the bold" can be given most life by making it front and centre during the business planning process in every nook and cranny of the bank. From Board to Branch and everywhere in between.
We’re willing to bet very few folks in the organisation (if any) have ever asked how any initiative identified during business planning would help give life to the purpose of backing the bold who move Australia forward.
Wouldn’t it be great if employees could feel empowered to ask how selling 100 home loans next month is going to move Australia forward? Providing the right home loan solutions to the right applicants on the right terms might be a little more “purpose-friendly”. It’s just one example, but you probably get the drift.
Every team member must be encouraged to ask how what they're doing today, and will be doing tomorrow and into the future helps "back the bold who move Australia forward".
NAB has an opportunity - it just needs to be recognised.
Benjamin Franklin is credited as saying “out of adversity comes opportunity.” It’s clear that NAB (and all the other banks) are currently experiencing a fair slab of adversity.
Andrew Thorburn has created the beginnings of an opportunity by putting NAB’s purpose well and truly in the public domain.
If he'd consciously gone looking for an opportunity that offers so much upside, he'd have been searching for the proverbial needle in the haystack.
Whether the bank can capitalise on this opportunity remains to be seen but if it can, it’s just possible it can position itself well ahead of the competition.
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