What can we learn from the CBA?

Updated: Nov 1, 2019

If you live anywhere in Australia you have no doubt heard or read about the problems with the Commonwealth Bank (CBA) and the enquires (Prudential & Royal Commission) that followed.

Now the APRA Inquiry specifically into CBA resulted in the following 3 Key focus areas:

• Governance – how decisions are made and implemented

• Accountability – the way staff, individually and collectively, fulfill their responsibilities and the consequences of not doing so.

• Culture – norms and behaviours for individuals and groups within CBA that determines collective ability to identify, understand, openly discuss, escalate and act on the current future challenges and risks.

The Royal Commision also called out failings in culture and governance along with issues with regulators across the whole Financial Services Industry.

Governance, culture and accountability apply to every company and while the problems they cause in each company may not be to the same extent or impact as with CBA, they none the less have significant impact on performance, morale, service and results.

From a change point of view there is a significant amount of change to be made across all levels and all departments of CBA. That's a lot of people just within CBA to mobilise and engage in change, which will take years to fully implement and embed as the 'new normal'.

The good news for CBA is that the two inquiries identified some key areas for them to address so they know where to start from a process improvement point of view. They identified some of the behaviour that contributed to the issues but CBA would still need to take a deeper a dive to understand the driving forces behind the behaviour that needs to change as well as the restraining forces that may hinder the change - no easy task.

With a company as large as CBA it's not hard to imagine the bureaucracy, heck the same thing exists in companies smaller than they are. This nearly always means that decision making is difficult and time consuming.

When I see change work going on in companies they tend to be able to focus on the processes that need to change (perhaps not all) but they tend not to think as much about taking a harder look at decision making or culture. Perhaps because they assume that changing the process will fix everything else. Or perhaps they just haven't spent enough time thinking about the broader issues or preparing for them.

I get it, culture is a 'big beast to tackle' and decision-making can also be complicated as it's often associated with 'power'. But these two things can have a devasting impact over time if not addressed - it cost CBA hundreds of millions of dollars in fines alone, but it had an effect on customers, business partners and employees that will be felt for a long time.

Don't wait till things blow up in your face before you do something. If you have a change on the horizion do a Change Readiness Assessment to help you identify gaps and challenges so that you have a chance to build it into your change management plan. We can help you avoid the problems CBA and the Financial Services Industry is facing.