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  • Writer's pictureMaxime Fern & Michael Johnstone

Using shock and uncertainty to drive change

Living with contradictions

In early 2016, René Jones was the Chief Financial Officer of M&T Bank, based in Buffalo, New York. After a twenty-five-year career, he began to write notes to himself about operational and management problems. He called these thoughts “the state of things”, storing them in his desk drawer while he reflected on the issues that bothered him. Before he could act on his reflections, bank President Mark Czarnecki and then of iconic founding Chair and CEO Robert Wilmers, died.

When René succeeded Wilmers as Chair and CEO, he became responsible for the eleventh largest commercial bank in the United States. This was a successful business that had enjoyed an uninterrupted run of quarterly profitability since 1976 and was one of only two banks that continued to pay dividends during the Global Financial Crisis in 2008. It was a weighty legacy to inherit, encompassing a thirty-five-year period of growth and profitability.

At his first shareholders meeting, therefore, René assured people that the traditional M&T way would continue, with its emphasis on “simple community banking.” His initial job, he believed, was to calm things down and comfort people during a time of grief and uncertainty. But René, and his colleagues remained determined to implement twenty-first-century banking methods, such as online services, without compromising the fundamental values that had underpinned the bank’s success. He and his colleagues knew that success can breed stagnation and insularity, where people say to themselves, ‘We’ve got this, we know what’s best, and we don’t have to worry about what’s going on outside.’” This top team was determined to reignite a burning platform of purpose-driven banking for M&T, driving change while reinforcing continuity. They quickly realized they risked becoming yesterday’s good news story unless they transformed the company.

The situation Jones faced is not an uncommon one, though the urgency of change, precipitated by the deaths of senior people, focused everyone’s attention. Like most business before him Rene’s initial response was to calm things down, create stability and continue with what was known and familiar. But he faced a conundrum. How could he reassure his staff, customers and stakeholders of continuity, what they knew, while also transforming how the bank did business. His solution was to do both. Instinctively the new CEO knew he had to challenge conventional wisdom in his organization and he did so by fostering a culture that could not only tolerate more ambiguity but actually use it to their benefit.

For example, Rene encouraged the new Head of Customer Experience to challenge his Board and Executive team by exposing them to the gaps in customer experience discovered through recent analysis. She used the example of another bank’s poor behavior to get the executives’ attention, allowing them to think that it was their own business that had treated a customer so poorly. By using a counterfactual, she built an expectation that they had a severe problem, and created pressure that something should and could be done about it. As René, who was part of the meeting, put it, “There was a chance for us to make this crazy difference right in those moments that matter to customers. We all fell off our chairs in relief it wasn’t us. But we could see how what we had always assumed was working well, no longer was.”

Rene also insisted that his Executive team started to learn together rather than just using their meeting to provide updates. He introduced what became called René’s rhythm

and began using the Tuesday meetings for strategy and learning discussions where new types of questions would be asked, with pressure placed on participants to expand how they thought and contributed. René informed his colleagues, “We are only going to talk about three things: how we generate ideas, how we nurture these ideas, and what we will do next.” The rhythm of the meetings changed. “We were now creating a space for more exploration and there was new pressure,” he observed. “People weren’t used to it.”

A holding environment for challenge had been created. There was steady pressure to engage in different ways, apply new Agile methods of problem-solving, and build new adaptive capacities, including the ability to live with the contradictions generated by the business. Often, the ELT members felt out of their depth, stumbling and far beyond their comfort zone. The three executives held their ground, though, slowly moving the team toward more robust conversations. They kept the tension between what was known and what was new, between the safe and the uncomfortable.

In summary, René and his colleagues used gentle provocative methods to shift how the bank did business. They were provocative in this setting for three reasons- first, they confounded the expectations of all staff by moving quickly to challenge conventional wisdom and practice in the bank, especially regarding the idea of always maintaining stability and certainty. A lot of what they did held a tension between shaking things up and calming things down. Secondly, the introduced new ways of doing business through a series of trials, experiments, and problem solving and through hiring people from outside the bank to drive new ways. Thirdly, the CEO and his closet colleagues led by example, they became Learners in Chief and challenged their executive colleagues to do the same

Extract from Chapter 11: Provocation As Leadership.


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