Wednesday, 8 August 2012

The financial services industry needs to step up to the plate & fulfil its destiny

In an article the Western Mail the CEO of the Monmouthshire Building Society states that creating a better financial services sector in the UK will not be the result of “bank bashing”.

 As someone who considers  themselves something of a financial services veteran (defined as 25 plus years experience),  this got me thinking.

Clearly Financial services has been tainted by behaviour of the banks & the insurers who mis-sold Personal Pensions & mortgage related Endowment policies. Clearly the industry has an image problem & is not trusted by the people who should be its biggest advocates – its customers !

This inherent mistrust of the industry and in some cases the inbuilt complexity, jargon and lack of transparency continue to confuse and confound the problem of lack of protection & security in key areas for consumers. In other words, consumers lack the very basic products that could make a real difference to their financial wellbeing.

So here is a ten point pledge that all providers of financial products should sign up to:

  • Treat customers as they would expect to be treated themselves
  • Design and manufacture products and services that are easy to understand
  • Make essential products affordable and accessible to all
  • Write customer communication that customers can understand
  • Look after your customers first and  shareholders second
  • Create customer experiences that are memorable for the right reasons
  • Remember that every enquiry, letter, telephone call, case, claim, policy number is a real person. Focus on the person not the task
  • Remember whose money it is that you are collecting and managing
  • Offer additional discounts for existing customers on new products
  • Scrap all sales targets and get your salesforce to focus on serving the customer first and foremost. Build relationships with customer and play the long game to rebuild trust. 

Do all of the above and financial services can grow up and fulfil its destiny & become the force for good that it should be !

Thursday, 2 August 2012

Succession planning at the Principality- that's the way to do it

The big news in the Cardiff business community is that Graeme Yorston is to succeed Peter Griffiths as the CEO of the Principality Building Society #.  Griffiths, led the society for ten years (of which the last four have been incredibly difficult for the industry) and in a style and way that has enabled the Mutual to avoid the problems and bad publicity affecting other financial institutions.

This news, got me thinking . So how do you replace such a capable leader ? What is the process ? Was Yorston the only person to be considered ? Had the resignation of Griffiths forced the board to think of a successor ? Or had the board been proactively thinking about, when this day arrived, who would be stepping into Griffith’s shoes ?  Essentially what these questions are attempting to discover is whether there was a succession plan.

So if you were being proactive and planning for the CEO’s departure how would you go about putting in place such a plan and what would be involved ? Four years ago I wrote my CIPD Management Research Report,  “Future Proofing The Organisation” on  how do you succession plan?

Essentially the steps to follow are:

Create a written succession plan – with the primary goal being the development of internal successors. Additionally emergency succession procedures should be included, to cover  situations such as sudden death or long term sickness of the CEO.

Develop a required set of capabilities -  compare the resulting list against the firm’s senior talent pipeline. Ensure that the board has regular exposure to internal candidates through presentations, field observations and site visits.

Conduct regular in depth reviews – the entire board with the senior HR executive should review the plan twice a year to make sure that it continues to be fit for purpose in the light of the ever evolving business environment and company strategy.

Narrow the field down to two or three contenders – this should occur about two years before transition.

Implement the plan, about a year before the anticipated departure through:

  • Indepth competency focused interviews
  • 360 degree feedback
  • Psychometric Testing

Then finally the board should make it’s decision

And that’s all there is to it ? Did the Principality follow this methodology, my guess is probably yes. Good luck to Yorston in his new role.

# The Principality is 7th Largest Building society in the UK and in the past 6 months attracted £160M and 28,000 new customers in the first 6 months of this year.