Robert Gottliebsen
The customer is always right
Gail Kelly took on the Westpac chief executive job intent on making Australia's oldest bank more like the St George Bank she had headed for five years. Kelly faces a huge task because the culture of Westpac is deeply entrenched.
But if she takes over St George Bank it will be much easier because she will be able to use St George executives in many of the culture setting roles. As Stephen Bartholomeusz points out (Advantage Westpac, May 12) the tight conditions in global wholesale funding gives her the perfect opportunity to acquire St George. While St George won't take over Westpac, the St George people will relish the chance to transform the Westpac culture under their old boss.
If you have any doubt about the intention of Gail Kelly to transform the culture of Westpac compare her strategic briefing in this year's interim report with the strategic briefing that David Morgan gave in the final 2007 results.
The Morgan strategy was all about results, performance and adding incremental acquisitions. Westpac is currently benefiting from the conservatism of Morgan.
To bring out the change Kelly plans to implement at Westpac I have changed the order of some of her radical Westpac strategic aims:
- "Significantly improve the (Westpac) customer experience; drive a strong customer culture; develop and implement compelling customer segment strategies, integrating banking and wealth;
- "Focus on being easier to deal with; transform service delivery, redesigning processes end to end"
Even her more conventional aims for Westpac are couched in customer terms. Remember that the whole focus of the Kelly strategy at St George bank was to build a better relationship with its customers than the big four banks and she attacked them with incredible vigour. Those aims show that Kelly has not changed her spots despite being in a different cage.
And she's right. It’s imperative that Westpac undertake a transformation because John Stewart at NAB is introducing to Australia the techniques to attract and manage successful medium sized businesses and high-net-worth individuals that he developed in the UK (NAB's American Dream, May 12 ). The Stewart techniques have been very effective in taking market share from the big UK banks.
The aims of Gail Kelly are not that different from those expressed by Ralph Norris at the Commonwealth Bank. He is attempting a transformation of the CBA in a conventional way which is, of course, much slower. The ANZ under John McFarlane started the transformation process much earlier than the other big banks.
But there is great danger in using too many of the executives of a smaller bank to transform a bigger one. The old Westpac people may come to believe that they are simply watching the CEO of a smaller organisation bringing in her mates. Unless the process is managed very carefully a lot of key Westpac talent will walk out the door and the turmoil created will see Westpac customers walk with them.
To join an online conversation about the St George-Westpac merger click here.
