Lessons from the past

Moving from Recession to Recovery

 

In the mid 90’s my consulting business was booming and I had driven many changes through a variety of companies including Clydesdale Bank, Lloyds Bowmaker, TI Group, Unisys, Bass Brewers, Dow Chemical, General Electric and many others.

 

Top Team Culture Change

 

I had been worked with Peter Taylor HR Director and Keith Greenough, CEO of Mortgage Express on management development workshops for the top team and their direct reports.

 

During this time it was announced that, because of poor lending decisions and the crash in house prices in the South East, Mortgage Express would discontinue their new business element and the structure would be absorbed into their parent company Lloyds TSB.

 

Mortgage Express (known as MX) employees were told that their operations and processes would be integrated into the Lloyds business and Mortgage Express would close.  The run-down to closure was to be completed in 24 months.

 

The management team, led by Keith Greenough decided that they had to ensure that MX would retain both high quality customer care and their best staff during the interim.

 

Imminent Closure at Mortgage Express

 

Keith and his team decided to fight back through a culture, change strategy and what follows is an explanation of how we worked together to create a superlative culture that defied the Lloyds hierarchy, which used culture change as a vehicle – to change the business, improve performance and make llo90oyds rethink their closure strategy.

 

MX was reprieved and it flourished outside the Lloyds culture winning the 1996 British Quality Award outright.  MX was such a success it was later sold to Bradford & Bingley as a niche Mortgage Lender.  Further, Bradford & Bingly committed to let MX operate independently – reportedly because it did not want to taint the culture of this fast moving business with the traditional slow moving bureaucracy.

 

The Change Team: Phil Atkinson & Peter Taylor

 

I worked extensively with Peter Taylor reporting to the CEO, Keith Greenough.  We proved that an external consultant and internal change maker can drive significant change!  We did not need hoards of trainers and consultants.  We drove measured improvement.  I continue in my work.  Peter moved into Consultancy and has been very successful.

 

This is MX’s story and there are many lessons that can be learned which are just as applicable in 2009 for a variety of companies.

 

Lessons Learned: Re-energising the Business Culture driving Performance Improvement & Profitability

 

Philip@philipatkinson.com

 

	Rapid Improvement

Mortgage Express Winner of the British Quality Award: A Real Change Maker

 

“This case study outlines the radical steps taken by the Top Team of Mortgage Express to rapidly introduce culture change. The successful implementation of the change was determined by the leadership, cohesiveness, tenacity and energy of the Directors driving the process.  Values were outlined as key drivers but managerial or Leadership behaviour was also a strong leverage point.  Involvement of the people was central to things actually happening.”

 

Close of Mortgage Express

 

After the collapse of the housing market in the early 90’s the goal of the new management for Mortgage Express was simple - exit from new business and initiate a transfer back to the parent company, TSB. 

 

Within a two year period they had initiated a measurable improvement in the culture through Culture Change and Quality Improvement and been short listed to four from a list of 200 applications for the 1995 British Quality Award. 

 

In 1994, Mortgage Express was dangerously close to shutting its doors with a potential loss of all 350 jobs.  This was in response to house prices falling rapidly in the early 90's, leaving many home owners with negative equity.

 

Withdrawal from the Market

 

The effect on corporate morale was devastating, with many staff expressing anxiety because of job loss.  

 

How did the Board react?  

 

How could they manage the transfer while at the same time maintaining superior customer service? 

• What action should they take to stop the movement of high calibre staff to other businesses? 
• What strategy could the Top Team create to ensure that MX retained a loyal, committed and motivated workforce?  

 

With the threat of a huge decline in motivation within the company, the Top Team had to plan and implement a strategy which would ensure that high calibre were not tempted to join another organisation for security but were retained in the business.  This was key if the company was to service the existing 30,000 customers effectively. 

 

The Top Team: Becoming Self Critical

 

Understanding that ‘change first starts with self’ was an important factor in driving the MX team to turn their company around.  They placed a huge emphasis on building upon the performance driven culture of the business. 

 

Assumptions behind the Turnaround Strategy

• The concept is known as 'Employability' in MX and the organisational responsibilities are to:
• Ensure the existence of a sense of challenge and achievement.
• Maximise opportunities for an individual team to bring about improvement.
• Enable – people to achieve their potential
• Facilitate – a choice of new learning strategies personalised to each of the 350 employees
• Recognise and ensure Continuous Development. 
• Individual responsibilities are to take charge, seek opportunities, be flexible, continually learn and have fun.

 

With transfer being focused upon last quarter 94 or early quarter 95 the Top Team took the following actions.

• All people were to be actively engaged in the process.  The Top Team led the process by examining the impact of their behaviour on the culture.
• Core Corporate Values & Behaviours for Mortgage Express
• We worked with the top team to help them define the values which would shape the change and the acceptable standards of behaviour.
• These behaviours were discussed and developed through the direct reports to the top team after designing a 360 Leadership assessment process with questionnaires and focus groups.
• All top team and their direct reports actively engaged in this process.

 

Diagnostics: Design of Leadership Process incorporating Corporate Values

 

I designed this around best practise in Leadership using a variant of the ‘Kouzes – Posner’ and ‘Warren Bennis’ Models of Leadership.  In the design of the diagnostic Leadership and values questionnaire I also incorporated the four core Values that were to drive the business.

 

I also designed and benchmarked a corporate culture survey targeting fifteen key measures for improvement.  These were all soft measures that were known to cause business improvement.

 

Four Core Values

 

The four Mortgage Express core values by which to change the culture were:

 

• Teamwork – cross functional matrix management
• Integrity – personal commitment to improve performance
• Relatedness – work with each other to achieve synergies
• Quality – continuous improvement in everything we do

 

Special provision was made to ensure that this was cascaded within the business.  Every member of staff attended a launch briefing followed by two interactive Workshops to identify for issues for implementation to strengthen MX.  Written information on the Mission and values was distributed to every member of staff and workshops designed to ensure that key issues were well understood and actioned.

 

Direct Reports to the Top Team

 

Direct Reports to the top team underwent significant training concentrating upon change management, leadership and how to sustaining a positive culture.  

 

Quality Improvement and the UK Quality Award

 

The Top Team took the step one evening after working through the key issues, to express their commitment to eventually pursue and then win the British Quality Award. 

 

Most companies starting out with this mission would not have the threat of closure occupying their time.  Further, they would not have such a short time to prepare the culture and the supporting documentation.

 

They set themselves a difficult target with less than a year to run before submission of the final document.

 

I had used the UK & the European Quality model over some time.  Peter Taylor and Keith Greenough committed to achieving a positive proposal in less than a year.

 

The Board understood the demands and committed to the process.  All managers at a senior level understood the commitment needed to produce a 'quality' application.

 

MX Project Team 

 

A project team of volunteers from across the business was formed, with over 80 people contributing, often in their own time in order for the 75 pages of the application document to be completed. 

 

The project was well managed and lasted a period of 6 months was a great success.  So much so that Mortgage Express have had a number of requests from other companies to buy their application document!

 

Building a Learning Organisation

 

The strategy for MX was to build the culture out from maximising the potential of each of the 350 employees.  Their development programme was focused individually on each staff member.

 

The focus was “if we do have to close our business what skills can we give you personally to put you in a strong position to win the job of your dreams”.  Each employee worked through the core skills, behaviours or qualifications they would commit to and MX provided the time and the investment.

 

Now can you think of abetter way to promote loyalty – by giving staff security in employment for their future?

 

Personal Development Programmes

 

Many developed and attended formalised programmes, and others sought real opportunities in open learning where staff felt free to choose their learning outcomes and be responsible for mastering that learning. 

 

This created a very passionate learning environment where some staff pursued MBA's and Professional qualifications, while others sampled the delights of more practical skills.

 

Investment in Morale

 

There has been a substantial boost to the already high morale within the business.  All the investment in development has paid off and all staff generally feel a personal commitment and effort in helping the business turnaround.  This commitment is evident by the phenomenal levels of very high staff satisfaction over 75% on average in the last three years (culture survey results).

 

HR Initiatives

 

Since February 95 the company had maintained its commitment to development of staff and formed a strong platform upon which to consolidate human resource initiatives.

 

Creating Facilitators for Change: Neuro Linguistics

 

Mortgage Express was keenly aware that the quality of its managers determines the quality of the business.  In particular, that the company should maintain its own army of internal change agents, rather than relying solely on external consultancies for any future change programme.

 

We identified the single most important desirable characteristic of the MX manager for the future goes far beyond their technical ability, and reside in the ability to manage the process of change.

 

Interpersonal Change Skills 

 

Managers attended advanced programmes on Inter-personal Influence and Facilitation.  Success now and in the future was based upon the ability  to persuade and influence others to achieve results, through strong and sensitive leadership behaviour.

 

The content of such programmes goes far beyond models of change and techniques of problem solving and decision making.  The process of change can be understood only when one understands how people communicate, influence and work together.  Special emphasis was given to Neuro Linguistics and working with others to develop joint outcomes. 

 

Culture Change Diagnostics: Staff Opinion Questionnaire

 

In many organisations this is traditionally a process owned by the HR Director and his staff.  It was not the case in MX.  This was driven and developed through an inter-disciplinary Improvement Team from across all business functions.

 

Benchmark the Corporate Culture: Functions & Matrix Management  

 

They have taken responsibility to regularly benchmark the culture of the business, and Managers have a precise measurement tool for assessing the culture within their own function and the processes that link them matrix management wise across the business and will gain additional insight on how they interact with their key internal customers and suppliers.

 

Doors Open Again for MX 

 

Mortgage Express formally went back into the Mortgage lending market in September 1995, again with a team of staff working incredible hours in order to make a success of the new venture.  New niche markets were identified and innovative products have been developed.

 

Learning Organisation

 

Entering for the UK Quality award provided a very positive motivational focus for the business with one of the key criteria being to learn how to further improve the business. 

 

With over two hundred applications, MX was short listed to the final four in 1995.  Staff were jubilant with the news of their success and began working enthusiastically on their 1996 submission. 

 

Mortgage Express Wins 1997 British Quality Award

 

More importantly, the MX team worked extremely hard and submitted their submission hoping to do well.  They won the award - an incredible achievement in such a short period of time and one which has guided them forward.

 

Mortgage Express Acquired by  Bradford & Bingley

 

In the Summer of 1997 Mortgage Express was purchased by Bradford & Bingley, a leading high street Building Society, to fit within their network as a niche business.

 

Later many years on I worked with Bradford and Bingley to help them create a diagnostic model to be used for soft due diligence when purchasing or merging with other businesses.  I met many of the MX people on my travels and their culture as still intact and the key players were all using their talents to best effect as their style integrated into the culture of B&B.

 

Times and situations forever Change

 

It is now 2009 and we are entering into a deep Recession.  There are many lessons learned from this intervention the main one for me being passionate about wanting improvement and committing to do everything possible to win the hearts and minds of people to take action in a common struggle. 

 

Review & Summary

 

At the time of falling house prices, negative equity, declining business how many people in the industry held out any hope for Mortgage Express?

 

However the odds were not in MX’s favour - but because of the dedication of the workforce they were able to build the culture to survive. 

 

What concerns me now in 2009 is that not many organisations will commit to this degree of change and too many don't think they can change.  This is a case study that gives hope even for the businesses who are close to the edge.

 

A final point.  Ask yourself, how many companies with closure looming would move well beyond a quick fix  mentality to really develop a new culture and be short listed for the BQA?  

 

And for the cynics - what effect has working with the soft side of culture had on bottom line results?   The facts are undernoted!

• Turning a £67 million loss in 1992 to a £38 million profit in 1994.
• Improving customer satisfaction by over 28% from previous levels and significantly improving staff satisfaction by 75%. 
• The top team turned the business around by building upon its culture.  They are now open for business again.

 

2009, Leadership, Time Machines & the Future 

 

Without Leadership MX would have died in 1994.  Looking to the future what other businesses could we save given the strategies open to us.

 

If we could use a Time Machine to travel along the timeline just ten years to 2020 who will be the giants in Banking, Finance and Insurance, IT, Retail, White Goods, Renewables, Energy, Transportation, Heavy Industry? We have a choice and that is to take action and change how we do things for the better by working with Leadership, culture and

 

Going back two or three years how many people in the industry held out any hope for Mortgage Express but because of the dedication of the workforce they were able to build the culture.  Not many organisations will commit to this degree of change and too many don't think they can change.

 

Commit to Change Now

 

How we have confronted change in the past is a testimony to the business situation we live in today in 2009 and beyond.  We need to develop an optimistic view of change and commit to taking personal responsibility to make a difference and – make it happen. 

 

We need to take this issue seriously if we are not to lose our niche businesses and our competitive edge as an organisation and even as a Nation.

 

Philip@philipatkinson.com