Back in 2003, Nedbank was in a quagmire - earnings were faltering, staff morale was at its lowest and execution had slackened. But now SA's fourth-largest bank is on a roll.
Just how was the bank redeemed? The key: Listening, understanding client needs and efficient execution, says CE Tom Boardman, who is credited for helping Nedbank regain its lost pride.
"When I took over as CE in October 2003 the first thing I did was try to understand just how Nedbank had gone from being one of the most highly rated banks into the position that it was in.
WHAT IT MEANS
 Turnaround strategy showing results
Getting buy-in from staff has been key
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"I conducted a number of informal one-on-one chats with people across the organisation," he says. He listened to staff, former employees and customers. "Often, the people that you must listen to are those who left the company, because they are not concerned about repercussions."
He also spoke to customers who had written "angry letters" to the bank.
Boardman has a "deep-seated" belief, from his 33 years in business, that the most successful companies in the world are vision-led and values-driven.
"If there has been one central theme running through what has happened at Nedbank it has been the creation of a vision and the building of a corporate culture underpinned by values," he says.
Boardman and his team ran a series of workshops in early 2004 dubbed SVB - strategy, values and brand - to solicit views from staff at every level of the bank.
During the workshops it became apparent that staff morale had sunk to its lowest. "It did not matter who I spoke to, they all said 'I used to be proud to work for Nedbank, but now I am embarrassed.' The loss of pride in the organisation was felt as a profound loss.
"The first thing we did in the SVB workshops was focus on the vision. We agreed that our vision was to become Southern Africa's most highly rated and respected bank - first by staff and second by clients," he says.
"Some people said clients come first. However, the decision to place staff first was deliberate because if you have passionate and committed staff, you will deliver superior service to your clients and if you consistently deliver superior service, you will deliver superior returns to your shareholders," Boardman says.
And as the banking industry in SA is highly regulated, earning the respect of the regulators - who include the SA Reserve Bank, the Financial Services Board, the Financial Intelligence Centre and the SA Revenue Service (Sars) - was a necessity, he says.
Boardman and his team also sought to regain the respect of the communities in which Nedbank operates.
The bank also agreed to a set of values to which everyone would commit. " Integrity came out as number one. "Respect for individuals - regardless of gender, race or age - was identified as another key value.
"Then we asked ourselves what it would take, and what would this company be like, if we achieved our vision and we came up with what we called our 10 deep green aspirations. We said we want this to be a great place to work in, a great place to bank with, a great place for shareholders to invest, and we want to unleash the synergies between different departments. Our business is about risk and if we are going to succeed, we want to be world class at managing risk.
"Building a community of leaders is a key aspiration because we want everybody to take accountability and lead. Then we said we want to be the most respected and aspirational brand. We also said we want to be leaders in transformation.
"Simply put, what makes us different and defines our strategy is that we are going to build a bank that is great at listening, understanding clients' needs and delivering," he says.
There was a general need to transform the organisation, the strategy, the culture, footprint and financial soundness of the bank. "But organisations don't transform, people do. Transformation begins with the behaviours of the leadership group because everyone looks to them.
"If you understand somebody else's position, you will have empathy for them. If you have a deep understanding of your customers' business, you will add value and the only way you get a deeper understanding is through listening. When you have listened, then you have to have efficient execution and that is the heart of what has happened here in the past four years," Boardman says.
The next step was communicating this and Boardman used his personal diary to communicate with the 25 000 staff. " Every week I sent out my diary of the previous week to everyone. I told them what time I woke up, when I ran, when my first meeting was and it was punchy so that they could read it. And I told them about the decisions that were made at meetings that affected the organisation and it had a huge effect," he says. "I ran it for about six months. It was a lot of work but that was only one of the communication tools."
Armed with a clear vision and a strong set of values, the next stage was to develop a strategy for Nedbank to become a Southern African bank that provides banking services across the full spectrum.
"We looked at SA's growth and where that growth was coming from in the retail sector and we saw that it was coming from the huge demographic shifts in our country. The real economic growth is coming from the black middle class and the mass market that is moving into that middle class. If you do not capture your share of that market early on, once people are banking with other banks, it's difficult to win them over as clients. So we decided to change the entire Nedbank strategy because previously it had been targeted at the top end of the market. The middle market was being targeted through what was then Peoples Bank. In a way, that meant that transformation was happening only through Peoples Bank, whereas the whole bank needed to transform," he says.
Peoples Bank was brought back into the Nedbank fold and used as a catalyst to accelerate the company's transformation.
Repositioning the Nedbank brand became a priority. Supported by market research, a decision was made to shed the elitist' tag and replace it with attributes that kept the brand aspirational but accessible to all South Africans.
"Then we had to look at our pricing. In 2006 we cut our retail bank charges by 13% on average, when others were putting theirs up. In 2007, we cut our bank charges by another 6%. We substantially reduced our Mzansi bank charges in 2006 (decreases in fees ranged from 11% to 87%) and that had a huge effect on our market share, to the extent that over the past six months we have been the fastest growing bank in terms of the Mzansi accounts," he says.
Safe and secure - Client satisfaction is high on the list as the bank transforms
Boardman and his team also had to change Nedbank's product range by bringing in products that were user-friendly. For instance, they launched the Everyday Account, which has a flat charge of R85.
They also changed Nedbank's distribution footprint and recruited the right calibre of staff to ensure that they would deliver service in a way that was friendly and acceptable. "On the corporate side, we see the real long-term growth of our economy is going to come from small and medium enterprises, so we reviewed our entire model," he says.
Boardman says Nedbank's business model across the board was changed to a more decentralised one to ensure that it was underpinning and supporting the strategy, particularly as it applied to Business Banking. Little wonder the bank posted forecast beating results in the 12 months ended December.
But, is there anything unique that Nedbank did to reposition the bank? Boardman says: " There is nothing that we have done here that you could not pick up from any business management book - the key is in just doing it and that is how we ended up with that phrase 'making things happen'. " And they did.
Shirley Zinn
He surrounded himself with the best team and one of his key lieutenants is Professor Shirley Zinn, who was recruited in 2005 from the SA Revenue Service.
"Tom (Boardman) approached me to come and essentially fix the people issues and help him transform the bank.
"When I came here it was just after the huge retrenchment that had taken place. There was a deep sense of uncertainty and lack of future orientation. There was mourning and grieving, reflecting an organisation in trauma," she says.
Zinn's job was cut out for her. "We have rebuilt a ship that was broken and put on board a cabin crew that is motivated. We are in good shape to take on the economic challenges that banks are facing globally and locally," she says.
The key to Nedbank's successful turnaround was getting people to understand "our business purpose, developing our business acumen, and creating the right policies, procedures and practices", she says. "We believe overall talent management is very important and it is all about attracting, retaining and developing the right people.
"In this bank every person has a scorecard and an ongoing performance management discussion," she says.
Zinn says her aspiration is to accelerate transformation at Nedbank to reflect the demographics of the countries and regions in which Nedbank operates and to "provide holistic development of our people".
"We want to be the best that we can possibly be and to unlock the corporate soul. And we do not talk about it in a way that is fluffy. It is about how we can raise the spirit of the organisation.
"We have built a strong foundation. Now it's about winning the game and being competitive again. We are creating a total value proposition for our employees, creating remuneration structures that attract people to stay," she says.
"I can't tell you how emotional everyone at this bank was in February when we announced our results.
"The people felt so fulfilled in that they have made a difference. We have come all this way. And as life would have it, we still have to journey on to greater things," she says.
