While financial services firms have proven themselves capable of making small changes that increase effectiveness and better manage risk, in today’s competitive environment success hinges on a broader, multi-disciplinary transformation that affects the entire fabric of the industry. “Change fitness”—an organization’s ability to quickly and effectively drive all sorts of change—has become a core competency.   “Join In The Race Or Be Left Behind: How ‘Change’ Is Changing The Competitive Landscape In Financial Services” explains how data analytics can reveal strengths and weaknesses within a financial services firm that, when addressed effectively, can improve change fitness and help drive the kind of large scale change that will sustain competitiveness for the long term.

1. STRATEGY CONSULTING DIGITAL TECHNOLOGY OPERATIONS
BY SARAH KRUGER AND WARREN PARRY
JOIN IN
THE RACE
OR BE LEFT
BEHINDHOW ‘CHANGE’ IS CHANGING
THE COMPETITIVE LANDSCAPE
IN FINANCIAL SERVICES

2. 2
CHANGE OR BE LEFT BEHIND
IN A RACE TO EMBRACE THE
NEW COMPETITIVE LANDSCAPE
IN FINANCIAL SERVICES
In a sector which prized its stability and efficiency,
change has become a new strategic priority.
Financial services (FS) organizations are
undergoing radical transformation in response
to an eclectic mix of new regulations, more
demanding and empowered customers,
digital disruption, cost challenges, mergers
and divestments. They risk losing the battle to
retain customers, employees and revenues as
new digital technologies cause disruption and
nimbler players enter the market. In the face of
this unsettling combination of forces, leaders
seek to find new opportunities for increasing
premium growth, improving profitability and
sustainably reducing costs – while struggling to
change legacies inherited from the past.
Change is not new to banks and insurers.
But the kind of change they face is more
demanding and faster-paced than ever. It
is now more transformational. It affects not
only what these organizations do, and how
they do it, but also their business model, their
workforce and talent strategies and even their
corporate culture. Change – once an activity
attached to programs and projects – now needs
to become a core capability residing at the
heart of the organization. Only in this way can
FS firms take advantage of digital innovation
and a more fluid and flexible workforce.
Agility is a prized strategic capability. Achieving
it requires organizations to do more with less
at a faster pace. Taking on more iterative and
experimental programs with less clearly defined
objectives and outcomes calls for new skills
and capabilities – but delivers the benefits of
change more quickly than ever. With budgets
for discretionary change under increasing
pressure, due to the growing demand for
mandatory change, FS firms are forced to do
more with less.
Most banks and insurers are in their ‘comfort
zone’ when it comes to smaller projects, more
extensive technology change and regulatory
compliance. However, their track record of
working simultaneously across multiple parts
of the business is less impressive. Those
that struggle to embark on multi-disciplinary
transformational change that alters the fabric
of their business – from customer channels to
corporate culture and business models – risk
falling behind in a rapidly evolving market.
Each organization will identify a different set of
changes needed to sustain its competitiveness.
But one thing is indisputably the same for all
FS firms: ‘change fitness’ has become a core
competence. An effective, professional change
capability, that can use data and analytics to
understand the status of change, enables the
enterprise to deal with whatever threats emerge
as the industry transforms, and to capitalize on
the opportunities that invariably accompany
these threats.

3. 3
How can an organization evaluate its change fitness, and
monitor its various change initiatives to determine whether it
is on track to deliver the expected benefits?
Accenture uses Change Tracking to analyze and benchmark
organizations’ change efforts. Over the past 15 years we have
studied 650 major change initiatives at 220 organizations across
50 industries – including 35 financial services companies with
68 initiatives. Our database consists of the findings collected
from more than a million employees, who range from front-
line staffers through leadership at all levels, and include team
managers, divisional heads and corporate executives. The
resulting analysis of that dataset – representing the cumulative
wisdom of experienced change travelers – allows change
managers to assess their change fitness, learn instantly when
their change program drifts off track, and determine which
interventions are needed to get back on track.
An analysis of the FS sector shows that it has stronger change
capabilities than other industries, and is among the best
performing – with the majority of its change programs on
track. But being OK in a competitive world is to under-perform,
and the challenge for most FS organizations is to move from
‘good’ to ‘great’.
HOW DO WE KNOW
IF WE ARE ON TRACK
TO ACHIEVING OUR
CHANGE OUTCOMES?

4. 4
Figure 1. Key issues for firms undergoing transformation, and how financial
services providers compare with the cross-industry top performers.
WHAT THIS
DIAGRAM SHOWS
The difference between
the dark and light-
blue bars is the extent
to which the average
FS organization lags
(or in case of Risks
Roadblocks, surpasses)
the high performers in
all industry sectors with
regard to the various
attributes of change.
However, there is still a distinct gap between
the majority of FS organizations and the ‘high
performers’ across all industries. The latter
group, comprising organizations that are
known to undergo fast-paced change, includes
the digital market leaders and many start-up
companies.
Analytics-based outputs from Change Tracking
show where the gaps are and where cracks
are likely to appear under the pressure of
more change taking place. They also identify
the recommended actions to strengthen the
change capability proactively.
Among the strengths that can clearly be
seen (Figure 1) are FS firms’ communication
capabilities and their success in establishing a
clear vision and direction. They have low levels
of fear and frustration, and strong business and
team leadership.
Seen from the strength of the light-blue
bars, financial organizations need little or
no improvement to reach high performance
in communication. If their change strategy
consists primarily of enhancing communication
to sell the vision – a common focus in FS
change management programs – then they are
completely missing the mark. A greater effort
in an already high-performing area will yield
diminishing returns, and may have the least
impact on overall performance.
Moreover, leaders often think change is a
matter of selling the vision of an innovative
digital future. Our research tells us this is
typically not a major constraint in financial
services – employees understand and accept
this vision of the future.
Identified weaknesses in the areas of passion
and drive, accountability, and skills and
staffing are where the real change efforts
need to be applied. Our research shows that
accountability, and passion and drive, are vital
to maintaining stability and control, and to
managing change in a fluid environment.
Business performance
during the change program
Realization of change
program benefits
CHANGE OUTCOMES
POORER BETTERSAME AS BEFORE
AVERAGE
LOW HIGHMODERATE
NORM
OBSTACLES TURBULENCE
DRIVERS OF
CHANGE SUCCESS
Communication
Vision and direction
Fear and frustration
Team leadership
Business leadership
Teamwork
Passion and drive
Accountability
Skills and staffing
Systems and processes
Risks and roadblocks
Amount of change
Pace of the change
Stage of change
FS industry average
Cross-industry high
performers
HIGH PERFORMANCELOW PERFORMANCE
HIGH PERFORMANCELOW PERFORMANCE

5. 5
Yet they are currently where FS firms achieve
the lowest scores. They need to be increased
by 87 percent and 97 percent respectively, so
that organizations can implement the vision
they have defined and avoid fragmentation as
the pace and amount of change ramp up.
Other factors that make a significant difference
are clarification of roles (needs to be increased
by 73 percent) and making goals more
measurable (+91 percent).
Another is improving accountability (+118
percent). But this is not accountability in a
vacuum. Teamwork, which turns accountability
into passion and drive, also needs a huge
increase (+105 percent). This is the glue that
keeps things together when the pace ramps
up. These capabilities are also harder to develop
when working with a liquid workforce made up of
partners, contractors, employees and vendors.
These results reveal a fundamental challenge
confronting the FS industry. New digital
strategies require a culture that supports and
sustains the execution effort. But to date,
successful financial organizations have focused
on driving effectiveness – strategic cost
reduction, simplification and re-engineering –
and successfully managing risk. Their culture
is at odds with enabling agility and innovation.
This is one of the main reasons why niche
players that don’t have these encumbrances
can so easily enter their marketplace.
The performance scores bear this out. They are
highest for effectiveness and ability to manage
cost / risk, while the scores for customer
service – paramount in operating and providing
flexible services in a digital environment – are
much lower.
We know from our research that the highest-
performing organizations have the greatest
amount of change taking place at a fast pace.
They are delivering business benefits more
quickly, but they demand a strong capacity
to manage change. If an organization ramps
up the amount and pace of change without
building the necessary capabilities, weaknesses
become exposed and the organization can
lose control of the change initiative. Expected
benefits fall through the cracks and a gap
opens up between the intentions of leaders
and the achievements of the staff who are
implementing the change (see Figure 2).
WHERE STRATEGY COMES
UP AGAINST CULTURE
Figure 2. An analysis of an organization’s change capability can identify fault
lines that pose grave danger – but which can be addressed tactically.
LEAVE
THEIR
PEOPLE
BEHIND
RACE
AHEAD
CRACK THAT
LEAVES THEM
WEAK TO
COMPETE
Passion and drive
Accountability
Skills and staffing
Systems and processes
Communication
Vision and direction
Fear and frustration
Team leadership
Business leadership
Teamwork
FS industry average
Cross-industry high
performers

6. 6
In a fast, fluid environment it is imperative that
change directors recognize the importance
of leadership at all levels. They must also
appreciate how each level of leadership – from
the C-suite, to business leadership, to team
leadership – holds the keys to different parts of
the equation for success. Few organizations can
control the forces of the marketplace. Strong,
cohesive leadership provides the strength they
need when they relax their controls in favor of
agility and flexibility.
Leaders at all levels need to re-examine and
adapt their roles in order to meet the needs
of fast-paced change. The requirements vary
according to the levels of leadership:
THE C-SUITE: BUILD UPON
THE STRONG FOUNDATION OF
VISION AND COMMUNICATION
• Focus on the future, and don’t hide behind
regulations and cost reduction measures.
• There is no need to monopolize ‘ownership’
of change; rather actively build a culture of
accountability across all levels.
BUSINESS UNIT LEADERS: TRANSLATE FROM
THE ‘BIG PICTURE’ TO PRACTICAL DETAILS
USING MORE FLEXIBLE CAPABILITIES
• Keep up with the fast-moving external
pressures of digital disruption by first
applying digital innovation from within –
build the workforce of the future. The use
of robotics and automation will not only cut
costs, but also free up employees from task-
oriented activities and empower them to take
more responsibility. Leverage technology to
break away from the traditional hierarchy,
and operate with a collaborative model using
interconnected networks.
• Build reusable talent blocks so that
‘learning to learn’ is the core skill. Coach
and enable employees to constantly develop
new skills needed by the organization.
Have them focus on the skills that will
become even more important in the
age of the machine: idea development,
experimentation, communication, analysis,
and the ability to make sense of data. This
way, as financial organizations evolve to
take on innovative technologies and meet
customer needs, each employee will be
capable of supporting this goal.
• Seek the support of change analytics.
When creating new products, services and
customer channels, business leaders should
gain confidence from the insights that
change analytics can provide about their
internal business areas. It will allow them to
see which teams require additional guidance,
and to adopt adaptive measures to address
under-performance.
TEAM LEADERSHIP: FOSTER
ACCOUNTABILITY, TEAMWORK,
PASSION AND DRIVE
• To get the most value from the workforce
of the future and reusable talent blocks,
team leaders must foster accountability,
teamwork, passion and drive.
• Focus on performance management at
the team level to empower team leaders
to lead change. HR should incentivize
learning, innovation and collaboration at a
team level through modern performance
management frameworks. Move away from
relying solely on team KPIs that are fixed
and statistical, and add fluid goals which
are qualitative and personal.
IN A FAST-PACED ENVIRONMENT,
STRONG LEADERSHIP HOLDS THE
KEY TO SUCCESSFUL CHANGE

7. 7
A leading global insurer decided to take drastic
action to stem the defection of mainly younger
customers to its more digitized rivals that were
able to offer more personalized and relevant
products and services. Its goal: to become the
most customer-centric provider in its market
segment.
The carrier realized that nothing less than an
enterprise-wide transformation would succeed.
But it was concerned that a global change
program of this scale would be difficult to
manage and monitor.
To give visibility to whether or not the program
was on track, Accenture conducted a Change
Tracking survey to extract hard facts and
figures. Close to 1,000 staff members from 20
business units responded to an online survey
that collected their views about what was going
on across all levels. Their perspectives revealed
the strength of the key drivers critical to the
success of the change program and highlighted
how people’s experiences were impacting on
benefits realization and business performance.
The good news was that senior management
teams were well positioned in ‘high
performance’. They clearly agreed with the
vision, their capability as leaders was strong
and they were achieving high trust, credibility
and accountability. Most importantly, their
passion and drive was high – a critical driver of
improvements in customer service levels.
The more challenging news was that
disconnects below top management were
putting the program benefits at risk. Staff
frustration with a lack of resources and poorly
defined processes were slowing things down.
Clearly, leaders had work to do in building
accountability and positive momentum in the
levels below them.
These and other insights enabled leaders to
intervene with precision and efficiency, taking
appropriate actions to bring the program back
on track. Key among these were improvements,
by the business leadership, to the organization
structures, systems and processes, and to
policies and procedures. They also included
addressing the skills deficiencies that were
jeopardizing enactment of the change. Much
more than just training, this entailed on-the-job
coaching, mentoring, shadowing, secondments
and exposure to project work.
The result was that the business leaders worked
with the team leaders to ‘smartly’ solve the
resources constraints. Business performance
immediately started to rise and the pace of
change accelerated, creating positive steps
toward building a more agile culture into the
heart of their organization.
Figure 3. Change Tracking clearly identified where deficiencies at different staffing levels were
impeding the insurer’s change program, allowing it to intervene and quickly get things on track.
TIMELY INTERVENTION PUTS
INSURER’S CHANGE PROGRAM
BACK ON TRACK TO SUCCESS
VISION LEADERSHIP RESOURCES DISCIPLINE ENERGY
Level 1-2 (n=47)
Level 3 (n=243)
Level 4-6 (n=683)
EMPLOYEE
LEVELS
Visionand
direction
Communication
Business
leadership
Team
leadership
Skillsand
staffing
Systemsand
processes
Teamwork
Accountability
Passionand
drive
Fearand
frustration

8. There are many myths surrounding the art of change
management, and using guesswork or old tried-and-tested
formulas simply doesn’t cut it in the future we are facing.
There is no longer such a thing as one size fits all. Every large
organization committed to transformation encounters different
obstacles in different parts of the enterprise. The failure to
identify and address these obstacles as they emerge can impede
progress; even jeopardize the entire program.
The development of advanced analytics, coupled with
massive data sets, enables FS organizations to elevate change
management from just an art to one underpinned and guided
by science. The insights they provide allow firms to plan their
changes effectively, gain a clear understanding of their change
fitness, address the gaps that are exposed, and focus on the
change interventions that will actually have an effective impact.
They also allow them to maintain a clear and accurate picture of
their progress, and to take effective remedial action as soon as
problems arise.
What this amounts to is simply the professionalization of the
enterprise’s change capability. What would have been a luxury
a decade or two ago, when change came along sporadically,
has now become a necessity – a core competence for any firm
hoping to keep pace with the times and seize the opportunities
of the digital era.
TIME TO TAKE A
MORE DYNAMIC
AND ANALYTICAL
APPROACH TO
CHANGE
8

9. ABOUT ACCENTURE
Accenture is a leading global professional
services company, providing a broad range of
services and solutions in strategy, consulting,
digital, technology and operations.
Combining unmatched experience and
specialized skills across more than 40
industries and all business functions –
underpinned by the world’s largest
delivery network – Accenture works at the
intersection of business and technology
to help clients improve their performance
and create sustainable value for their
stakeholders. With approximately 373,000
people serving clients in more than 120
countries, Accenture drives innovation to
improve the way the world works and lives.
Visit us at www.accenture.com.
Copyright © 2016 Accenture. All rights reserved.
Accenture, its logo, and High Performance Delivered
are trademarks of Accenture. This document is
produced by consultants at Accenture as general
guidance. It is not intended to provide specific advice
on your circumstances. If you require advice or further
details on any matters referred to, please contact your
Accenture representative.
CONTACT THE AUTHORS
SARAH KRUGER
Talent Organization Lead for
Financial Services, Australia
sarah.a.kruger@accenture.com
WARREN PARRY
Managing Director,
Global Change Tracking Lead
warren.parry@accenture.com
CONTRIBUTOR
JOY WANG
Talent Organization Practitioner,
Financial Services, Australia
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