In the fiercely competitive world of banking, a strategic approach to HR has given St.George a distinct business edge. Craig Donaldson speaks with Brett Wright about the bank’s HR strategies and how they contribute to the bottom line
In the fiercely competitive world of banking, a strategic approach to HR has given St.George a distinct business edge. Craig Donaldson speaks with Brett Wright about the bank’s HR strategies and how they contribute to the bottom line
The importance of a good, strategic HR function has dawned on some of Australia’s major banks quicker than others. Given the nature of the business and the players involved, effective change at this level can take a good number of years to effect. But with a supportive CEO and solid understanding of the business, HR can make a major business contribution – one that will give it a potentially significant advantage over competitors.
St.George Bank has received a good amount of recognition for such strategies. Last year, for example, it took out the best overall use of technology and best HR team categories in the Australian HR Awards, while its executive general manager of human resources, Brett Wright, took out the award for best HR director.
There were a number of factors that helped St.George take out these awards, according to Wright. He believes that having a strong HR team with a strong business focus is one of the most important factors. “We’ve got HR people out in the business and it’s pretty seamless as to whether they’re a HR person or a business person. Sure, they’ve got the HR expertise, but they think and act like a business person.”
All members of the HR team operate with a view to increasing performance and profit in the business, Wright says. “That’s what they’re thinking about when they’re looking at HR interventions.”
Not having business-focused folk in the HR team can spark a vicious circle which many HR departments get into. Without the right people, Wright knew HR would not have the credibility needed to be invited into the business. “You can get shunned. One of the challenges has been the image and mindset of HR people in general. HR is historically a very traditional function, and it’s hard to change when HR people are recruited into and developed into that type of function,” he says.
It’s a challenge to find professionals with strong HR and business expertise in the current market, and Wright is very particular about who is recruited into the bank’s HR team. Additionally, he regularly positions non-traditionalist HR people in senior HR positions, which he says enables a fresh and business oriented perspective on people management.
But he also cautions against a ‘one size fits all’approach. “We’ve got a mixture of people in HR. There’s some traditional people with very good HR expertise, and we’ve got some non-traditional people who’ve come from business roles. Others come from very different professions as well. So it’s about having the right mix in the team, but the underlying factor is we want HR and business expertise. Without that you just can’t build that relationship with a business and you can’t talk the language of the business,” he says.
A strong relationship with the business
This relationship with the business is also a fundamental part of HR’s success within the bank. “Through a lot of hard work and proving our worth to the business, we’ve managed to get ourselves to the point where we’re very integrated and aligned with it,” Wright says. “It’s very seamless. It doesn’t really come up as to whether we’re HR or business people. We’re close to the business and have very strong relationships with the business.”
Being close to the business has also meant HR has been able to anticipate its needs and take a proactive rather than reactive role, according to Wright. Some HR team members also possess specialised skills which enable them to develop quick, innovative solutions with solid outcomes. “So we’re not there to fluff around and say we’ll do something, then think about implementing it 12 months later. It’s about speed of response and relevant solutions. The business doesn’t ask you all the time. Being proactive has been very important in building credibility. This leads to more involvement and respect, which gets you more involved in the business. So it’s a continuous cycle.”
Making the business case for soft HR
HR in general has traditionally had a hard time justifying many of its initiatives. Granted, the nature of the function has very often made deliverables hard to define, but Wright says it’s not impossible. “With some of the soft initiatives, I think it’s about constructing compelling arguments. You’ve got to be smart enough and savvy enough to pitch those arguments in a business sense, such as ‘the business can’t afford not to do this’,” he says.
At the same time, he cautions against over-promising. “If you try and contrive an ROI outcome, you’re going to get shot down. The business won’t believe it, and then your credibility goes,” he says. Even when there is some link to ROI on a soft HR initiative, Wright says a prudent approach is best.
He gives the example of an incentive program to increase the productivity of lenders. “There’s a whole range of other things going on. The lenders are being developed, they’re being skilled in the product and they’re being managed differently. So, is it the incentive program that got the outcome, is it the leadership development or the skill development, or is it a combination of all three? Some of those things you know are going to impact, and like I said, it’s about how you construct the argument.”
Justifying the soft side is hard anywhere, according to Wright. All the major banks, for example, are looking at customer service as a means of deepening relationships with customers and building their business at present. “Each bank’s got their own strategy on that. It’s all about people, and in some senses that could be regarded as soft, but there’s a view out there that it’s tangible.”
Balancing business and employee advocacy
Wright says HR should never forget that its core responsibility is to optimise the performance of people. “You can’t do that if you’re not looking at the people side and creating the right environment for engagement of those people. One doesn’t go without the other; that’s the reality of the situation.” He says HR can’t expect anyone to do their best work every day if they’re working in an environment in which they feel they’re not looked after. He says this is a fine balancing act: “It’s about being fair, but not benevolent I suppose. Be business oriented without dismissing the human element.”
HR has a prime role in employee advocacy through engagement, and Wright says it won’t be effective if it makes HR decisions in isolation of an understanding of business drivers – or vice versa.
The HR misconceptions of management
HR is often at loggerheads with management for a variety of reasons. HR can be its own worst enemy in some instances, according to Wright, whereby the function is unwilling to even attempt to bridge the gap. “There’s a lot of excuses around the business being too hard to reach, management doesn’t understand how important we are and revenues and profits are for others,” Wright says.
“You know, we’re here to look after the people, and you just can’t separate those things. In some respects HR is in a unique position to work with the business to use HR’s ability to leverage the people to increase the profit. But there’s a lot of excuses around not being able to get into the business, and that comes back in some cases to credibility, skills and business orientation.”
On the other hand, Wright says management often perceives HR as a cost and not part of the business machinery. He laments the management mindset which fails to see the potential value HR can add to a business – especially where HR is outsourced completely. “I suppose that’s taking a pure cost perspective, but it doesn’t allow for an understanding of some of the strategic things where HR can add value to in the business. I think it’s a very narrow approach. I support a number of outsourcing initiatives in terms of those transactional functions and the like which are diverting you from some of the strategic value adds,” he says.
Wright, who reports directly to St.George’s managing director, Gail Kelly, says the traditionally antagonistic relationship between HR and finance is like “chalk and cheese in many ways. They’re just very different in their orientation.” While HR could learn some valuable lessons from finance in how to add value to the business, Wright believes innovation is not traditionally a strong point in some finance functions – something that is often critical in good HR interventions. “I would think if HR reported to finance it would drop down to a lowest common denominator and innovation would be stifled.”
St.George Bank’s award-winning HR strategies
Brett Wright, group executive of human resources for St.George Bank, on taking out three categories at the Australian HR Awards 2004.
Keys to success:
· Position non-traditionalist HR people in senior HR positions to enable a fresh and business oriented perspective on people management
· Successfully build a strong relationship and presence within the business
· Recognise who our customer is – group and individual divisions (businesses)
· Have a proactive, anticipative and innovative approach to solutions for the business
· Be commercially responsive to business needs (speed, quality and on budget)
The challenges along the way:
· Building confidence within the HR team to a level where they believe they can achieve what’s required
· Changing the traditional view of HR for themselves and for the customer
· Reading and forecasting the business environment and determining needs
· Actively consolidating HR providers and HR spend across the group
· Marshalling resources, being focused on outcome and being responsive
Lessons learned in the process:
· Get a very strong management team, with a diverse background and some with business experience
· Employ outstanding people who think like and apply HR practices like a business
· Changing the image and mindset of HR people is not easy
· HR can get a place at the executive table only by performance and not by talk
· Think HR practice and learning in their full sense – long-term implications for culture and organisation rather than short-term policy, process or ad hoc training
· Get in control early
How HR managers can become CEO:
· Be known for the delivery of commercial outcomes, both group and business
· Bring all HR decisions, including how HR functions, back to business fundamentals. Think and behave like a business
· Focus on outcomes not policy and procedure
· Get the best HR people and demonstrate the power and worth of having the right people in right jobs
· Break outside traditional transactional HR functions and push the boundaries, ie. move from order-taker of training to learning to performance; move from remuneration provider to incentive and packaging modelling to enhance business performance; move from reactionary IR to arguing legislation for flexibility and unleashing people potential
