WESTPAC CASE by ThEME

David Morgan, then Westpac’s president, recalled that, “People had lost sight of our underpinnings. We weren’t unique: partly from deregulation, partly technology and partly globalization, we were an organization struggling with new freedoms and misunderstood the responsibilities that went with it. Hubris and a few other things took over.” In the mid-1990s, management got a wake-up call as the customers and even some investors were making their views known.

The customer feedback was reflected in the staff jumping the counter and identifying with the customer. The branch staff wear uniforms. The staff was so fed up with being abused on public transport, that quite a few of them began wearing their civilian clothes to and from work, only changing into their uniform once in the branch.

The bank was not being socially responsible and there was a clear lack of trust with the community. Record earnings were not reflected in Westpac’s stock performance.

By highlighting the gap between community perception and the bank’s underpinnings, the senior management team was able to persuade the board to rethink the bank’s course and take decisive action. For example, Westpac put a moratorium on any further removal of face-to-face banking services. In areas where conventional branches were “unprofitable,” Westpac got rid of multi-story free-standing branches, and partnered with local retailers.

Management learned that if your own staff is not advocating for the company, it will be in trouble.