Effective Leadership in Change Management

John McFarlane, the leader of ANZ Bank, proved to be a successful leader by increasing customer satisfaction rates, staff engagement, and community recognition, while also turning around the financial performance of the company. He demonstrated knowledge about operations, involved stakeholders, and analyzed market trends to make informed decisions. As an organizational leader, John played a crucial role in implementing change management programs at ANZ, which included researching areas for improvement, establishing trust with stakeholders, and designing a performance management system to analyze progress and reinforce successful changes.

CHANGE MANAGEMENT –
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Executive Summary
The report has been prepared to analyse a case of ANZ Bank where it implemented a change
management program to bring about organisational wide changes in the culture of the bank.
The report discusses the challenges that the managers working in companies like the ANZ
face while trying to bring about changes in the culture of their business organisations. The
report also analyses the role that a leader has to play in influencing, directing and managing a
change management program by studying the actions and strategies implemented by John
McFarlane.

Table of Contents
Executive Summary.................................................................................................................2
Introduction..............................................................................................................................4
Main features of organisational transformation during McFarlane’s tenure at ANZ
Bank...........................................................................................................................................4
Challenges for managers in implementing transformation strategies................................6
Attributes of key leaders at the ANZ Bank and role of leaders in managing change
programs...................................................................................................................................7
Conclusion.................................................................................................................................9
References...............................................................................................................................10

Introduction
The Australia and New Zealand Banking Group Limited, also known as the ANZ, is one of
the five largest successful companies in Australia. The bank is also the largest company in
New Zealand. The company was formed out of the Bank of Australasia, while it established
its first Melbourne office in 1838 and its headquarters in New Zealand. The bank provides a
range of services to a diverse pool of clients. As of today, the company is publically listed
with almost 376,813 shareholders and a workforce of 35,000 people. The company serves
more than six million customers throughout the world. The company demonstrated excellent
performance results in 2008 even when the year was tough for the global financial industry.
ANZ was never this successful throughout its foundation. During the early 1990s, the bank
was facing a number of issues, such as bad debts, poor organisation, employee morale and
poor customer satisfaction rates. After experiencing such poor performance and workplace
conditions, the company appointed John McFarlane as the CEO of the bank in the late 1990s.
It was under the leadership of the new CEO and his freshly formed management team that the
bank was able to revive its market position and become successful through a series of
planned changes and transformations.
Main features of organisational transformation during
McFarlane’s tenure at ANZ Bank
One of the biggest reasons behind the worldwide success of ANZ Bank was the planned
changes or the organisational transformation that the new CEO of the company, McFarlane,
was about to introduce over a period of time. The change program implemented by the new
CEO, along with his new management team, had certain features that helped the management
in ensuring a successful transformation and reinforce the changes in the longer run. Some of
the features of the organisational transformation program implemented by McFarlane are
given below:
First of all, the transformation program implemented during the tenure of McFarlane was a
well-designed change management program that targeted the entire organisation on the
whole. The transformation program involved all the stakeholders in the change and was

properly designed before it was implemented. The new CEO of the company was able to
understand the role that the culture of the workplace plays in the overall performance of the
employees and considered organisational culture to be a topmost priority while planning the
change program. By inviting a research company to conduct a survey on the discrepancies
between the existing bank values and culture, the new CEO made sure that they could
identify those areas where the company required changes. Through such initiatives, the new
management was able to discover that there was too much bureaucracy and hierarchy in the
organisation, which was hindering the performance levels of the employees. as a result, the
transformations program was designed to bring about changes in the values of the
organisation on the basis of employee inputs while the existing values had been incorporation
into the culture by the senior managers.
Secondly, the new management formulated a dedicated breakout and cultural transformation
team to assist the management in implementing the planned transformation strategies.
Breakout workshops were arranging in which the employees were made more aware of their
values, the values of the organisation and how they had an influence in driving their
behaviour. Such breakout units helped the new management in continuously diagnosing the
behaviour of the employees and identifying the effect that the transformations were having on
the stakeholders. Further, the breakout teams acted as change facilitators, which are a
necessity for increasing the chances of success of a change program.
Thirdly, the new management of the company was able to implement a performance
management system, which helped it in increasing the success rate of its transformational
strategies. The company used performance scorecards and key performance indicators to
assess the performance levels of the employees across various fields, such as financial,
customer, etc. The performance management system was divided into three parts i.e.
performance planning, performance coaching and performance assessment (Henshaw, 2011).
The management designed an effective performance management plant that measured the
right performance objectives using the right performance indicators and metrics. Such an
effective performance management system helped the company in ensuring greater chances
of success in its change management initiatives (OGBA, 2009).
Finally, the management followed an effective approach to ensure organisation wide support
from the stakeholders during the transformational program, which could otherwise lead to the

failure of the program. The new management at the ANZ company followed a top-bottom as
well as a bottom to top change implementation strategy that ensured greater trust and
communication amongst the stakeholders (Cummings, 2013). Thus, the ability of the
management to establish trust and communicate the transformation program clearly to the
stakeholders helped it in ensuring a greater success rate for its change program.
Challenges for managers in implementing
transformation strategies
It is often said that a change is not the problem, resistance to change is. An organisation can
experience a variety of changes that can have an effect on individual units, processes and
sometimes on the entire organisation as a whole. Cultural change is an organisation wide
change that has an impact on the entire organisation as a whole and is considered to be one of
the most difficult changes to be implemented in any organisation. Cultural changes can bring
about changes in job roles and responsibilities, operations, dealing with clients, buyers and
suppliers, etc. As a result, cultural changes receive a great deal of resistance from the
stakeholders and the managers responsible for implementing a cultural change has to face a
number of challenges in their attempts to achieve a successful transformation. Some of the
challenges that the managers working in companies like the ANZ and trying to implement a
cultural changes face are discussed below:
First of all, when the change is related with the culture of an organisation, it becomes very
difficult for the managers to build organisation wide trust and establish effective
communication networks, which was also a challenge that the management of ANZ Bank
faced while attempting to bring about changes in their organisation culture. Building trust and
communicating the change program is one of the most important pillars of success while
trying to transform the culture of an organisation and in their absence, the stakeholders can
create panic due to fear of the unknown and can offer a great deal of resistance to the change
program (RICK, 2015). As a result, it can become difficult for the managers to implement a
cultural change successfully and can fail in their attempt to achieve a successful transition.
Secondly, cultural changes can also involve alterations in the job roles and responsibilities of
certain employees, which can further result into a change in their power status or status quo.

Such a condition can trigger a lot of resistance to the change program as the employees
working on the topmost position might feel a threat to their powers and can offer very strong
resistance to the change management program (BRADFIELD, 2006). Further, cultural
changes can also involve elimination of certain job profiles from the organisational hierarchy,
which can generate stress amongst the employees and can have an effect on their
performance levels. As a result, it becomes an important challenge that the managers face
while trying to transform the culture of their organisations.
Thirdly, it is a natural tendency of human beings to resist changes as they bring them out of
their comfort zones. In case of cultural changes, it is obvious that the entire organisation will
have to undergo a major change, which will definitely bring a lot of employees out of their
comfort zones (Ryan, 2014). As a result, the employees offer a higher resistance to such
changes that can have a huge and a long lasting impact on their jobs. Therefore, this is
another challenge that the managers trying to transform the culture of an organisation are
bound to face.
Lastly, cultural changes also become a challenge for the managers because a talk about
cultural change can initiate a lot of group dynamics and politics within the organisation. A
culture of an is defined as the way in which an organisation carries out its work operations
and how the things are done in a company. The culture of an organisation is the only thing
which binds the entire workforce together and when there is a change being planned for the
culture of an organisation, the stakeholders can create panic and can become part of group
dynamics, which can make it difficult for the managers to implement the transformation
strategies successfully.
Attributes of key leaders at the ANZ Bank and role of
leaders in managing change programs
A leader is a person who has the skills to make the other people follow and get things done
by keeping them motivated. A great leader is the one who has the potential to bring the best
out of his followers and contribute more towards the overall success of an organisation. The
way in which, under the leadership of John McFarlane, the ANZ Bank emerged as one of the
top companies in the areas where it had its operations clearly proves the efficiency and

effectiveness of John as a leader. During his ten-year tenure, John proved to be successful in
increasing the customer satisfaction rates, higher staff engagement, community recognition
and above all, turning around the financial performance of the company and delivering on the
promises that were made to the shareholders.
John McFarlane proved to be a successful leader and even at the end of his tenure, most of
the stakeholders did not want him to leave the company and felt that his tenure should be
extended. John McFarlane had a great deal of knowledge about the operations of the bank
and knew how to involve all the stakeholders, which helped him in ensuring higher
engagement levels. Further, as a leader of a company, John also had the ability to analyse the
market trends and undertake strategies that would help the company in becoming more
successful in the times to come. He followed a futuristic approach and made some important
decisions that helped the company in grabbing a greater market share and reviving its
position in the market.
Organisational leaders have a great role to play in the implementation of change management
programs and can bridge the gap between success and failure. John, as the leader of ANZ
Bank, played an important role in influencing, directing and managing the change process at
ANZ.
First of all, John worked hard to carry out extensive research and surveys through
professional organisations so that they could identify the areas where the organisation
required changes. It helped the company in identifying those operational areas which were
inefficient and prepare change management programs to deal with the inefficiencies
identified.
Secondly, John worked hard with his management so that they could avoid situations that
could give rise to resistance to the change program. They implemented strategies that enabled
them to establish trust in the organisation and communicate the change program to the
stakeholders in the best possible manner. The decision to improve communication and
establish trust helped the management at ANZ to effectively manage resistance to change.
Thirdly, John also designed and implemented a performance management system that helped
the management to continuously analyse the progress that it had been making in the

implementation of the change program. It also helped the management in identifying the
areas that were proving to be ineffective and turning them effective by performance coaching.
Furthermore, the system of performance management also helped the company in reinforcing
the changes that had been successfully implemented so that the employees could not switch
back to their previous cultural values or behaviour.
Conclusion
Managing a change program is never an easy task as many organisations have lost their
market share to their competitors because of their failures to implement changes successfully.
ANZ Bank is a perfect example of how leadership can play an important role in ensuring
success for a change management program as it was able to greatly revive itself under the
efficient leadership of John McFarlane. The ability of the company to successfully transform
its cultural values was made possible by the leader of their organisation, who worked hard in
influencing, directing and managing the change process at ANZ.

References
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Cummings, K., 2013. Trust, Communication, and Leadership: The Three Laws of Influence.
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https://www.td.org/Publications/Blogs/Management-Blog/2013/04/Trust-Communication-
and-Leadership-the-Three-Laws-of-Influence
[Accessed 11 September 2017].
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Available at: https://www.torbenrick.eu/blog/culture/why-is-organizational-culture-change-
difficult/[Accessed 11 September 2017].
BRADFIELD, J., 2006. Challenges of changing culture. [Online] Available at:
http://www.bizcommunity.com/Article/196/18/10447.html[Accessed 11 September 2017].
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https://icma.org/articles/challenge-changing-organizational-culture-0[Accessed 11 September
2017].