ANZ Change Management Case Study

This case study analyzes the change management process implemented at the Australia and New Zealand Banking Group (ANZ) under CEO Mike McFarlane. The analysis focuses on the challenges faced during a period of rapid organizational transformation aimed at improving performance and employee engagement. The study critically examines McFarlane's leadership style, comparing it to transformational leadership models and highlighting the shortcomings of a top-down, rapid change approach. The case study uses Kotter's 8-step change model and Lewin's three-step model as frameworks for evaluating ANZ's strategy. It concludes by recommending a more gradual, participatory approach to change management, emphasizing the importance of employee involvement, data-driven decision-making, and a clear vision communicated effectively throughout the organization. The document includes an executive summary, introduction, case analysis, recommendations, conclusion, and a list of references.

ANZ Case Study of Change Management
Analysis
Case Study Analysis
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Executive Summary
The Australia and New Zealand Banking Group Limited (ANZ) is one of the leading bank that is
very successful in the country in which it operates. The Company was established in the year
1835 in Sydney, which currently houses its headquarters. In view of the bank’s consistent
underperformance McFarlane being appointed as CEO envisioned to bring about a change in the
current structure of the bank. He aimed at restructuring the bank through his leadership. He
aimed at creating an employment culture that was free form bureaucracy, who could function on
values set. He appointed McKinsey, who in turn set performance parameters with set target and
goals. ANZ set up three sets of performance parameters for their change management processes
namely, Performance Planning, Performance Coaching and Performance Assessment. The Bank
faced ones of its biggest challenge implementing engagement and support for cultural change.
The change process was progressed from top as well as bottom levels, which required immense
commitment to transformation processes. The scope of the report identifies the sudden change
management process adopted by the Bank, which did not yield much value as against gradually
progressive change management endeavor.
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Table of Contents
Executive Summary.....................................................................................................................................2
Introduction.................................................................................................................................................4
Case Analysis...............................................................................................................................................4
Recommendation and Conclusion...............................................................................................................5
Reference Lists............................................................................................................................................6
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Introduction
Change management is a necessary factor within organisation for creating sustainability and
profitability (Young, 2009). Change management processes include a series of transformation
steps that can lead employees into the changed process. The scope of the following report
analysis deals with case study analysis of ANZ Bank. The Australia and New Zealand Banking
Group Limited (ANZ) is a leading and largest bank amongst five most successful companies in
Australia and also in New Zealand. The Company had gained tremendous success post its
establishment in 1835, now it has expanded to various countries globally serving multitudes of
investors, customers and countries (Aiken, 2009). The Company is publicly listed with consistent
performance in various countries around the world. The Company has a shared cultural value
based dimension with its employees and management. The Bank had been successful in
developing several employee related programs which were extremely successful but there had
been a major challenge faced by the Bank in 1990s. The Bank employees had faced low
employee morale and customer dissatisfaction along with other related issues, which led to
appointment of McFarlane as a CEO (Klaus, 2014). He was focused on achieving transition in
the Bank for achieving its success and sustainability for the future. The case study analyses
challenges faced by McFarlane change management process, along with recommendations in
order to overcome the same.
Case Analysis
ANZ Bank had been extremely successful in its various employee management processes. It has
long history of customer satisfaction in its various phases of history but in 1990 it faced
challenges in regards to poor performance, which led to its implementation of change
management programs (Avey, 2008). McFarlane, who was bent on creating long-term strategic
initiative for the Bank, envisioned the change management within the Bank. He viewed lack of
banks performance in rural areas, due to which he withdrew from such areas and attended to lack
of senior women in higher ranks. He undertook concept of corporate social responsibility for
extending competitive advantage within the industry. He went ahead with then job cuts for
generating better cost-to-income ratios then further undertook organisational transformation
processes (Hayes, 2014). His primary focus was to rapidly transform the organisation impacting
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it from top-down approach as well as bottom-up approach for creating ANZ with a human face
that could deliver financial benefits and shareholder returns. There were tremendous amounts of
discrepancies that existed in employee vision regarding the Bank and way the bank wanted to be
structured. All changes that was envisioned by McFarlane was rapid and did not progress with
the aid of a change management leader. Leadership of McFarlane can be considered
tremendously ineffective as he could not bring about the gradual transformation in the
organisation cultural processes (Oreg, 2011).
Effective change management is progressed by help of a change management leader, who
envisions and then later implements the change within the framework of the organisation culture.
Change envisioned within ANZ was a qualitative change that had to transform the organisational
climate existing within the Company. It aimed at transforming values and orientation of
employees which could in turn help render performance related objectives. Employee
performance was inadequate at the organisation and could be impacted with changed processes
(Jack Walker, 2007). Hence, for bringing about changes in employees, a transformational leader
should have led the process. Failure in attending to the change process reflects the
ineffectiveness and rapidness with which the change was brought about in the Company with
lack of planning. Various change management models that could have been implemented could
allow the Company better results with change management rather than failing in the change
methodology. One of change management models that is often accepted by industry wide
participants consists of Kotter’s Change Management Model (Frankland, 2008).
Kotter proposed a 8-step model for change management starting with creating a sense of
urgency, followed by building a coalition, then forming a strategic vision with initiatives. Further
steps includes enlisting a volunteer, then enabling action by removal of barrier, then generating a
short-term win, then sustaining accelerated changed process and finally attainment of change
process (Yu, 2009).
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Figure 1: Kotter's Change Management
In first step of creating a sense of urgency, transformational or change management leader raises
concern for implementing a process of change. In any change management process as it will be
undertaken by employees, it is essential that a communication with confidence is created along
with employees. This makes employees feel aware regarding the process of change and then
implement step by step procedures (Kotter, 2008). However, in case of McFarlane change
management procedure of cultural transformation at the Bank though employee engagement was
the central point but they were not involved. A sense of urgency amongst senior as well lower
levels employees. Though performance related parameters were designed but at every point a
step was undertaken there was no evaluation of the measure.
In the second step that aimed at building a coalition, implying effective people in their own
capacities for coordinating and communicating amongst activities (Thompson, 2010). Though
McFarlane was very aggressive regarding the idea of affecting and bringing about the process of
change, he was not focused on figuring out appropriate people in roles who could create an
impact and make change processes ore effective. The change management procedure at the ANZ
Bank was more haphazard in nature which included undertaking various activities at the same
point in time (Inalhan, 2009).
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The third step is the most critical step of all that encompasses forming of a strategic vision and
initiatives. In this step transformational leader is expected to analyse ways in which future is
going to be different as compared to its past by linking it directly to the vision. Vision of
McFarlane was to make ANZ a human bank where customer satisfaction could be attempted by
way of employee engagement strategies (Allen, 2007). Performance related objectives with Key
Performance Indicators (KPIs) were set to set apart desired outcomes with those of present
scores.
The fourth step encompasses envisioning people who would effectively manage the change
procedure. McFarlane visions regarding change was not very successful as there were not much
participation from internal stakeholders. McFarlane way of leadership was rather transactional
in nature compared to transformational styles. He linked performance based parameters by
linking them to financial incentives for employees, rather than taking them into confidence for
change management processes (Hamel, 2008). Opportunity to drive change can be enabled by
moving in similar direction as envisioned by leader with all employees could generate positive
outcome for changes within the organisation.
Fifth step in Kotter’s change management procedure encompassed removal of all barriers.
McFarlane leadership failed to visualize barriers and remove them. Primary barrier of
productivity that was affecting ANZ was its bureaucratic style of management and traditional
methods (Choi, 2011). Transforming this current style of management and bringing together
more participative style could enhance productivity and created more employee engagement
procedures. Employee engagement procedure is further encompassed by way of various
innovative job design that could lead to employee motivation and their satisfaction. Employee
engagement strategy can be brought about by leader and can lead to transformation in the
organisation in a productive manner.
In generating short-term wins, KPIs needed to be collected to track progress and energize
volunteers (Herold, 2007). Data was collected from ANZ in the first instance and then change
management procedure was impacted, in between there were no endeavors made. If the
management would have collected data to mark progress of change management procedure then
it could have led to better outcomes for the Company.
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In this step for sustaining acceleration for success, credibility for improved systems is developed
with policies and structures (Connelly, 2011). Initiating change until vision is achieved is a major
way to achieve success in change management procedure. The Bank did not collect much of
information on its employees for generating their effectiveness and efficiency. The Bank did not
highlight and provide clear path for its managers for guiding and arriving at results from their
employees.
In the final stage articulation between the new behaviour and organisational success is attained
for becoming successful (Shin, 2012). It is at this stage that the entire change process envisioned
is implemented. The focus of change management procedure at ANZ was blurred hence the
change management procedure could not be successfully attained to. McFarlane did accept that
the change management procedure at the Bank was not planned out in a proper manner that led
to its failure.
Primary vision of shareholders is to maximize the value of their investment in the Company, they
appointed McFarlane as a capable CEO for ANZ. McFarlane had a successful career and reports
that made him capable to handle the various challenges that was then posed by the Company.
Tracking personal charisma and his performance he was appointed to take charge of the bank
and to lead it. McFarlane was however, not a capable transformational leader, though he
envisioned various changes in ANZ (Turner Parish, 2008). In order to bring about changes into
the Bank he brought about several haphazard changes for keeping up with competitive nature in
the market. Though he could not establish changes in regards to acquisitions. All his endeavors
for generating profitability and sustainability in the bank was by talent management. He did not
undertake thorough data collection and analysis of his various human resources hence his various
schemes did not yield him much returns. Kurt Lewin’s model of change also proposes a three
step procedure for bringing about changes in an organisation as Freeze, Change and Refreeze
(Keller, 2009). In this procedure also change is encompassed in a step-by-step fashion and does
not progress with varied dimensions in a multi-dimensional manner. Though the organisation
yield success in its various employee related programs however it could be successful in its
leadership and cultural transition management.
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Recommendation and Conclusion
Analysis of the above conditions for change reflects an ambience of positive spirit within the
Company. While it is prevalent that organisational change is conducive to success and long term
sustainability of the organisation, in case not applied properly can lead to mismanagement and
loss for the organisation. The ambience of change as analysed in ANZ Bank was to bring about
positive changes such as to match its services to current prevalent conditions in the industry.
ANZ Bank needs to analyse appropriately its employees outlook prior to implementing any sort
of change management strategy. The Company also needs to adopt change management or
transformational leader, who has capacity to bring about changes within the organisation
appropriately. As the scope of the organisation extends to various domains and it being a service
related organisation, there needs to be appropriate change management strategies that is able to
incorporate adequate changes within its framework. Thus, while change management can
generate positive impacts, it needs to be carefully evaluated and then applied for generating
overall positive outcome for the organisation.
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Reference Lists
Aiken, C. &. 2009. The irrational side of change management. McKinsey Quarterly, 100-109.
Allen, J. J. 2007. Uncertainty during organizational change: Managing perceptions through
communication. Journal of change management, 187-210.
Avey, J. B. 2008. Can positive employees help positive organizational change? Impact of
psychological capital and emotions on relevant attitudes and behaviors. The journal of applied
behavioral science, 48-70.
Choi, M. 2011. Employees' attitudes toward organizational change: A literature review. Human
Resource Management, 479-500.
Connelly, M. 2011. Kurt Lewin change management model. . Retrieved January 2013, from
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Frankland, R. M. 2008. U.S. Patent No. 7,356,482. Washington, DC: U.S. Patent and Trademark
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Hamel, G. 2008. The future of management. Human Resource Management International
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Hayes, J. 2014. The theory and practice of change management. Palgrave Macmillan.
Herold, D. M. 2007. Beyond change management: a multilevel investigation of contextual and
personal influences on employees' commitment to change. Journal of Applied Psychology, 942.
Inalhan, G. 2009. Attachments: The unrecognised link between employees and their workplace
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Jack Walker, H. A. 2007. Factors influencing organizational change efforts: An integrative
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Keller, S. &. 2009. The inconvenient truth about change management.
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Klaus, C. 2014). Change Management. . Grundlagen und Erfolgsfaktoren.
Kotter, J. P. 2008. Force for change: How leadership differs from management. Simon and
Schuster.
Oreg, S. &. 2011. LEADERSHIP AND EMPLOYEES’REACTIONS TO CHANGE: THE
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Shin, J. T. 2012. Resources for change: The relationships of organizational inducements and
psychological resilience to employees' attitudes and behaviors toward organizational change.
Academy of Management Journal, 727-748.
Thompson, J. L. 2010. Strategic management: Awareness & change. Cengage Learning EMEA.
Turner Parish, J. C. 2008. Want to, need to, ought to: employee commitment to organizational
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