Report on ANZ Banking Corporation: Change and Leadership Analysis

This report provides an in-depth analysis of the organizational change management strategies implemented at ANZ Banking Corporation, focusing on the leadership of John McFarlane. It examines the challenges faced by the bank, particularly in the 1990s, and the subsequent initiatives to improve its performance and public image. The report details McFarlane's approach to cost-cutting, market expansion, and restructuring of operations, including the 'Perform, Grow and Breakout' program. This program aimed to transform the bank's culture and values through workshops and consulting, with a focus on employee development and performance management. The report also discusses the specific phases of performance management and the strategies employed to align employee goals with organizational objectives, ultimately leading to a more customer-focused and employee-centric banking environment. The analysis covers key aspects of leadership attributes, internal changes, and the overall transformation of ANZ into a leading banking institution. The report emphasizes the importance of adapting to the changing needs of the banking industry and the impact of strong leadership on organizational success.

Running head: ANZ BANKING CORPORATION
ANZ BANKING CORPORATION
Name of the Student
Name of the University
Author Note

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Executive Summary
The given report throws light on the organizational change management of the banking
corporation of ANZ. ANZ is the Australia and New Zealand Banking Group Limited, which is
one of the strongest and oldest banks in the country of Australia. The given assignment follows a
structured format whereby an introduction elaborating the background of the organization has
been provided. This is followed by the answers to the three questions given in the case study.
Separate headings have been formed and the answers have been stated. The last part of the report
comprises of a conclusion, which wraps up the report.

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Table of Contents
Introduction..........................................................................................................................3
Answer to the first question: Attributes related to Change..................................................4
Answer to the second question: Internal Change in the Organization...............................10
Answer to the third question: Leadership Attributes.........................................................11
Conclusion.........................................................................................................................12
References..........................................................................................................................13

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Introduction
Australia and New Zealand Banking Group Limited, better known as ANZ bank is
considered one of the largest as well as the most successful organization in Australia. It is also
considered a leading bank in New Zealand. The case study analysis the bank`s case. The
organization started its journey as the Bank of Australia in 1835, in the city of Sydney
(Anz.com.au. 2018). In 1838, the company started its office in Melbourne where its head quarter
is located in. The organization is a popular attraction for investors with its majority of
shareholders in Australia. The company also operates in several other countries apart from New
Zealand and Australia, which are Europe, the Pacific Asia and Dubai. Since its inception, the
organization is one of those few companies who have been able to maintain a good performance
by reflecting consistent profits (Arnold et al. 2015). Even during the global financial crisis in
2009, the company was able to upheld their name and earn profits.
The banking corporation has been divided into five prime units, which comprise of
Australia, Asia Pacific and Australia. The retail services offered by the company include services
like credit card services, mortgages, deposits and other banking transactions. The organization is
involved in various fields like Wealth Management, Institutional and Operations Technology and
Shared Services and commercial banking (Buble, Juras and Matić 2014). The report elaborates
on the three broad aspects given in the case study which range from the elements of
organizational change, the various challenges faced by managers to implement the internal
change and the key attributes of the ANZ leaders.

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Answer to the first question: Attributes related to Change
In the year 1990, John McFarlane was appointed as the Chief Executive Officer at the
ANZ. This move was taken after the organization was going through certain turbulent times. Mc
Farlane along with his management team brought about a huge change in the organization. The
primary motive of the given programme was to bring about considerable change in the
operations of the bank and to bring about sustainable innovation and achieve comparative
advantage. The various highlights of the program and various characteristics have been
discussed in the given case (Buble, Juras and Matić 2014). After he was appointed as the CEO, it
was seen that the bank had started making considerable profits and McFarlane was praised for
his leadership style and management capability with special reference to bank finances. At that
time, the banking industry of Australia had been facing considerable problems and distrust
prevailed. It was at the same time when many banks had closed down, as they could not cope up
with the various charges, which had increased tremendously at that time.
The distrust had raised and prevailed in the banking industry was because the perception
of the various citizens of the country had changed about the given company. This distrust was
converted into an advantage by the new CEO of ANZ who undertook major steps to remove the
distrust and improve the image of the bank in front of the nationals (Canterino, Cirella and Shani
2017). McFarlane took various steps to improve the scenario. Some of them have been stated
below:
 Criticism of various banks, which had taken actions and retreated from serving the
various rural communities. The rural committees of Australia comprised of various
tribal’s who felt left out.

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 Addressing the issues relating to empowerment of women in the banking Industry in
Australia. He believed that women were equally capable and should be given higher roles
in various banks.
John is also considered one of the first few leaders in the globe who had taken interest in
the issue of the corporate social responsibility that needed to be taken by the companies for the
welfare of the society they function in. His immense talent in this particular field helped him to
gain a competitive advantage in this regard and helped the bank to operate to the new operations
effectively. These efforts of the McFarlane helped the citizens to view the banking industry in a
new light once again.
When John McFarlane had joined the organization, he had promised to bring about a vast
number of changes in the organization (Cooper 2015). He had intended to reflect profits in the
bank and change the perception of the people. The primary action taken by the CEO was that he
started a cost-cut drive, which led to the reduction of redundant bank labor in the branches. He
also believed at lowering the risk quotient of the bank and investing in the recently emerging
markets. The transactions and operations related the head office of the bank was sent through a
complete change. The operations were restructured, streamlined and thousands of unnecessary
staff was removed from the office. The costs had risen tremendously before John was appointed
which was reflected in the cost to income ratio of the bank. After his appointment, the ratio was
brought down adversely. McFarlane realized the importance of the retail customers and shifted
their focus from corporate clients to the retails one. His estimate was correct and the business of
the organization increased considerably.

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The organization took its first step towards changed in the year 2000. The CEO of the
bank wanted to change the positioning of the bank into a bank with a human face (DuBois et al.
2015). The leadership team comprising of various executives, which was lead by John, was
named the Perform, Grow and Breakout, as a management consultant, McKinsey and Company
was appointed which was trusted with the responsibility of providing the company with new
solutions. At first, the consultancy was given the responsibility to study the culture of the bank.
The results displayed various problems relating to the present values of the banking organization.
It also showed various problems relating to the value orientation of the various employees of the
company and the way in which the bank was being perceived by the bank. The organizational
report reflected to a positive result with respect to result orientation and goals of the organization
(Farrell, Kawecki and Branham 2017). However, this was not the case of orientation of the
employees who believed that the banking organization ANZ was filled with hierarchy and
extreme bureaucracy. They also believed that the management withheld hold amount of relevant
information with them and that there was a lack of transparency in the organization.
Hence, after this observation was made, it was seen to it that the values and cultures of
the organization were made based on the viewpoint of the employees as well and not just the
vision of the senior management.
McKinsey also compared the bank to various other leading organizations present in the
country. In terms of financial performance and operational excellence, the company fared
extremely well. However, as stated earlier the company scored low in comparison to others in
terms of values. Eleven measures, which included aspiration or mission, goals or targets,
feedback related to the performance of the business unit, organizational approach, financial
control, coordination and control, motivation related to opportunities, consequence management

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and motivation related to values, were considered (Fernandez 2017). John McFarlane after the
given report formulated strategies under the Perform, Grow and Breakout Programme.
As analysed from the given result of the report by McKinsey, the primary focus of
McFarlane’s strategy related to the Breakout, which was related to the cultural orientation and
value system of the organization (Keskes 2014). After the given strategy was carried out, the
banking corporation formed a new process in reference to the transformation of culture and the
major initiatives taken by the company were:
 breakout charters
 breakout workshops and,
 Breakout consulting.
The emotional ability and development of personality was the main area of concentration
in the area of employees with respect to the Breakout workshops. The business projects were the
main area of the breakout chapters. These projects, which were chosen, were closely related to
the various culture and value aspect of the bank. The Breakout consulting refers to the process by
which the diagnostic and consulting services are provided in the organization so that they are
able to help the business units in performing better.
One of the key points of the breakout program was that it was carried out on all the
employees in the given organization and even across the various units as well as branches of the
baking corporation (Malhotra and Hinings 2015). The given program took place for a period of
around two to three days. The primary motive of the program was to provide the various
employees the ability and the tools to realize their given potential and think in detail about the
various motivating factors present in the given organization. The purpose of the program also

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included towards helping the given organization in increasing its engagement of the employees
and to help it to optimize its work processes. The aims as well as areas of advancement were
recognized by the various employees with the help of this program.
The given change was brought about in the culture of the organization after the
realization and observation of the CEO of the given organization. The Breakout project was also
followed by a performance management of the employees whereby the employees of the
organization could be retained and build (McCleskey 2014). The major phases relating to the
performance management program relating to ANZ are:
 Performance planning
 Coaching which is interrelated to the performance of the employee and,
 Assessment of the given performance.
It was realized that the process of performance management is of utmost relevance and
that it needs to be clear and also measurable. The targets that will be set out by the management
for the employees should be realistic. The manager and the employee will be required to sit
together and discuss the various targets. The first phase of performance management involves
performance coaching which requires meetings at regular intervals of the employees with their
managers so that their capabilities are bold up throughout the year. This helps in tracking of the
progress. The primary focus of the move is to make sure that the performance and value system
of the employee is developed according to the set plan (Monzani, Ripoll and Peiró 2015). The e
particular program at the ANZ Banking Corporation also aimed at development of the personal
goals of the employee.

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Hence, in the section, the various highlights of how the organizational transformed over the years
has been elaborated.
The above-discussed points are therefore the major features of the transformation of the
organization after the appointment of McFarlane as the CEO of ANZ.
Figure 1: The strategy of the ANZ Corporation (Source: Anz.com.au. 2018)

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Answer to the second question: Internal Change in the Organization
Under the supervision and guidance of John McFarlane, various changes took place
throughout the organization. These changes could be easily witnessed and were relevantly
designed for identifying and developing talent throughout the organization. The primary focus
of the banking corporation has always been on the learning of the employees at every level of the
banking department (Nanjundeswaraswamy and Swamy 2014). The bank makes use of advanced
global systems in order to see to it that the right knowledge is given to the right customers when
required.
The management also aimed to bring about an internal cultural change in the
organization, which it implemented through three basic leadership programs that were introduced
by John McFarlane. He brought about huge investments in the leadership programs.
The given program started with identification of efficient leadership in the organization,
which was carried out by the human resource department of the organization. The HR managers
and the line managers conducted a program together, which was popularly known as “The
Emerging Leader Radar Talent” program (Saeed et al. 2014). The given program conducted
steps, which were useful in identifying young talent in the company.
However, while this program was being implemented, the company was faced by certain
challenges. These challenges include challenges like engagement of the various employees.
Engagement of the various employees proved to be a huge challenge because the organization is
relatively large. McFarlane also faced a huge amount of challenge in getting support from all
the employees. The employees were quite restricted in their thoughts with respect to culture.
They did not want new reforms, which according to them would result in the mitigation of the

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essence of the organization (Saleem 2015). The action plan in order to address the given
challenges was that the organizational change was not only bought about in the lower part of the
organization but also in the top management. The change, it was decided that will be bought
about in the top management first and then in the rest of the organization. This fulfilled the main
aim of the CEO, to build a trust factor among the employees.
The data and statistics, which were analysed, post the change as per the staff survey
reflected that there was significant improvement. The satisfaction level has improved greatly
from 50% in 1997 to 62% in the year 2001, 78% in 2002 and lastly 85% in the year 2004.
Since the adoption of the above stated program and its success, the ANZ has become one
of the leading organizations in the globe (Sethuraman and Suresh 2014). It has become the most
engaged workforce around the globe. Leaders who want to bring about the change in the
organization need to take steps from the given.
Another primary challenge that the company faced was with regard to the tenure of the
CEO, John McFarlane. There was a time when the bank was exposed to the telecommunications
industry. The industry had collapsed in 2000 and this has affected the organization adversely
(Prooijen and Vries 2016).Other banks started giving the organization fierce competition during
the reign of McFarlane. Hence, during this phase, he undertook certain wrong decisions, which
had an adverse impact on the organization.
Answer to the third question: Leadership Attributes
The CEO of the company, John McFarlane entered the organization at a time when the
organization was under a crisis phase. The role played by the leader was that of providing
guidance to the rest of the organization and taking the organization to a phase whereby the whole

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structure of the organization had to be changed (Shani and Noumair 2017). McFarlane took a big
initiative and made sure that the image of the company was changed to `a bank with a human
face`. McFarlane also started concentrating on Corporate Social Responsibility and was one of
the first leaders to do so. Another good characteristic about the author was that he realized the
importance of employee involvement in an organization and involved them in various
performance management activities and setting the targets task.
Michael Smith replaced McFarlane as the CEO of the ANZ in 2007 and took the
organization forward with his capability. Under the guidance of the new leader Smith, the
organization got the AA certification. Smith`s main goal was to make ANZ one of the most
popular banking corporations round the globe (Sommer, Sprog and Andersen 2017). Various
losses of jobs had resulted from the organizational change activities. Hence, to avoid this Smith
focused on efficiency and transparency, which aimed to improve the profitability of the
organization. The current CEO of the organization is Shane Elliott. The banking industry is
undergoing changes right now and these will be reflected and acted upon by him.
Conclusion
Therefore, it can be concluded that leadership plays a key role in the transformation of
the organization and that the organization can undergo a change only if it gets proper guidance
and help. The change in the cultural process of the organization is not an easy task and involves
change in the attitude of the employees as well. The middle level managers have a lot to learn
from the senior leaders as well. Hence, it would not be incorrect to say that organizational
change is a result of leadership style.

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