Analyzing Leadership and Change Management at ANZ Bank

This report examines the organizational transformation of ANZ Bank under the leadership of John McFarlane. It explores the key features of the change management program, including initiatives focused on employee empowerment, performance management, and CSR activities. The report evaluates the challenges faced by managers during the implementation of transformation strategies, such as resistance to change and communication issues. Furthermore, it analyzes the attributes of successful leaders in influencing and directing the change process, highlighting the importance of cultural change, stakeholder engagement, and performance measurement. The analysis demonstrates how effective leadership brought stability and improved the bank's financial performance, leading to a more human-centric approach and a commitment to financial literacy.

Running Head: Change Management
ANZ
Change Management

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Executive Summary
Australia and New Zealand Banking group is one of the largest commercial banks of Australia and
New Zealand, the bank also operates in the Pacific, Europe, Asia and The USA. Australian banking
industry was going through the rough face due to the global economic crisis and hundreds of bank
branches getting shut, ANZ was also facing troubles due to the on-going crisis, as the population had
lost their faith in the banking sector. In order to manage the crisis and pull up the socks, ANZ
appointed John McFlaren as its CEO who then took the onus of bringing radical transformation in the
banking culture of ANZ. He promoted good banking habits, laid emphasis on the performance
management system, rebuilt the brand image of the bank by foraying into CSR activities. It was John
whose brilliant leadership and ability to propose implement and execute the process of change
management brought in stability to ANZ banking group.

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Table of Content
Introduction...........................................................................................................................................3
Question 1: Describe and evaluate main features of organizational transformation under John
McFarlane tenure at ANZ bank..............................................................................................................4
Question 2: Challenges for managers when implementing transformation strategies within the
organization to improve the corporate brand of the organization through internal culture change....6
Question 3: Evaluate the attributes of the leaders and analyse their roles in influencing, directing and
managing the change process at ANZ....................................................................................................8
Recommendation to ANZ......................................................................................................................9
Conclusion...........................................................................................................................................10
References...........................................................................................................................................11

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Introduction
Australia and New Zealand Banking group limited is one of the largest and leading banks of Australia
and New Zealand. The Bank with a legacy of over 170 years has its headquarters in Melbourne,
Australia. It is a public listed bank which employees over 35,000 people and services and operates in
30 countries spread across Australia, Pacific, Asia, Europe, Dubai and The US. ANZ provides a range
of Banking and financial services to retail, small and large businesses, corporate and institutional
customers. ANZ is really a strong organization when it comes to following and abiding by its
principles, the company proudly stands for Integrity, collaboration, accountability, respect and
excellence, the company strives towards a culture living these values. ANZ has been at the helm of
taking financial literacy to another level and spread awareness around the banking habits of the
people, some of its landmark programs Saver plus and money minded have been extremely
successful in leading the way towards financial literacy. The company has seen all the phases of
business cycle, moving from as high as crest to as low as trough, it was the able leadership of John
McFarlane that the company went through organization transformation and landed in a profitable
state.
The purpose of the report is to answer the questions based on the case study which will provide
insight on the organization transformation in underwent under the leadership of John McFarlane,
understanding the challenges managers face in implementing transformation strategies and
evaluate the key attributes of successful leadership in influencing the process of change
management.

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Question 1: Describe and evaluate main features of organizational
transformation under John McFarlane tenure at ANZ bank.
John McFarlane was appointed as the CEO in the late 1900s owing to poor performance of ANZ; he
with his exceptional leadership skills launched an organization transformation program, which was
aimed to achieve a long term competitive and sustainable advantage for the company. John was
widely appreciated by the management for his leadership skills leading to better financial
performance of the bank (Liu, Cutcher and Grant, 2017)
During 1900s the banking scene in Australia has worsened, people had a perception that banks were
not doing well for the community and several banks were getting shut. John was a smart leader who
had a knack of picking up things before anybody could spot it, it was then he decided that change
has to be brought in the Bank to ensure sustainability. Some of the radical transformation he did in
his tenure was:
 He noticed that there were not enough number of females at top ranks, he decided to
change that and took action to increase the head count of females at senior ranks.
 Was the first one to take a serious outlook on the aspects of corporate social responsibility
and the ways it can benefit the community.
 Reducing the risk profile for the bank by moving out of the investments in the emerging
markets.
 John converted ANZ to a Bank with a human face and instigated a strategy of Perform, Grow
and Breakout.
 John after commissioning McKinsey to conduct a study on the culture of the banks and
understanding perception of the employees regarding the bank and its practices realized
that employees feel banks have silo mentality and processes were formed on the basis of
senior managers, he changed the same by taking the concerns of the employees seriously by
empowering them in decision making process.
 Removing too much of Bureaucracy from the system by driving cultural transformation
through Breakout Workshops, charters and consultancy. He aimed at giving employees lot
more freedom, responsibility and feedback.
 Using Performance management to measure success of the breakout program and its
effectiveness on the employees.

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 Managers were asked and encouraged to build a positive relationship with the employees
and mentor them on a regular basis.
 Paying of half year bonuses to the employees as a reward system to motivate them to
perform with enhanced productivity.
 Training and development plans for the employees and asses them internally to evaluate
their performance and do an internal placement for senior level positions.
 Plotting entire employees on a curve where 20% will be at the top, 70% at the middle level
and remaining 10 at the bottom and mark the compensation according to the curve.
 Building of leadership program for talented staff with the recognition and identification of
the leadership potential in the junior employees.
 Launching graduate programming in its recruitment process where the graduates get to do
job rotation and widen their skill sets.
 John took the onus of building organization wide engagement program, he did not go down
with top to bottom approach but he insisted on having engagement at all the levels in the
organization.
 Ensuring that all the employees in the organization understand the importance of keeping
the stakeholders happy and that there interest should be kept higher.
 A lot of branches of the banks were getting closed at the time John joined the ANZ, he put an
end to it by making it clear that no more branches will be closed.
These were some of the transformations which John brought in the organization and improved the
state of the company. John understood that change management is a tough job and if not
implemented properly could break the company apart. Change management is the sequence of
steps or activities that a leader follows while driving individual transitions to achieve the desired
outcomes (Doppelt, 2017) John applied some of the principles for leading change management at
ANZ:
 Leading with the culture
 Starting from the top
 Involve every layer of business organization
 Engagement at all levels(Hayes, 2014)
 Pride builder
John ensured that the change was made at every level of the organization and transforms the
organization by implementing some of the best practices of performance management, reward and

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recognition, employee empowerment and so on. He was successful in driving the change and take
ANZ out of its misery.
Question 2: Challenges for managers when implementing
transformation strategies within the organization to improve the
corporate brand of the organization through internal culture change.
Organizational change is one of the most difficult tasks at the hand of managers as employees fear
change and hence shows resistance when the organization is trying to bring in a change in the
culture, processes, technology, performance management, current policies and procedures. The first
and the foremost reaction towards change is negative, hence managers have a tough job at hand
when implementing transformation strategies within the organization. An organization goes either
through development, transformational and transitional change. In case of ANZ the change was
transformational in nature. A transformational change come with uncertainty and is determined
through trial and error as and when any new information is gathered. Some of the challenges which
are faced by the managers in the present era are:
Planning the extent of change: As in the case of ANZ John was quite clear of the changes he wanted
to impose in the organization to get the trust of people back in the banking system, hence he
ensured that everyone in the organization understood the concept and the rationale behind the
change. At times manager don’t plan the extent of change and thus in the middle of process them
stumble (Worley and Mohrman, 2014)
Determining the areas of organizational change: There are different function in an organization
related to marketing, technology, HR policies and practices, culture and so on, hence it is extremely
important to identify the areas of change for the organization and step by step take on the areas
which are identified (Ferguson, Hall and Hopwood, 2015)
Resistance to change: One of the fierce challenges which managers encounter in the process of
transformational change is the resistance of the employees. Employees resist the change because of
fear of unknown, if the manager is not able to address their fear it causes a situation of mayhem and
it becomes a big obstacle in the process of change.

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Communication challenge: To implement any change within the organization it is extremely
important to communicate with the team and the employees. Employees should be made to
understand the reasoning behind the change and the goals to be achieved with the implementation
of change. Lack of communication creates trouble for the organization and the managers (Van der
Voot, 2014)
Lack of consensus: In the era of globalization all the organization have diversity in the workforce and
it becomes quite a task at the hands of the managers to bring them on the same table and get a
consensus from them regarding the change in the policies and procedures. Not reaching consensus
causes trouble for the managers.
Managing conflicts: Conflicts are sure to arise in the process of change management among
individual teams and amongst the managers as well, conflicts might be inter and intra department
which could affect the working of a team, hence it is the responsibility of the managers to manage
any arising conflicts in the teams and individuals and create an environment of harmony.
Lack of employee involvement: Change impacts each and every employee of the organization and
they show resistance to the change, they try to keep themselves aloof from the process of change in
order to show their resentment to the organization. In the process they miss out on important
training and new policies which will be implemented creating troubles for managers in the future.
Bad culture shifting planning: Big organization have deep rooted culture within them and the
employees are living their professional lives by respecting the existent culture as they believe that
the organization believes in the culture set by the organization. Shifting in the culture and the values
makes the employee think poorly of the organization and start doubting the intentions of the
managers.
Complexity of the organization: Organization have different hierarchy, some follow functional,
divisional, matrix or flat hierarchy, it all depends on the size of the organization and its business
function. The more complex and big the organization is the difficult it becomes to permeate the
changes within that organization.
Swift change: Management always needs quick result of the change process and they put in
pressure on the managers to come forward and bring the change as swiftly as possible. But in reality
change takes time in adoption, but in the meanwhile it causes a major challenge for the managers to
maintain harmony with the management and the employees.

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Question 3: Evaluate the attributes of the leaders and analyse their
roles in influencing, directing and managing the change process at
ANZ.
Leaders can be considered as the most important machinery of the organization as without an able
leader there are very less chances for it to flourish and create a name for itself. Some of the leaders
are born with leadership skills and some are trained to become a leader, but in all the cases leaders
have the power of influencing teams and bringing a sustainable change within the organization. In
the light of the case, there are two leaders who were important to ANZ; John McFlarne and Smith:
John McFlarne
 John McFLarne was a visionary leader who understood the challenges ANZ was facing and
was quick to come up with the solutions.
 John McFLarne believed in building teams and positive synergies in and around the
organization.
 He was extremely passionate about his role in the organization and wanted to bring the
change for the community.
 He was the first person to utilize the concept of corporate social responsibility as good to the
community building and for the benefit of the society.
Michael Smith
 He transferred his experience of Asian market to ANZ, an attribute of leaders to impart their
learning to the organization for their growth and development.
 Quick adaptability was shown by Smith while tackling the challenge of the Global financial
crisis; it was truly a quality of leader to go head on with the challenge.
 Smith understood the importance of banks being customer centric in nature and
implemented the same within the organization.
 Smith was extremely committed towards its staff and was a good decision maker.
Roles in managing the change process

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Adopting the mentality of change management: John joined at the time when the company was not
in good health, he quickly understood the need for change, and adjusted his mentality towards
change management. He was clear in his approach and adopted mentality of change management
Clarity of vision and communicating it effectively: On identifying some troubles in the organization
when two employees of ANZ were doing some illegal trading, Smith took a strict call against the
employees and resonated in the organization that such thinks will be dealt with seriousness. He
came up with a reputation risk framework to safeguard the organization in the future (Nahavandi,
2016)
Being accountable and transparent: The leaders have to be responsible for their actions in the
organization, it is pertinent of them to take accountability for their actions and at the same time be
transparent while communicating with the employees. It is highly advised that the leader who is
accountable and transparent in their action built a strong rapport and support with its employees.
(Northouse, 2015)
Making tough calls/decisions: John and Smith took certain calls which were tough for them as an
individual, but were right for the organization. Cutting of jobs, bringing new culture, spend on the
transformational programs were some of the examples where they had to take tough calls in their
leadership
Engage with the employees: Change is not easy to bring in the organization as there are many
challenges clouding the organization and the managers. It is the role of the leaders to engage with
the employees at all the levels and make them understand the process and rationality of the change
management. Keeping the communication open with the employees and addressing their fears and
concern settles positively with the employees and they end up appreciating the change and bring
their unfathomable trust in the leadership and the organization (Bolman and Deal, 2017)
Recommendation to ANZ
Openness in communication
It is often seen that grapevine is the biggest threat to the organization, hence if the communication
is being taken care by the management itself, no rumour or gossip mill will take place in the
organization which will lead to less resistance while implementing the change and will also create an
environment of positive job satisfaction.

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Practicing strong culture in the organization
An organization is driven by strong culture and values that are imbibed in it, ANZ struggled in the
past because of weak culture and hence organization transformation had to be introduced to build
strong culture, which was very much effective in strengthening the organization
Employee empowerment
Employees are the biggest pillars behind the success of any organization; there contribution towards
the organization is resolute. Hence it is very much advised to empower the employees so they can
contribute by giving positive feedback to the organization and can help the company understand the
gaps in its current practices.
Conclusion
ANZ is a perfect example where the leaders showed their exceptional leadership skills in pulling the
transformational change in the organization and pave the path of the company towards success.
Change management is not an easy task when it comes to implementing it, but with good planning,
monitoring, organizing and controlling the process it leads to the intended outcomes for the
organization. ANZ did a commendable job in bring synergies in the organization by its Breakout
charters and workshops, by implementing a new performance management program, engaging the
employees at all levels, taking their feedback seriously, starting with leadership development plan
for the lower level employees, providing platform for the talented staff to grow and flourish and
many more. All these transformational changes in the process and culture stuck a chord with the
employees and for the same reason John are seen as a great leader and influencer of change
management. John was really brilliant in picking up the things which his competitors could never
notice, he had an eye towards the future and he was a man on mission; to bring transformation in
the business culture of ANZ and restore the faith of the people in the banking system. ANZ case can
be understood as one of the best transformational management in an organization, which despite
some of the flaws succeeded in achieving the outcomes it intended with it Transformational
program.

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References
Bolman, L.G. and Deal, T.E., 2017. Reframing organizations: Artistry, choice, and leadership. John
Wiley and Sons.
Doppelt, B., 2017. Leading change toward sustainability: A change-management guide for business,
government and civil society. Routledge.
Ferguson, P.W., Hall, G.E. and Hopwood, J.D., 2015. Leading and Managing the 21st Century
Research University: Creating, Implementing, and Sustaining Strategic Change. International Journal
of Leadership and Change, 3(1), p.4.
Hayes, J., 2014. The theory and practice of change management. Palgrave Macmillan.
Liu, H., Cutcher, L. and Grant, D., 2017. Authentic leadership in context: An analysis of banking CEO
narratives during the global financial crisis. human relations, 70(6), pp.694-724.
Nahavandi, A., 2016. The Art and Science of Leadership -Global Edition. Pearson.
Northouse, P.G., 2015. Leadership: Theory and practice. Sage publications.
Van der Voet, J., 2014. The effectiveness and specificity of change management in a public
organization: Transformational leadership and a bureaucratic organizational structure. European
Management Journal, 32(3), pp.373-382.
Worley, C.G. and Mohrman, S.A., 2014. Is change management obsolete?. Organizational
Dynamics, 43(3), pp.214-224.

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