Change Management and Organizational Leadership in ANZ Bank - Report

This report delves into the critical aspects of change management and organizational leadership, utilizing the ANZ Bank as a compelling case study. It explores the challenges organizations face during periods of change and crisis, emphasizing the need for effective leadership and change management expertise. The report examines organizational transformation, strategic changes, and the implementation of leadership strategies, such as those employed by John McFarlane at ANZ Bank. It analyzes challenges related to stakeholder management, re-engineering business processes, and data migration. The report further discusses the impact of leadership styles, such as situational leadership, and the importance of employee engagement and cultural change in achieving successful organizational outcomes. It highlights how McFarlane addressed issues like risky financial debts, poor organizational culture, and customer dissatisfaction through strategic initiatives and a focus on employee values. The report concludes by offering insights into overcoming resistance and ensuring the successful implementation of change management strategies.

Running head: CHANGE MANAGEMENT AND ORGANIZATIONAL LEADERSHIP
Change management and organizational leadership
Name of the student:
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Table of Contents
Introduction: 2
Question 1: 3
Question 2 5
Question 3: 7
Conclusion: 10
References: 11

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Introduction:
Change is the most constant factor in any organizational sector. The most important survival
strategy in the present of all the business companies is the constant process of change to entertain
the customers and their ever-changing demands. It has to be mentioned in this context that the
economy has been in a very whimsical state ever since the global financial crisis, and the danger
of recession prevails all the time. Along with that, in the past few decades, the consumerism has
grown exponentially as well, in the present, there are a thousand options available for the
consumers on almost every sector and retaining customer loyalty has become more difficult than
ever. Hence, the business companies have increasing competitive and in order to stay ahead of
the game, each business sector attempts to go through a constant process of change at all times
(Anderson and Anderson 2010).
It has to be mentioned in this context that the implementing any change in the organizational
sector is associated with many risks and there are various challenging elements that can serve to
be resisting factors in the process of successful change implementation. Now in the light of the
present economical conditions, no business sector can avoid the constant change process. That is
the reason why the need for efficient change management and leadership expertise is required, so
that the resistance and non-compliance to the change implementation can be successfully
overcome (Hayes 2014). This report will attempt to discuss the challenges that a business
organization can face when accounting any change or crisis, and will discuss how these
challenges can be overcome with adequate leadership and change management taking help from
a case study.

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Question 1:
Organizational transformation is a key facilitator of change in the corporate sector and it has
to be mentioned that the impact of this transitioning element imparts the greatest effect on the
operational and structural characteristics of an organization. In the case study provided for this
assignment, the rise and the organizational challenges faced by the ANZ bank has been
discussed. This bank has been the pioneer in providing economic literacy and inclusion in the
nation and has had a success path to behold ever since its establishment in the late 1800s.
However, like any other successful business corporation, there have been many challenges that
the organization has faced during the journey of its rise in the economy. On a more elaborative
note, in the late 1990s the company has been facing issues like risky financial debts, poor
organizational culture and structure, reduced employee morale and most of all customer
dissatisfaction. All of this factors have been affecting the brand image and market stability of the
bank and there has been a crucial need for efficient leadership to improve the situation, which
has been attempted by the recruitment of Mcfarlane as the new CEO. The leadership changes the
newly appointed CEO engaged in were successful in bringing about many benefits to the
organization including cost- cutting, job cuts, and massive streamlining and outsourcing;
however the most important step taken by this leader has been the organizational transformation
(Doppelt 2017).
The very first huge change in the operational characteristics of the bank had been to
incorporate the strategy Perform, Grow and Breakout. Three of these strategies were indicated at
delivering satisfactory financial performance, securing brand image and attempting sustainable
leadership and long-term success. According to the most of the theories on organisational change
management, any organizational transformation can be directly associated with restructuring and

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redesigning the business processes of the particular organization (Dixon, Meyer and Day 2010).
The above mentioned changes not only attempted to overcome the performance and brand
reputation issues that the bank was facing but redefine the operational characteristics of the bank
itself (Giltinane 2013). According to the theory of strategic transformation, any organization that
attempts to change and modify the strategies is place for regaining the sustainability and
competitive advantage in the market is going through a steady corporate self- renewal. Mcfarlene
attempted to follow this organizational transformation type, redefining the business objectives
and activities in order to provide the bank a improved and renewed brand image in the consumer
market. The breakout strategy is the conspicuous example, which helped Mcfarlene impart a
string cultural change in the organization (Edwards 2010).
In this process of cultural change Mcfarlene attempted to discover al the discrepancies in the
organization, undertake performance management initiatives that helped the individual issues of
the employees be identified and addressed for improved performance and productivity. Along
with that, the performance review and talent acquisition programs arranged in the bank helped
increase employee engagement and loyalty in the organization. The cultural change implemented
by Mcfarlene extends to the three phased processes of performance management and talent
acquisition. All these changes helped rebuild the core structural strengths of the organization and
overcome the organizational discrepancies and issues in the bank. Reflecting on the change
management and leadership attempted by Mcfarlene as a new leader, it has to be mentioned that
the change management model of McKinsey comes the closest, this a 7 step process of
implementing and managing change, shared value, strategy, structure, systems, style, staff, and
skills. In the organizational transformation attempted the actions by Mcfarlene also attempted to
strategise the restructuring procedure for enhanced acceptance to the changes in the business

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process management structure and system (Hanafizadeh and Ravasan 2011). Along with that, he
attempted a completely new style of leadership and focussed on the staff and their skill
enhancement and recognition, by developing their talents and rewarding their performance.
Overall, as a leader, McFarlane attempted to incorporate a shared value in the entire staff of the
organization so that the changes can be accepted and complied to efficiently. The leadership
style that McFarlane attempted is closer to the situational kind, as he also had to understand the
issues that the bank had been going to through and adapt to the leadership style and strategies
that worked best for the situation (McCleskey 2014).
Question 2
The challenges that are faced by the managers in implementing the transformational
strategies are related with the results based on the community measures, people, customer,
finances and performance management undergone by the managing directors to the
divisional managers, customer facing staff and front line support.
 The first challenge includes the identification of the measurable and tangible benefits that
can be accrued over the timeline of several years. Managers often fail to analyse the
benefits at the beginning of the transformations. Without the well thought out plan, there
exists a risk of the program getting scrapped.
 Banks mainly face the two types of challenges regarding the availability of the
commitment and large amount of budgets by the stakeholders that add impractical
requirement into the scope, which increases risks associated with delivery. Constricting
the regulatory scenarios forces the bank to move into a fast changing environment which
increases the risk associated with the success of the programs undertaken. Multiple

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stakeholders that arrive with different types of requirement risks the overrun of costs
(Infosys.com, 2018).
 Stakeholder management, communication and governance- large banks function in the
form of a model that depicts the organizational structures. Such functioning is completely
based on the core banking functions. Thus, when a program needs to be executed that
plans to transform the conduct of business and realign to the existing flow of the
functions, there comes the hindrances. The change in the organizational functioning
prevents the realignment of the previous flow of functions. Studies have shown that
managers have reported to be experiencing conflicts between the line organizations and
the project. While companies due to trans formational changes have performed in a
redundant way due to the harmonized way of execution of the projects.
 Re-engineering the business process- most of the companies try to infuse and adapt the
old practices in to the new systems. This hampers the modern day functioning of the core
banking sector that greatly rely on the technology. The implementation structure is
complex and the lack of the documentation inhibits the proper functioning of the
individual structures (Infosys.com, 2018).
 Organizations always face the problem of having a transformation as a whole or bring in
transformation in a phased manner. The choices made are based on the ability of the
manager to execute the strategy; the availability of the skilled worker and teams often
impedes the proper execution of the plans; another aspect is the control on the requests
related to the change of management. Another important aspect is the identification of the
risks and the realization of the values.

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 Winning formula and the methodology of implementation- transformational strategies
require the proven and the robust implementation methodologies. The misconception that
one solution can solve all the problem is wrong and the managers seldom make this
mistake when undertaking the transformational plans. Banking organization needs to
move out of the comfort zone of taking ideas from the top managers to solve a
transformational change. Whereas, there is a need to change the age old practice and
adapt to taking the suggestions from the experts that can deal with the problem
effectively.
 Challenges arise when the core banking systems do not function properly with the
integrated working systems. The vital design decisions are not arrived at carefully and
this affects the automation of the workflow, performance of the workforce.
 Migration of data- The old systems often has the issues of inadequate data, lack of proper
documentation and insufficient expertise. Mapping of the data, data cleansing and data
extraction are one of the biggest bottlenecks in implementation of transformation. The
degree of the complexity increases to a large extent when the migration of data takes
place across the different types of systems. The designs are faulty and migrations seldom
are not done in a proper way, which may result in to derailment of the whole execution
plan. Managers must emphasize on this aspect of the issue when considering the
implementation of the transformational plan (Infosys.com, 2018).
Question 3:
The Company ANZ Bank, is undergoing certain instabilities regarding the bad debts, low
employee morale, poor organization, and customer dissatisfaction which is plaguing the
company since the mid of 1990. After such poor performance of ANZ Bank for several

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years, ANZ Bank appointed John McFarlane for the post of CEO in the late 1990s. Along
with the new management team, McFarlane managed and developed a program for the
organizational transformation. The transformational change is aimed towards the sustainable
and competitive advantage over its competitors in the worldwide market. The company under
the apt leadership quality of McFarlane showed gradual changes in the financial
performances. However, in the late 1990s there was a sudden spread of distrust and ill will
towards the major banks located in Australia. Following such distrusts led to the closure of
the several branches and increase in fees. There was a widespread perception that the banks
are not doing the right thing by the community, to their customers and their employees.
McFarlane sensed the major issues related to the bank closure and directed a freeze on the
closure of the banks and inhibited the retreat from the rural communities. In the year 2000,
step was taken towards the transformation of the organization with an aim to inculcate and
convert ANZ Bank in to a bank with human face. A study was conducted within the
organization functioning of the ANZ Bank. The data from the study revealed that, there were
discrepancies related to the existing employee values, personal values and bank values and
the organization perceived the banking functioning. McFarlane emphasized that the bank
need to develop values based on the employee input, while not on the values that were
dreamt by the senior managers. According to this scenario, McFarlane displayed a situational
leadership. Goleman theory of situational leadership, which emphasize on the leadership
quality of authoritative leader. This theory states that the leader is very good at analysing the
problems and the challenges. This style of leadership is accurate for an organization which is
drifting away from the targets and the aims (Giltinane, 2013).

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Later on, The ANZ Bank appointed the McKinsey & Co to conduct a thorough study of
the culture in bank. McKinsey also conducted a benchmark against Australia’s other highest
performing organizations. After analysis of the report of McKinsey, McFarlane stated that
breakout is a must for the stakeholders of the bank, which includes the employees,
shareholder, customers and the broader communities. Thus, according to him the removal of
the bureaucracy within a banking organization will provide people with a lot of freedom,
profound responsibilities and accurate feedback which will contain both the negative and
positive feedbacks. Change in culture is an amorphous concept. McFarlane recognized that it
is important to both track and measure the success the breakout. Hence, it was seen that
management of performance is an integral part of ANZ’s breakout strategy and people
capital. This particular case can be related with the Hersey-Blanchard situational leadership
theory which is based on the variable leadership that depends on the situation and the
circumstances. The leader acts through the quickest way that benefits the employees and the
organization. Hersey-Blanchard situational leadership theory is based on certain behaviours
like the participating style, selling style, delegating style and telling style. The participating
style emphasize on the share of the ideas and it can be correlated with the fact that McKinsey
was assigned to look conduct the survey. Selling style demarcates the explanation of the
decisions that can be profoundly found within the statement issues by McFarlane. Delegating
style can be referred to the decisions that the managers are delegated the authority to carry
out the implementation of the transformational strategies. While the communication style
refers to the set of vocal instructions given to all the employees, managing directors and the
divisional managers to undergo the performance management (Luo and Liu 2014).

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Conclusion:
On a concluding note, it can be mentioned that the change is an absolutely necessary in order
to survive in the present economy and continue to have a sustainable and profitable existence in
the market. However, it also needs to be mentioned that an organizational transformation,
regardless of its magnitude risks the business process management and functional operational
characteristics of the organization as well. Hence, the resistance and noncompliance is more or
less inevitable, and that is the reason why the need for efficient leadership and change
management is escalating at a rapid rate. There are various change management models which
can guide the organizational leaders through a steady and successful process of change
implementation, however, the real challenge lies in the ability to understand the exact need based
on the situation and issues prevalent in the scenario.
It can be clearly deduced from the case study analysed in the assignment that the change
management process and its successful implementation depends solely on the abilities of the
leader to assess the situation and align the need of the hour with the strategies that he or she is
going o implement for overcoming the challenges. Hence, it can be mentioned that is a crisis
situation demanding a full scale organizational transformation requires situational leadership
most essentially for the change management to be effective.

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References:
Anderson, D. and Anderson, L.A., 2010. Beyond change management: How to achieve
breakthrough results through conscious change leadership. John Wiley & Sons.
Dixon, S.E., Meyer, K.E. and Day, M., 2010. Stages of organizational transformation in
transition economies: A dynamic capabilities approach. Journal of Management Studies, 47(3),
pp.416-436.
Doppelt, B., 2017. Leading change toward sustainability: A change-management guide for
business, government and civil society. Routledge.
Edwards, M., 2010. Organizational transformation for sustainability: An integral metatheory.
Routledge.
Giltinane, C.L., 2013. Leadership styles and theories. Nursing standard, 27(41), pp.35-39.
Giltinane, C.L., 2013. Leadership styles and theories. Nursing standard, 27(41), pp.35-39.
Hanafizadeh, P. and Ravasan, A.Z., 2011. A McKinsey 7S model-based framework for ERP
readiness assessment. International Journal of Enterprise Information Systems (IJEIS), 7(4),
pp.23-63.
Hayes, J., 2014. The theory and practice of change management. Palgrave Macmillan.
Infosys.com (2018). [online] Infosys.com. Available at: http://www.infosys.com/finnacle
[Accessed 22 Jan. 2018].
Luo, H. and Liu, S., 2014. Effect of situational leadership and employee readiness match on
organizational citizenship behavior in China. Social Behavior and Personality: an international
journal, 42(10), pp.1725-1732.

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McCleskey, J.A., 2014. Situational, transformational, and transactional leadership and leadership
development. Journal of Business Studies Quarterly, 5(4), p.117.
Raineri, A.B., 2011. Change management practices: Impact on perceived change results. Journal
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