Description
The Role of Strategy, Culture and Leadership in the Nedbank Turnaround The Tom Boardman Story.
1 | P a g e
The Role of Strategy, Culture and Leadership in the
Nedbank Turnaround – The Tom Boardman Story
2 | P a g e
Table of Contents
Executive Summary ....................................................................................................................................... 3
It all Starts with a Vision, driven by Strategy ................................................................................................ 4
Corporate Culture and Values ....................................................................................................................... 5
Transformation ............................................................................................................................................. 6
Leadership ..................................................................................................................................................... 8
Measurement and Tracking .......................................................................................................................... 9
When it’s all Said and Done ........................................................................................................................ 10
Annexure 1: Dagwood 2004 ....................................................................................................................... 11
Annexure 2: Nedbank Staff Survey ............................................................................................................. 12
Annexure 3: Nedbank Transformation – Employment Equity .................................................................... 13
Annexure 4: Entropy Improvement ............................................................................................................ 14
Annexure 5: Improvement in Business Ratios ............................................................................................ 15
3 | P a g e
Executive Summary
When Tom Boardman was announced as the Chief Executive Officer (CEO) of Nedbank in late 2003, the
bank was about to go on to record full year results of Headline Earnings down 98% (to R55m), and a
Return on Equity (ROE) of 0.4%. Nedbank’s Market Capitalisation was the lowest of the ‘Big Four’, and
on a downward trajectory in direct contrast to the competitors’ upward trajectory, at R17bn. Their
parent company Old Mutual plc would have to inject R2bn of secondary capital to keep it afloat, and
R5.2bn primary capital had to be raised through a rights issue. Coupled with the poor financial view,
market sentiment of the appointment of the CEO whose job it was to lead Nedbank out of these
troubled times was negative, and a day after the announcement Nedbank’s share price tumbled 6%. At
the same time, Nedbank was in the midst of the complicated merger with BOE, which involved not only
aligning people, culture, and values, but was becoming more costly the longer it took to implement, and
thus real ‘savings’ were not being immediately realized.
It was immediately clear that a lot of hard work would be required in order to turnaround one of South
Africa’s oldest and traditionally ‘aspirational’ banks. Everything from the way it did business (corporate
strategy and operations), to the way that the employees functioned (corporate culture), to the way it
ensured successful implementation, execution and attainment of goals and objectives (corporate
leadership) had to be reviewed and reinvented.
4 | P a g e
It all Starts with a Vision, driven by Strategy
‘To become Southern Africa’s most highly rated and respected bank … by our staff, clients, shareholders,
regulators and communities.’ ? Tom Boardman, 2004.
The vision of an organization gives it direction. This is
enabled and underpinned by its corporate strategy and
values. In the absence of a vision, an organization has
no direction.
Strategically, Tom realized that there were a number of pressing and immediate issues that had to be
dealt with quickly in order to fully carry out his vision. To address these pressing concerns, Tom
launched the ‘Journey Back to the Top’ initiative, underpinned by a three year planning process. This
was meant to provide focus to these and other key initiatives aimed at the turnaround of Nedbank, and
ensured that each responsible business division, as well as Tom, would be actively tracked and
measured against these items.
At the same time, in 2004, Tom personally led the
Strategy, Values and Brand (SVB) workshops. These
were held for the top senior leadership in Nedbank to
brainstorm the strategic direction, corporate
aspirations, key focus areas, and core values. A number
of these workshops were held to constantly evolve and
improve these aspects. The summaries of the
discussions from every workshop, together with
amendments to the group strategy, values and brand,
were consolidated into one document, which was
presented to, and approved by, the Nedbank Group
Executive Committee. The result was a finalized group
strategy and clear direction for the Nedbank Group
brand campaign and values ? the ‘Dagwood’.
‘If you don’t know where you are
going then any road will take you
there.’ – Cheshire Cat, Alice in
Wonderland
10 Steps for shifting an Organization
1. Develop a vision, mission, strategy
and operating plan
2. Set high expectations with specific
goals and objectives
3. Build trust
4. Define person’s and group’s goals,
responsibilities and job content
5. Agree on measures for people to
track how they are doing
6. Give frequent feedback and relate to
plans
7. Continuously update people on
external situation
8. Recognize and praise success and
progress
9. Reward success and the desired
behaviour
10. Celebrate success together and share
setbacks
5 | P a g e
Global research has shown that highly successful companies often use a single concept that focuses all
the efforts in their organizations. Powerful single concepts are built on three pillars: what the
organization is passionate about, what sets the organization apart from competitors and what drives the
organization’s economic engine. Tom believed that Nedbank could be the best at understanding their
clients’ needs and that they could deliver value propositions that would meet these specific needs
better than any other bank in Southern Africa. He believed that being more client?driven would set
Nedbank apart from the rest and would be a cornerstone in the ‘journey back to the top’.
Furthermore, and in line with the strategy of becoming a more client?driven organization and to remove
the silo mentality from the business, the frontline business model had to be reviewed. As a result, the
existing retail and operations business structures were reviewed and a new business model was
introduced with the aim of unifying the business, which in turn would support a more client?centric
approach. The review was based on feedback received from all Nedbank employees, and by evaluating
best practice in other international markets. This is aligned to the maxim of ‘the wisdom of many is
better than the wisdom of few.’
Corporate Culture and Values
‘The culture of an organization or any group of individuals is a reflection of the values, beliefs and
behaviours of leaders of the group.’ ? Richard Barrett.
The breaking down of silo behaviour within Nedbank was
another one of the key challenges. To encourage unity one
set of values were developed ? values that were shared by
staff in all the clusters and divisions, and that were also in
line with the values of the broader Old Mutual group.
Four values which aligned to the greater Old Mutual group,
and which were adapted for Nedbank, were chosen, as well
as a fifth which was chosen specifically in order to create a
sense of uniqueness and relevance to Nedbank. All staff
was invited for their input in selecting the fifth value as this
represented buy?in into the shifting of the corporate culture
which was a prerequisite for the turnaround. Being People?
‘The excellent companies developed
cultures that incorporated the values
and practices of their great leaders,
and those shared values can be seen
to survive for decades.’ – Tom Peters
‘Organizational transformation
begins with personal transformation
of the leaders. Organizations do not
transform; people do.’ – Richard
Barrett
6 | P a g e
Centered was eventually selected, to go along with
Integrity, Respect, Accountability, and Pushing Beyond
Boundaries. In order to create a ‘High Performing Culture’ it
was critical these values were adopted, accepted and lived
by all employees, and be seen to exist within top leadership.
Another key concept as a result of the SVB workshops was
‘Deep Green’. This idea was about a composite culture,
encompassing the vision, and driven by a depth of
aspirations, values, and focus areas (‘Deep’), built around
the brand imaging of Nedbank (‘Green’). It represented the
feeling that the senior leadership team at the time of the
SVB workshops felt best summarized the Nedbank that they
had planned to see, and would work towards.
To enable Deep Green, the ‘Leading For Deep Green’ (L4DG) programme was constituted. This
encompassed employee and team mastery and effectiveness, while also focusing on community
involvement and staff volunteerism. One of the workstreams that was constituted was a combined
leadership and strategy process. It was a unique process that had been developed for Nedbank by the
Centre for Conscious Leadership (CCL), a team of organisational psychologists. The process was built on
the latest thinking in leadership development. The key aspects of this was to be aware of oneself in
terms of ones personality, leadership style, and on the impact and influence on others, and how
Nedbank could harness the synergy of differences and leverage our insight to build a sustainable future
for Nedbank. To date 162 teams and 1,969 staff members have gone on the programme, and it is
continually being enhanced to ensure an effective working corporate culture and values.
Transformation
Another area where much change occurred and
excelled under the leadership of Tom is that of
Transformation. He saw that Nedbank, as a leading
banking group, had an ‘opportunity to effect and
influence transformation at a number of levels – not
Deep Green’ Aspirations
• Great Place to Work
• Great Place to Bank
• Great Place to Invest
• Unleashing Synergies
• World?class at Managing Risk
• Community of Leaders
• Most Respected and Aspirational
Brand
• Highly Involved in the Community
and Environment
• Leading Transformation
• Living our Values
‘It is our responsibility to break down
barriers of division and create a
country where there will be neither
Whites nor Blacks, just South
Africans, free and united in diversity.’
– Oliver Tambo
7 | P a g e
only internally but also in the markets that we serve, among our corporate clients, in capital formation
projects, and in all out business interactions.’
Transformation is not just a numbers game, where it looks like it’s all about employment equity targets
and black economic empowerment. This checklist mindset can diminish the socio?economic actualities
of what transformation is really about. It’s about human rights, equality, justice, and dignity. It’s about a
belief in an abundant future for all.
The financial sector charter was one of the first movers
in organizing business to setup a governing charter that
would prioritize Black Economic Empowerment (BEE)
within the sector and guide financial services
institutions in its implementation. The Financial Sector
Charter (FSC) was developed by the major players in the
sector and brought into effect in January 2004. It sets
out key strategic measures to promote BEE across the
sector, together with targets for implementation. The
Department of Trade and Industry (DTI) have since
introduced the BEE Codes of Good Practice, which
forms an addendum to the B?BBEE Act and provide a
means of measuring BEE on the broad?based terms
introduced with the Act. This marks a further step to
motivate transformation in the private sector.
In all the measurement areas of Ownership,
Management Control, Corporate Social Investment
(CSI), Enterprise Development, Preferential
Procurement, Skills Development and Employment
Equity there has been a steady increase, and in some
cases surpassing annual targets, since their
introduction.
Nedbank’s Transformation Truths
1. It is the right thing to do.
Transformation is a business
imperative.
2. Transformation affects every single
area of our business.
3. It is the responsibility of every person
to make it happen.
4. Trust and transparency is required.
Everyone should be heard.
5. Transformation at Nedbank must be
unifying, fair and transparent.
6. Transformation will have short?term
cost with long?term benefit.
7. Transformation targets will be
embedded in our strategies and
business plans through on?going
consultation.
8. We will pro?actively grow and
develop our own talent pool.
9. We will focus strongly on the support
and empowerment of blacks, with
particular emphasis on Africans, all
women and all people with
disabilities.
10. Transformation is non?negotiable.
8 | P a g e
This is not only directly related to the leadership of Tom being an example of a positive role model in his
belief of Transformation, but also in his ability to get comprehensive buy?in from all levels of employees
to the merits and spirit of Transformation. Indeed, the success of the transformation of the employee
composition of Nedbank contributes greatly to it being named as the third most empowered company
in South Africa in 2008, and ahead of its other ‘Big 4’ competitors.
Leadership
In his book ‘Let Africa Lead’, Reuel Khoza refers to the Doughnut Leadership model. The highest level of
attainment in this model is that of an organization which is led by a value?based leader. ‘Guiding the 21
st
century business are value?based leaders who depend on experts to shape innovation and create
networks of exchange. The implementers – no longer mere ‘workers’ – are those who share the vision
and carry it into the workplace and the marketplace.’
When Tom took over in late 2003, one of the more
immediate organizational structure tasks was the
reorganization and appointment of a new Executive
Committee. This was coupled with a reorganization of
the Nedbank divisions in order to align it to a synergistic
client?driven business model. It was vital that he chose
leaders that would not only be able to buy into his
vision, but who would also be great leaders in their own
right and be able to galvanize their employees in the
achievement of the turnaround. Tom and his senior
leadership had to be values?based and had to lead by
example.
One of the key elements of Tom’s first ‘Five Point Plan’
was that of improving transparency. This was not only
related to transparency with regards to accounting
policies and reporting, which was also important, but
more so with regards to employee communications,
specifically to the early days of the ‘Journey to the Top’.
The Seven Keys to Business
1. Trust your Subordinates: You can’t
expect them to go all out for you if
you don’t trust them.
2. Develop a Vision: Contrary to some
executive’s suspicions, planning for
the long term pays off. People want
to follow someone who know where
he or she is going
3. Keep your Cool: The best leaders
show their mettle under fire
4. Encourage Risk: Nothing demoralizes
the troops like knowing that the
slightest failure could jeopardize their
entire career
5. Be an Expert: From boardroom to
mail room, everyone had better
understand that you know what you
are talking about
6. Invite Dissent: Your people aren’t
giving you their best or learning how
to lead if they are afraid to speak up
7. Simplify: You need to see the big
picture in order to set a course,
communicate it, and maintain it.
Keep the details at bay
9 | P a g e
A variety of mediums were utilized to ensure that all
levels of employees were kept informed of strategic
decisions being made which would undoubtedly affect
morale and confidence. A key of this was the ‘Talk to
Tom’ concept, a vehicle for employees to share with
Tom their concerns, fears and suggestions. This ensured
that he was in?touch with what all of the employees
were feeling and thinking, but also more importantly, it
opened the doors for employees to him and made him
more accessible and the relationship more personal. All
great leaders are great communicators.
Measurement and Tracking
‘A strong culture is said to exist where staff respond to stimulus because of their alignment to
organizational values. In such environments, strong cultures help firms operate like well?oiled machines,
cruising along with outstanding execution and perhaps minor tweaking of existing procedures here and
there.’ ? Dean McFarlin.
It has been said that ‘what cannot be measured, does not count’. This is also applicable in the areas of
cultural change, transformation, and staff morale. These dimensions in particular were carefully
monitored and tracked on a monthly and annual basis by Nedbank. All of these dimensions have shown
marked improvement, year on year.
In order to track alignment of employee’s personal
values versus current organizational culture values
versus desired organizational culture values, Tom
enlisted the help of Richard Barrett. In his annual
Barrett Surveys, which have seen the number of
respondents in 2005 increase from 1,827 (or 20% of
employees) to 18,206 (or 63% of employees) in 2009,
the number of matches of culture dimensions increased
(between current culture to desired culture) steadily
‘If you are losing good people, look to
their immediate manager. Immediate
manager is the reason people stay
and thrive in an organization. And
the reason why people leave. When
people leave they take knowledge,
experience and contacts with them,
straight to the competition. People
leave managers not companies.’ –
Marcus Buckingham
Five Keys to Effective Leadership
1. A Leader Plans
2. A Leader has a Vision
3. A Leader Shares His or Her Vision
4. A Leader Takes Charge
5. A Leader Inspires Through Example
10 | P a g e
over the years, from 3 matches to 6 (out of the top 10 dimensions selected). This was indicative of an
organizational culture shift in a positive direction, aligning what employees wanted to see from the
organizations culture, to what it actually experienced of the organization.
Another important element of the Barrett Survey is that of the measurement of Entropy, which is a
measurement of the degree of dysfunctionality within an organization’s culture. A less than 10% value is
a healthy functioning organization. The best employers have the lowest entropy, and the employers
with the lowest entropy also have the highest financial returns (Hewitt Associates & Barrett Values
Centre, 2008). In 2005 this value stood at 25%, which meant that there were significant problems
requiring attention. In 2009 the value almost halved to 13%, which is indicative of an improvement in
staff morale, and working towards the less than 10% value would result in healthy functioning of the
organization.
The Nedbank Staff Survey (NSS) was another annual survey used to measure the staff morale of the
organization. There are 12 dimensions measured, with an ‘Overall’ value also tracked which is a
composite of all the dimensions. All of the dimensions showed major improvement since 2005, some as
high as 38.7%, and overall the score improved by 26%. Staff morale had indeed turned for the better.
When it’s all Said and Done
Tom Boardman’s time at Nedbank can be described as
one where success has been achieved in the face of
extreme adversity. This adversity included negative
market sentiment, low staff morale, a dysfunctional
organizational culture, no clearly articulated vision and
strategy, and a low confidence level in the senior
leadership of Nedbank.
The effective turnaround of Nedbank happened as Tom had promised: at the end of the first cycle of the
three year planning process. The ‘hard’ target measures of 20% ROE and 55% Cost?to?Income ratio were
delivered and celebrated. But all of this would not have been possible without strong leadership, a
determination and conviction to change the culture and values, and more importantly, to win the
support and belief of not only the outside investor community, but of all employees.
‘There is no miracle moment.
Incremental wins in a common
direction will restore Nedbank to a
highly rated & respected financial
institution’ –Tom Boardman, 2004
11 | P a g e
Annexure 1: Dagwood 2004
Most respected and
aspirational brand
Scope of the
game
Back to basics Full spectrum banking Southern Africa focus
Maki ng sure
i t happens
Strategic Recovery & Turnaround Office
Our val ues
Integrity Respect Accountability
Pushing beyond
boundaries
People-centred
Great at
l i steni ng, understa
ndi ng cl i ents’
needs and
del i veri ng
What makes us
di fferent &
di ctates our
busi ness
model ?
Build a high
performance culture
Optimise mix
(group, segment and
product)
Beyond
transformation
(FSC, community, environ
ment and brand)
Align the organisation
to a synergistic client-
driven business
model
Vi si on
To become Southern Africa’s most highly rated and respected bank…
…by our staff, clients, shareholders, regulators and communities.
DEEP GREEN
=
Great place to work
Deep Green
aspi rati ons
Unleashing synergies Community of leaders
Highly involved in the
community and environment
Leading transformation Living our values
Strategi c
focus
Drive transactional
banking (client
acquisition &
retention, primary
banker, cross sell, volume)
Great place to bank Great place to invest
World-class at managing risk
12 | P a g e
Annexure 2: Nedbank Staff Survey
13 | P a g e
Annexure 3: Nedbank Transformation – Employment Equity
The increasing representitvity of Black employees at Nedbank.
11%
18%
32%
24%
14%
25%
36%
29%
19%
31%
42%
34%
22%
36%
49%
40%
29%
49%
74%
62%
Senior
Management
Middle
Management
Junior
Management
Total
Management
2004 2005 2006 2007 2008
22.4%
41.0%
70.8%
2008 Targets
14 | P a g e
Annexure 4: Entropy Improvement
Entropy Risk Bands
The Role of Strategy, Culture and Leadership in the Nedbank Turnaround The Tom Boardman Story.
1 | P a g e
The Role of Strategy, Culture and Leadership in the
Nedbank Turnaround – The Tom Boardman Story
2 | P a g e
Table of Contents
Executive Summary ....................................................................................................................................... 3
It all Starts with a Vision, driven by Strategy ................................................................................................ 4
Corporate Culture and Values ....................................................................................................................... 5
Transformation ............................................................................................................................................. 6
Leadership ..................................................................................................................................................... 8
Measurement and Tracking .......................................................................................................................... 9
When it’s all Said and Done ........................................................................................................................ 10
Annexure 1: Dagwood 2004 ....................................................................................................................... 11
Annexure 2: Nedbank Staff Survey ............................................................................................................. 12
Annexure 3: Nedbank Transformation – Employment Equity .................................................................... 13
Annexure 4: Entropy Improvement ............................................................................................................ 14
Annexure 5: Improvement in Business Ratios ............................................................................................ 15
3 | P a g e
Executive Summary
When Tom Boardman was announced as the Chief Executive Officer (CEO) of Nedbank in late 2003, the
bank was about to go on to record full year results of Headline Earnings down 98% (to R55m), and a
Return on Equity (ROE) of 0.4%. Nedbank’s Market Capitalisation was the lowest of the ‘Big Four’, and
on a downward trajectory in direct contrast to the competitors’ upward trajectory, at R17bn. Their
parent company Old Mutual plc would have to inject R2bn of secondary capital to keep it afloat, and
R5.2bn primary capital had to be raised through a rights issue. Coupled with the poor financial view,
market sentiment of the appointment of the CEO whose job it was to lead Nedbank out of these
troubled times was negative, and a day after the announcement Nedbank’s share price tumbled 6%. At
the same time, Nedbank was in the midst of the complicated merger with BOE, which involved not only
aligning people, culture, and values, but was becoming more costly the longer it took to implement, and
thus real ‘savings’ were not being immediately realized.
It was immediately clear that a lot of hard work would be required in order to turnaround one of South
Africa’s oldest and traditionally ‘aspirational’ banks. Everything from the way it did business (corporate
strategy and operations), to the way that the employees functioned (corporate culture), to the way it
ensured successful implementation, execution and attainment of goals and objectives (corporate
leadership) had to be reviewed and reinvented.
4 | P a g e
It all Starts with a Vision, driven by Strategy
‘To become Southern Africa’s most highly rated and respected bank … by our staff, clients, shareholders,
regulators and communities.’ ? Tom Boardman, 2004.
The vision of an organization gives it direction. This is
enabled and underpinned by its corporate strategy and
values. In the absence of a vision, an organization has
no direction.
Strategically, Tom realized that there were a number of pressing and immediate issues that had to be
dealt with quickly in order to fully carry out his vision. To address these pressing concerns, Tom
launched the ‘Journey Back to the Top’ initiative, underpinned by a three year planning process. This
was meant to provide focus to these and other key initiatives aimed at the turnaround of Nedbank, and
ensured that each responsible business division, as well as Tom, would be actively tracked and
measured against these items.
At the same time, in 2004, Tom personally led the
Strategy, Values and Brand (SVB) workshops. These
were held for the top senior leadership in Nedbank to
brainstorm the strategic direction, corporate
aspirations, key focus areas, and core values. A number
of these workshops were held to constantly evolve and
improve these aspects. The summaries of the
discussions from every workshop, together with
amendments to the group strategy, values and brand,
were consolidated into one document, which was
presented to, and approved by, the Nedbank Group
Executive Committee. The result was a finalized group
strategy and clear direction for the Nedbank Group
brand campaign and values ? the ‘Dagwood’.
‘If you don’t know where you are
going then any road will take you
there.’ – Cheshire Cat, Alice in
Wonderland
10 Steps for shifting an Organization
1. Develop a vision, mission, strategy
and operating plan
2. Set high expectations with specific
goals and objectives
3. Build trust
4. Define person’s and group’s goals,
responsibilities and job content
5. Agree on measures for people to
track how they are doing
6. Give frequent feedback and relate to
plans
7. Continuously update people on
external situation
8. Recognize and praise success and
progress
9. Reward success and the desired
behaviour
10. Celebrate success together and share
setbacks
5 | P a g e
Global research has shown that highly successful companies often use a single concept that focuses all
the efforts in their organizations. Powerful single concepts are built on three pillars: what the
organization is passionate about, what sets the organization apart from competitors and what drives the
organization’s economic engine. Tom believed that Nedbank could be the best at understanding their
clients’ needs and that they could deliver value propositions that would meet these specific needs
better than any other bank in Southern Africa. He believed that being more client?driven would set
Nedbank apart from the rest and would be a cornerstone in the ‘journey back to the top’.
Furthermore, and in line with the strategy of becoming a more client?driven organization and to remove
the silo mentality from the business, the frontline business model had to be reviewed. As a result, the
existing retail and operations business structures were reviewed and a new business model was
introduced with the aim of unifying the business, which in turn would support a more client?centric
approach. The review was based on feedback received from all Nedbank employees, and by evaluating
best practice in other international markets. This is aligned to the maxim of ‘the wisdom of many is
better than the wisdom of few.’
Corporate Culture and Values
‘The culture of an organization or any group of individuals is a reflection of the values, beliefs and
behaviours of leaders of the group.’ ? Richard Barrett.
The breaking down of silo behaviour within Nedbank was
another one of the key challenges. To encourage unity one
set of values were developed ? values that were shared by
staff in all the clusters and divisions, and that were also in
line with the values of the broader Old Mutual group.
Four values which aligned to the greater Old Mutual group,
and which were adapted for Nedbank, were chosen, as well
as a fifth which was chosen specifically in order to create a
sense of uniqueness and relevance to Nedbank. All staff
was invited for their input in selecting the fifth value as this
represented buy?in into the shifting of the corporate culture
which was a prerequisite for the turnaround. Being People?
‘The excellent companies developed
cultures that incorporated the values
and practices of their great leaders,
and those shared values can be seen
to survive for decades.’ – Tom Peters
‘Organizational transformation
begins with personal transformation
of the leaders. Organizations do not
transform; people do.’ – Richard
Barrett
6 | P a g e
Centered was eventually selected, to go along with
Integrity, Respect, Accountability, and Pushing Beyond
Boundaries. In order to create a ‘High Performing Culture’ it
was critical these values were adopted, accepted and lived
by all employees, and be seen to exist within top leadership.
Another key concept as a result of the SVB workshops was
‘Deep Green’. This idea was about a composite culture,
encompassing the vision, and driven by a depth of
aspirations, values, and focus areas (‘Deep’), built around
the brand imaging of Nedbank (‘Green’). It represented the
feeling that the senior leadership team at the time of the
SVB workshops felt best summarized the Nedbank that they
had planned to see, and would work towards.
To enable Deep Green, the ‘Leading For Deep Green’ (L4DG) programme was constituted. This
encompassed employee and team mastery and effectiveness, while also focusing on community
involvement and staff volunteerism. One of the workstreams that was constituted was a combined
leadership and strategy process. It was a unique process that had been developed for Nedbank by the
Centre for Conscious Leadership (CCL), a team of organisational psychologists. The process was built on
the latest thinking in leadership development. The key aspects of this was to be aware of oneself in
terms of ones personality, leadership style, and on the impact and influence on others, and how
Nedbank could harness the synergy of differences and leverage our insight to build a sustainable future
for Nedbank. To date 162 teams and 1,969 staff members have gone on the programme, and it is
continually being enhanced to ensure an effective working corporate culture and values.
Transformation
Another area where much change occurred and
excelled under the leadership of Tom is that of
Transformation. He saw that Nedbank, as a leading
banking group, had an ‘opportunity to effect and
influence transformation at a number of levels – not
Deep Green’ Aspirations
• Great Place to Work
• Great Place to Bank
• Great Place to Invest
• Unleashing Synergies
• World?class at Managing Risk
• Community of Leaders
• Most Respected and Aspirational
Brand
• Highly Involved in the Community
and Environment
• Leading Transformation
• Living our Values
‘It is our responsibility to break down
barriers of division and create a
country where there will be neither
Whites nor Blacks, just South
Africans, free and united in diversity.’
– Oliver Tambo
7 | P a g e
only internally but also in the markets that we serve, among our corporate clients, in capital formation
projects, and in all out business interactions.’
Transformation is not just a numbers game, where it looks like it’s all about employment equity targets
and black economic empowerment. This checklist mindset can diminish the socio?economic actualities
of what transformation is really about. It’s about human rights, equality, justice, and dignity. It’s about a
belief in an abundant future for all.
The financial sector charter was one of the first movers
in organizing business to setup a governing charter that
would prioritize Black Economic Empowerment (BEE)
within the sector and guide financial services
institutions in its implementation. The Financial Sector
Charter (FSC) was developed by the major players in the
sector and brought into effect in January 2004. It sets
out key strategic measures to promote BEE across the
sector, together with targets for implementation. The
Department of Trade and Industry (DTI) have since
introduced the BEE Codes of Good Practice, which
forms an addendum to the B?BBEE Act and provide a
means of measuring BEE on the broad?based terms
introduced with the Act. This marks a further step to
motivate transformation in the private sector.
In all the measurement areas of Ownership,
Management Control, Corporate Social Investment
(CSI), Enterprise Development, Preferential
Procurement, Skills Development and Employment
Equity there has been a steady increase, and in some
cases surpassing annual targets, since their
introduction.
Nedbank’s Transformation Truths
1. It is the right thing to do.
Transformation is a business
imperative.
2. Transformation affects every single
area of our business.
3. It is the responsibility of every person
to make it happen.
4. Trust and transparency is required.
Everyone should be heard.
5. Transformation at Nedbank must be
unifying, fair and transparent.
6. Transformation will have short?term
cost with long?term benefit.
7. Transformation targets will be
embedded in our strategies and
business plans through on?going
consultation.
8. We will pro?actively grow and
develop our own talent pool.
9. We will focus strongly on the support
and empowerment of blacks, with
particular emphasis on Africans, all
women and all people with
disabilities.
10. Transformation is non?negotiable.
8 | P a g e
This is not only directly related to the leadership of Tom being an example of a positive role model in his
belief of Transformation, but also in his ability to get comprehensive buy?in from all levels of employees
to the merits and spirit of Transformation. Indeed, the success of the transformation of the employee
composition of Nedbank contributes greatly to it being named as the third most empowered company
in South Africa in 2008, and ahead of its other ‘Big 4’ competitors.
Leadership
In his book ‘Let Africa Lead’, Reuel Khoza refers to the Doughnut Leadership model. The highest level of
attainment in this model is that of an organization which is led by a value?based leader. ‘Guiding the 21
st
century business are value?based leaders who depend on experts to shape innovation and create
networks of exchange. The implementers – no longer mere ‘workers’ – are those who share the vision
and carry it into the workplace and the marketplace.’
When Tom took over in late 2003, one of the more
immediate organizational structure tasks was the
reorganization and appointment of a new Executive
Committee. This was coupled with a reorganization of
the Nedbank divisions in order to align it to a synergistic
client?driven business model. It was vital that he chose
leaders that would not only be able to buy into his
vision, but who would also be great leaders in their own
right and be able to galvanize their employees in the
achievement of the turnaround. Tom and his senior
leadership had to be values?based and had to lead by
example.
One of the key elements of Tom’s first ‘Five Point Plan’
was that of improving transparency. This was not only
related to transparency with regards to accounting
policies and reporting, which was also important, but
more so with regards to employee communications,
specifically to the early days of the ‘Journey to the Top’.
The Seven Keys to Business
1. Trust your Subordinates: You can’t
expect them to go all out for you if
you don’t trust them.
2. Develop a Vision: Contrary to some
executive’s suspicions, planning for
the long term pays off. People want
to follow someone who know where
he or she is going
3. Keep your Cool: The best leaders
show their mettle under fire
4. Encourage Risk: Nothing demoralizes
the troops like knowing that the
slightest failure could jeopardize their
entire career
5. Be an Expert: From boardroom to
mail room, everyone had better
understand that you know what you
are talking about
6. Invite Dissent: Your people aren’t
giving you their best or learning how
to lead if they are afraid to speak up
7. Simplify: You need to see the big
picture in order to set a course,
communicate it, and maintain it.
Keep the details at bay
9 | P a g e
A variety of mediums were utilized to ensure that all
levels of employees were kept informed of strategic
decisions being made which would undoubtedly affect
morale and confidence. A key of this was the ‘Talk to
Tom’ concept, a vehicle for employees to share with
Tom their concerns, fears and suggestions. This ensured
that he was in?touch with what all of the employees
were feeling and thinking, but also more importantly, it
opened the doors for employees to him and made him
more accessible and the relationship more personal. All
great leaders are great communicators.
Measurement and Tracking
‘A strong culture is said to exist where staff respond to stimulus because of their alignment to
organizational values. In such environments, strong cultures help firms operate like well?oiled machines,
cruising along with outstanding execution and perhaps minor tweaking of existing procedures here and
there.’ ? Dean McFarlin.
It has been said that ‘what cannot be measured, does not count’. This is also applicable in the areas of
cultural change, transformation, and staff morale. These dimensions in particular were carefully
monitored and tracked on a monthly and annual basis by Nedbank. All of these dimensions have shown
marked improvement, year on year.
In order to track alignment of employee’s personal
values versus current organizational culture values
versus desired organizational culture values, Tom
enlisted the help of Richard Barrett. In his annual
Barrett Surveys, which have seen the number of
respondents in 2005 increase from 1,827 (or 20% of
employees) to 18,206 (or 63% of employees) in 2009,
the number of matches of culture dimensions increased
(between current culture to desired culture) steadily
‘If you are losing good people, look to
their immediate manager. Immediate
manager is the reason people stay
and thrive in an organization. And
the reason why people leave. When
people leave they take knowledge,
experience and contacts with them,
straight to the competition. People
leave managers not companies.’ –
Marcus Buckingham
Five Keys to Effective Leadership
1. A Leader Plans
2. A Leader has a Vision
3. A Leader Shares His or Her Vision
4. A Leader Takes Charge
5. A Leader Inspires Through Example
10 | P a g e
over the years, from 3 matches to 6 (out of the top 10 dimensions selected). This was indicative of an
organizational culture shift in a positive direction, aligning what employees wanted to see from the
organizations culture, to what it actually experienced of the organization.
Another important element of the Barrett Survey is that of the measurement of Entropy, which is a
measurement of the degree of dysfunctionality within an organization’s culture. A less than 10% value is
a healthy functioning organization. The best employers have the lowest entropy, and the employers
with the lowest entropy also have the highest financial returns (Hewitt Associates & Barrett Values
Centre, 2008). In 2005 this value stood at 25%, which meant that there were significant problems
requiring attention. In 2009 the value almost halved to 13%, which is indicative of an improvement in
staff morale, and working towards the less than 10% value would result in healthy functioning of the
organization.
The Nedbank Staff Survey (NSS) was another annual survey used to measure the staff morale of the
organization. There are 12 dimensions measured, with an ‘Overall’ value also tracked which is a
composite of all the dimensions. All of the dimensions showed major improvement since 2005, some as
high as 38.7%, and overall the score improved by 26%. Staff morale had indeed turned for the better.
When it’s all Said and Done
Tom Boardman’s time at Nedbank can be described as
one where success has been achieved in the face of
extreme adversity. This adversity included negative
market sentiment, low staff morale, a dysfunctional
organizational culture, no clearly articulated vision and
strategy, and a low confidence level in the senior
leadership of Nedbank.
The effective turnaround of Nedbank happened as Tom had promised: at the end of the first cycle of the
three year planning process. The ‘hard’ target measures of 20% ROE and 55% Cost?to?Income ratio were
delivered and celebrated. But all of this would not have been possible without strong leadership, a
determination and conviction to change the culture and values, and more importantly, to win the
support and belief of not only the outside investor community, but of all employees.
‘There is no miracle moment.
Incremental wins in a common
direction will restore Nedbank to a
highly rated & respected financial
institution’ –Tom Boardman, 2004
11 | P a g e
Annexure 1: Dagwood 2004
Most respected and
aspirational brand
Scope of the
game
Back to basics Full spectrum banking Southern Africa focus
Maki ng sure
i t happens
Strategic Recovery & Turnaround Office
Our val ues
Integrity Respect Accountability
Pushing beyond
boundaries
People-centred
Great at
l i steni ng, understa
ndi ng cl i ents’
needs and
del i veri ng
What makes us
di fferent &
di ctates our
busi ness
model ?
Build a high
performance culture
Optimise mix
(group, segment and
product)
Beyond
transformation
(FSC, community, environ
ment and brand)
Align the organisation
to a synergistic client-
driven business
model
Vi si on
To become Southern Africa’s most highly rated and respected bank…
…by our staff, clients, shareholders, regulators and communities.
DEEP GREEN
=
Great place to work
Deep Green
aspi rati ons
Unleashing synergies Community of leaders
Highly involved in the
community and environment
Leading transformation Living our values
Strategi c
focus
Drive transactional
banking (client
acquisition &
retention, primary
banker, cross sell, volume)
Great place to bank Great place to invest
World-class at managing risk
12 | P a g e
Annexure 2: Nedbank Staff Survey
13 | P a g e
Annexure 3: Nedbank Transformation – Employment Equity
The increasing representitvity of Black employees at Nedbank.
11%
18%
32%
24%
14%
25%
36%
29%
19%
31%
42%
34%
22%
36%
49%
40%
29%
49%
74%
62%
Senior
Management
Middle
Management
Junior
Management
Total
Management
2004 2005 2006 2007 2008
22.4%
41.0%
70.8%
2008 Targets
14 | P a g e
Annexure 4: Entropy Improvement
Entropy Risk Bands