Our best practice contains two ideas: 1) The transformation of the company culture and values towards a culture of Performance, Empowerment, Accountability, Responsiveness and Local Embeddedness (PEARL) - 2) Our company culture transformation is not imposed top-down, but realised by the employees themselves through viral change. Storytelling and appreciative inquiry are main ingredients.
KBC Group is an integrated bancassurance group, catering mainly for retail, SME and midcap customers. It concentrates on its home markets in Belgium and in certain countries of Central and Eastern Europe (daughters in Hungary, Slovakia, Czech Republic and Bulgaria). Elsewhere around the globe, the Group has established a presence in selected countries and regions (Ireland, USA, United Kingdom, the Netherlands, France, Asia Pacific).
The KBC group was created on 2 March 2005 through the merger of the KBC Bank and Insurance Holding Company and its parent company, Almanij. In 1998 KBC was born as a result of the merge between two banks (KB and CERA) and an Insurer (ABB)
Head Office of KBC is located in Brussels (Belgium). Within Belgium the bancassurer has around 13 000 employees, group-wide it counts with 35 000 employees.
Similar to most banks, KBC has severely suffered from the crisis on the financial markets during the past years and had to be rescued twice by the government. Currently, although the markets remain challenging, KBC is recovering from the crisis and has made a major refund of its debt to the Belgian governments.
Looking at the competitive landscape and bancassurance, we see that the Belgian market is very mature and saturated. However, being the only bancassurer that is still independent and controlled by Belgian shareholders, KBC counts with an important competitive advantage.
Cfr. the movie 'Building the future together with PEARL: Watch the movie This movie was an initiative of employees to explain why PEARL is necessary for our future and was created through crowdsourcing. The scenario of the movie can be found under 'Materials'. KBC was created 15 years ago and at that moment, the perspectives were very positive. We started acquisitions abroad and we were growing fast. Our customers and income increased and we expanded: more people, more structures and rules to keep linking everything together. Although KBC had a cumbersome structure, it did not suffer from it for a long time as economy was growing.
However, as from 2008, KBC was severely impacted by the bank crisis. Our employees lost pride and faith in their employer. Furthermore, we embedded even more risk control in our organization. KBC slowly became a company with a very hierarchical structure, very slow decision processes with little transparency, a lot of committees and other decions-making bodies, lack of out-of-the-box thinking, no more guts to innovate and mainly demotivated employees without empowerment nor accountability.
Moreover, volatile and demanding market were forcing KBC to be flexible and quick to respond on the one hand, and reliable and stable on the other hand. In order to deal with these market challenges now and in the future, KBC Belgium has formulated an ambitious mission, vision and strategy. Taking into account the internal way of workings (as described above) and the organisation culture, it was clear that we would not be able to realise our ambitions and face future challenges without a major culture shift.
It was time to start changing, to turn the tide!
A first experiment for change was made through the ‘Slim program’ in 2012 (apart from its English meaning, “slim” translates to ‘smart’ in our mother tongue, Dutch). This was a program within one Business Unit of KBC to change culture through employee engagement. The idea of this Slim program came from the CEO of that Business Unit (currently CEO of KBC) and was agreed upon by the Management Committee, but each business domain and its employees were in the lead for the implementation of the the Slim program. This is important to mention, as they gave the initiative to the employees.
The major successes were an innovation competition which aimed at developing innovative ideas that could enable KBC to become more Slim or make the difference in the market, Black Holes approach (activities that require a lot of effort without much added value) to make us more agile and learning projects (geared towards a realization of projects within six months, usually disregarding all structures and decision levels). Projects were sponsored in such a way that project members were empowered to realize their targets.
Our most successful learning project was BAMBOO, i.e. the prototyping of a very modern branch office, which was realized within 6 months by two employees through co-creation and crowdsourcing. The picture below shows one of the ways of crowdsourcing used for BAMBOO: a lot of shelves were placed in the hall of our main building and employees were invited to leave their ideas on the future and on the 'ideal' branch office. The first real branch-office, based on this prototype, recently opened, and a creative BAMBOO-competition between branches of different regions is currently ongoing. The winners will be rewarded with the next new modern branch office.
The most important part of this change program was a set-up with a totally different governance than before. It was focused on letting people come up with the necessary change initiatives and not management (or certainly not only). A strong believe is that organization/people change when they have insight why they need to change. A lot of actions were focused on delivering insight and inspiration.
In October 2012 KBC launched the PEARL Strategy. This is the corporate change program for the entire KBC Group which combines the best of different change approaches of the past (e.g. Slim, Lean). PEARL stands for
- Local Embeddedness
The main triggers to introduce this PEARL strategy were the same as for the Slim program (the first experiment for culture change, see above).
PEARL as 'business principle' was introduced by the Group Executive Committee, but it was clearly said from the start that it was up to all employees at all levels to make it come alive. Within some business domains employees spontaneously felt empowered to take initiative to implement and organise PEARL, within other business domains people were asked to work on PEARL within the own domain. Community-working was also heavily relied on by these employees. As PEARL has to be realised by all of us, it was decided that no big supporting structures would be put in place. Therefore, the corporate PEARL team consists of only four employees and their task is mainly to communicate, to sensitize and to give support to the different stakeholders. The initial communication about PEARL to all employees was done through information sessions given by the Members of the Executive Committee, but afterwards management and employees started with the implementation. Some further initiatives to inform and motivate employees were taken by the Corporate PEARL team. An example here were the PEARL Inspiration Rooms, ie. black boxes in the hall of our main buildings with cartoons, one-liners, movies and space for own impressions.
On the basis of the past, the different 'action fields' for culture change were quite clear. As mentioned before, we wanted to get rid of slow decision-processes, hierarchical structures and non-empowered (and therefore often demotivated) employees. As we wish to become the Reference in the market, we have to make sure our organisation is fit for that and we have to use all skills of our employees to face future challenges and realise our objective of becoming the Reference. Taking into account the voice of the employees and the new visions on leadership and motivation, it was clear that we had to move to a culture where employees can freely come up with ideas and experiment with them, that our managers/leaders should coach their team more towards self-steering, initiative, innovation, participation and dare to take decisions.
Below, you can find some major changes so far. We only mention changes that are relevant with a view to Leaders Everywhere.
1. Faster decision-processes, decisions taken at the lowest level possible (accountability) and transparency by a new corporate governance model.
- The Management Committees merely decide upon strategic priorities. All tactical decisions are now taken in a Business Development Committee (per business/segment), headed by a member of the Management Committee. Operational decisions are taken at an even lower level.
- The project structures were reduced to less than 60%: a framework of non-negotiables helps the project leader and team to advance and decide. Per project there is only one Project Committee and the link to other domains is safeguarded through multidisciplinary teams, reporting and other formalities are reduced to a strict minimum
- Some ideas that are now under construction:
- Shadow Management Meeting: all issues raised at management meetings are submitted at the same time to a shadow management meeting. This is a rotating group of volunteering employees who prepare and discuss the same topics as management and submit their consclusions and decisions to the management meeting. This is a way of learning about the view of employees on certain issues, of getting new ideas and to involve staff members more in the strategic and policy processes. Both for employees and management it is a great initiative to learn and understand each other.
- Bootcamps: when employees have a good idea with a possibly major impact, they can set up a bootcamp. This means that they intensively work offsite on the issue/idea with a group of volunteers. These bootcamps are a kind of spin-off and participants do not have to take into account current structures and organisational matters, but they have a tight deadline to submit either a solution or a fully elaborated idea. That way, employees do no longer fully depend on the hierarchy, but get freedom to develop own ideas.
- Culture change realized by the employees (viral change). One of the pillars of PEARL is Empowerment. Therefore, only a small group of 4 employees is fully dedicated to the implementation of the cultural transformation, but all employees were invited to support this change in one way or another. There are two main groups of employees for this:
- pEarly Adopters: this is a group of around 50 persons who were almost immediately enthusiastic for PEARL. These employees are highly involved and have a clear drive to change. They are eager to learn and in general they have a broad network. They dedicate some of their time to the implementation of PEARL within their own businesses . Initiatives are very diverse ranging from behavioural charters to employees designing and implementing the strategy for the own business domain.
- PEARL Ambassadors: Mid April we launched a campaign to assemble PEARL Ambassadors within KBC Belgium. These employees believe in the PEARL culture, are willing to show example behavior and if they wish, they take actions within their own team. Over 600 colleagues have registered so far and this number still grows each day, which we consider a huge success. More and more these Ambassadors contact the pEarly Adopters and the Corporate PEARL team for support in initiatives they wish to take, since a couple of months we really feel a positive vibe of employees willing to contribute to PEARL.
- Due to this approach of viral change, traditional ways of working (project management, steering committees, formal meetings, SLA, …) are replaced by new and more dynamic ways of collaboration, based on enthusiasm, creativity and enterpreneurship.
- To support employees who want to take PEARL action, a set of hands-on recipes on different topics was published. These recipes are a description of a wide range of tools (e.g. Daily huddles), but described in such a way that they can be quickly understood by all employees. They are distributed in three categories (Pearl and I, Pearl and my team, Pearl and my business). The recipes were initially written by different colleagues, mainly from the Organisation Department and the Management Development Center. At this moment, we regularly add recipes on the basis of best-practices, provided by Ambassadors and/or pEarly Adopters. An example can be found under 'Materials'.
- Management innovation around core people and leadership practices
In conjunction with all other PEARL initiatives within HR we are now focused on reinventing some of the core management practices that are real barriers when it comes to an engaged, accountable, responsive culture. Some clear examples are
- Leadership Development: A new leadership model is currently being introduced. Focus of the new leadership model is on authentic leadership, coaching and empowering your employees, honest feedback, talent management, continuous improvement and role-modeling and performance management. Interactivity and cross-functional solidarity are also stressed in the new model. Whereas in the past, the leadership model was based on competences, the new model is focused on mindset and behavior (as behaviors will drive the expected culture). A first measurement of the leadership behavior will be done from October onwards. This will be done through a 360° feedback for all managers at all levels. For the first time, the view of the employees on their manager will be taken into account. Different ways of support (intervision, workshops, peer coaching, …) are planned for the managers. It is difficult to further elaborate on this here, as the information sessions for managers only take place in September. The model contains three important building blocks:
- Lead yourself: this is about vulnerability, resilience, consistency, autheticity and flexibility, passion and loyalty and self-development
- Lead your people contains behavior such as honest feedback, empowerment, valuing team, empathy, inspire and motivate, facilitate and focus on talents
- Lead your business focuses on the 'harder' aspects, such as vision, targets, continuous improvement and customers.
- With a view to future recruitment and development of all employees, our competence model will be adapted to the needs of the new culture. Whereas in the past a lot of focus was put on knowledge (diplom) and analytical competences, there will be a shift towards competences such as initiative-taking, innovation and vision.
- The performance appraisals (currently based on job levels and competences and targets) are being adapted. There is more focus on performance management and on the self-steering of employees.
- Working from home has been introduced in 2013.
The project HR2B is a project on the future challenges of HR and possible answers. This is a project proposed and implemented by employees: after a first literature study of the market trends which lead to define the major challenges, all employees were invited to give their input. This crowd-sourcing was organised through pitstops (info sessions), walls with trends and room for input in the entrance halls and World Cafés. Main challenges will be
- Flexibility of work (no more standard jobs, no more standard hours),
- Use of talents and passion of the employees
- Give Employees more freedom to choose and craft their own jobs,
- Turn the managers into leaders by letting go of control
- Corporate Social Responsibility,
- More customer focus at Head Office,
- Hire talents that are fit for our culture (culture-gap)
- Communication: Viral change, storytelling and appreciative inquiry are main components of PEARL. To realize this, a lot of emphasis is to be put on communication:
- KBC Connect: a new communication channel since February 2013 that keeps employees informed of results, press releases, awards and best-practices within KBC. Employees are invited to publish their success stories.
- Communities: a lot of importance is given to Community-working as a new way of collaboration and co-creation. A good example is the i-Funnel Community, which is a group of employees from all over KBC that want to make innovation sustainable within the company through a lean process, good support and coaching. The community idea makes sure that projects and ideas are enriched in a multidisciplinary way instead of working in silos.
We also take care of Inspiration Moments:
- We have defined eight Pearls (i.e. behavioral anchors) for the employees. These eight Pearls can be considered as concrete handles for starting with Pearl: Go for results - Put the customer central - Dare to decide - Show respect - Show passion - Keep it simple - Take initiative - Know yourself and adapt. Around these Pearls we organize theme months: every month we set focus on one Pearl and inspire employees through a mix of channels . A fixed component are the Pearl pitstops: inspiration sessions with as topic the pearl of the month. Some examples of other initiatives: a No-compaints Wall, a No e-Mail Day, a table in the restaurant called Silo Stop (where employees can get acquainted to each other).
- Moodrooms: at the end of last year we inspired employees about the letters of PEARL through moodrooms located in the different buildings of Head Office. These moodrooms contained movies from management, quotes of famous people, cartoons and a place where employees could leave their impressions.
- Parallel to the moodrooms, we organized a Moodboard competition. The aim was that teams made a moodboard together in order to start discussing about PEARL in an open way. No rules, any expression of creativity was welcome.
- KBC2015: The community of young KBC employees took the initiative to organize several evenings on different locations on the future challenges and initiatives of KBC (e.g. HR in the future, the future customer, …). Over 1200 employees attended.
Conclusion: we organize a lot of different actions to reach an as wide as possible audience.
- Innovation: A lot of focus is being put on innovation, preferably in co-creation with the customer. Crowdsourcing is also often used as a way to collect and improve ideas. To stimulate this, various initiatives were taken:
- An innovation competition which took place in Belgium in 2012. A new competition for the whole KBC Group will be launched in October 2013.
- PitchStops: quarterly we organize PitchStops where employees with innovative ideas can pitch these to a board of managers. If the idea is considered as supportive to our strategy and feasible, the idea can be implemented.
Innovation Community: a community of employees volunteering to embed idea-generation and innovation in our company.
When The Pitch, an innovation competition in 2012, ended, we saw an energized company and colleagues that, as out of nowhere, suddenly surfaced. Quite a few of the these colleagues got a new role : innovation and entrepreneurship became key assets in our organization and the new culture. They however lacked three things : a common language, a common goal and common ground. Our team of in-house consultants offered a solution… based on stewardship. They took the lead in an enticing new story for KBC : how do we, in our company, keep ideas flowing to feed the hungry wolves of innovation? After a thorough study and survey, all identified stakeholders/promotors of innovation gathered in a first of its kind meeting. Never before did we gather all identified innovative minds in the company with but one question : “how do you work?”. During this workshop, a process (the funnel) was defined and the different requirements to narrow down the number of ideas were summarized. This group of colleagues (employees) prepared a second meeting to connect the innovation funnel with the renewed “idea”-process in the Business oriented departments. After linking the innovation funnel with the agile driven and profit (rather than cost) oriented project process, six key showstoppers were identified. Again, the innovation community united, divided tasks and makes progress in solving these issues.
Conclusion : Bringing together the people that are actively involved in a process, immature as it is, creates an amazing drive to improve and finalise it. No one needs management to do better what they love to do.
Chasing rainbows: a group of employees volunteering to bring a vision on the future and a fit role for KBC in that future.
Where do good ideas come from? In our modern age, this is probably the one million dollar question. We don’t know where they come from… but we do know how we can increase the change to get better ideas.
Commissioned by top management and with a clear assignment to bring a vision on the future and a fit role for KBC in that future, an inspiring and rather rogue like employee gathered free-thinkers from all over the company.
The usual suspects? No… most of them never met before. They were brought in the projectgroup as friends of friends of friends. In a truly democratic style, they set sail on a journey to the end of the rainbow.
We set up our own approach, contacted external speakers, organized our offsites and everything else we deemed fit for our task. From the beginning, we relied on our network and creativity rather than on a large budget (we used it to celebrate the end with a copious meal… hey, we’re from Belgium!). After a few months, still before the deadline, our ideas crystallized in socio-economic trends on which we based new ideas. New approaches, new products, banking with an eye on 2020. We gathered it all in a roadshow, wrote a small accompanying magazine and started with a physical presentation from our conclusions for our sponsor. Weeks after that, we were still touring the company explaining which underlying streams were creating a new social fabric in which our company had to reconquer a proper position… and with which approached and ideas we saw that happening.
Conclusion : good ideas are all over the company. Limiting out-of-the-box sessions and invention of new products to designated teams or management, is a waste of talent and ingenuity. Henry Ford once said “why is it that every pair of hands I need, comes with a brain attached to it”. Every new effort to bring our colleagues into an entrepreneurial spirit adds counterweight to Ford’s ideas about how a company should be run. By giving a clear assignment and a target date, management invited us to live our own dream yet deliver results.
The main challenges are the management culture, organization and employee engagement. As the PEARL program is still ongoing, we are still facing these challenges, but try to tackle them armed with the passion of the employees.
- Management culture
- Support to top management: Inspiration moments for the Executive Committee Members and Senior General Management were appropriate to ensure buy-in and understanding , exemplary PEARL behavior (‘Walk the talk’) and the enhancement of the PEARL culture within their own business line. A first Summit for the Top 40 took place in Autumn 2012, the second took place in March 2013 and the next one will take place in November. The Summits are a combination of key notes, workshops, exchange of ideas and experiences, wake-up calls from the employees and fun elements around the different PEARL themes (Leadership, Change, Innovation, Empowerment, …). Especially the Summit of March was very successful and the positive vibe within this group was clear. Specifically for our top300 we've started with Change Workshops with a management institute, Vlerick. All top300 managers get a chance to go to a two day workshop. These workshops challenge the beliefs of the participants. These workshops are planned throughout the year and already two took place with extremly good results.
- Top managers on their turn discuss about PEARL with their management (within their own business), providing them with the necessary support (workshops, training, PEARL Happy hours, debates, …).
- The main challenge we are currently dealing with is to convince middle management for the new culture, as they feel threatened in their position. The new culture of letting go control and of giving power to employees can bring uncertainty and doubt to managers who have been used to do the opposite for years and years. Moreover, they now feel ‘squeezed’ between top management aiming for and stimulating a PEARL culture and the employees being enthusiastic about it and taking more and more initiatives out of the normal scope of their jobs and out of the control of their direct managers.
To tackle this,
- we have made a new leadership model (cfr. supra). This will create clarity on their role and the planned tailormade support will help them to grow into this new role. The Management Development team has developed a special website and App on leadership with hands-on tools for the issues they are struggling with. The same team is available for team workshops, intervisions, .... One of the key instruments will be the introduction of peer coaching, as we believe this might be a strong stimulator for the right behaviour.
- we envisage some Appreciative Inquiry workshops with middle management about their dreams, strengths and visions. That way, we give them room to further discuss their roels and they might come up with some nice and innovative ideas on their future role and how to approach. This kind of exercise could also be of help with a view to a less hierarchical organisation, which we discuss below.
2. Employee engagement and pride: since the start of PEARL we are fully aware of the fact that not all employees like the change that PEARL brings . We however have decided to focus on the early adopters and the quick followers instead of paying too much attention to the non-believers. If these groups are passionate about the change, the laggers will certainly follow. Through viral change we believe we can reach our goal. Moreover, a lot of employees feel attracted by the letter E of Empowerment and now feel the freedom to take initiative, to be creative, etc. If people are accountable for their work, they will be proud of their work more readily.The fact that KBC recently has been able to repay a large part of its debts to the government has certainly been beneficial to the pride of the employees.
So far we have noticed that storytelling and community-working are strong instruments to get people's interest and to get them involved. It is also clear that you have to use different communication channels and approaches to reach all kinds of employeesApart from that, the change through pEarly Adopters and Ambassadors instead of an overall change approach at corporate level also helps, as this change is adapted to the needs of the business domain and people have a sounding board amongst their colleagues (instead of an anonymous mailbox).
In Autumn we plan an evaluation on 1 year PEARL and will further investigate how we can further enhance employee engagement.
3. KBC had, over the last years,a very hierarchical structure with a lot of silo-thinking and therefore slow decision processes. We did not have a real culture of questioning and improving things in a no-nonsense way. A good structure and culture will spontaneously make employees feel more empowered and accountable.
Adaptations have been made for the governance process, but we are still being confronted with a lot of hierarchical levels (even if in some parts they have already decreased, especially at lower levels).
Currently we are working on the following solutions:
- Our Organizational department could deal with this issue, but ideally the managers themselves make their structures lighter.
- In the future we will have less managers and bigger teams. Therefore we need to create other interesting career tracks. At this moment, the way to advance in the company is by becoming a manager. This is to be changed.
- HR is preparing workshops and awareness sessions for management teams and employees on empowerment. A good future leader is the one who makes himself redundant by enhancing self-steering.
As the PEARL program has started less than a year ago, we do not have fine metrics on the results. However:
- We see more and more initiatives popping up all over the company and at all levels. And most importantly, we feel a vibe and dynamic throughout the company that we have not felt for a lot of years.
- We consider the number of Ambassadors in Belgium (almost 5% of the employees) a success, given the fact that the idea was launched only 3 months ago.
- Active participation in workshops, inspiration sessions and other PEARL initiatives
- We have now done a first employee satisfaction survey on PEARL (baseline measurement). The score on Empowerment is 75%. The overall annual employee satisfaction survey has improved considerably.
- This year we have already launched two surveys for the Top 300 (management level) and there is a clear improvement in the attitude and perception of PEARL.
- We have over 7000 employees and managers active on our internal social collaboration platform.
- As regards unintended side-effects, the only one we have noticed so far is that employees are taking initiatives and are not allowed by their direct boss (even ‘punished’) as they are ‘surpassing the boundaries’ of their regular jobs. However, this happened only a few times and necessary action has always been taken to discuss this with the team leader involved.
We have developped our own change metric. It's a survey of 14 questions, which is common to our entire group. This survey is held twice a year in all countries where KBC is active. The first results are just in and are positive. They do show us some clear room for improvement in certain domains. The metrics is calculated in a similar way as NPS score. This specific metric fits in a larger metric we have developped for reporting. In this metric there is a dimension, called people dimension. This dimension is measured on three fields: employees, society and customers. By combining the three factors we avoid to focus on purely internal matters.
- Read the book on viral change of Leandro Herrero. It’s a social, human approach on change, driven by the majority and most important resource of a company: the employees.
- Make sure you have the support of top management
- Be honest and dare to discuss difficult issues to be tackled (the elephants in the room)
- Make sure that the overall support is always geared towards different target groups, so that you reach as many people you possibly can (managers vs. employees, early adopters, quick followers, …)
- Do not pay attention to the non-believers, but continue with the early adopters and the quick followers. The others will follow in the end or will never follow and leave the company.
- Communicate, communicate, communicate
- Make it fun, but keep focusing on results.
- Use the passion of people
- Storytelling and communities work, but take some time for the real take-off. Before that time you need to persist.
- If you want things to be different, the change approach also needs to be different. A small change team which inspires as much as possible people to change their own environment and doesn’t force anyone to change.
- Do projects in a different way. Select a number of highly visible projects and make sure they are managed in the way you want to promote. This way the participants of the projects get a good learning experience and you can share the lessons learned with a broader audience later.
Although the corporate culture transformation has been decided upon by the Group Executive Committee, the real implementation is mainly driven by a team of 4 persons responsible for stimulating the change at Group level and all employees who voluntarily participate in this transformation. So, we believe the employees deserve the credits.