Transforming HR and culture: An interview with Banco de Crédito del
Perú’s Bernardo Sambra
An HR leader describes
how an effort to increase his bank’s efficiency meant challenging the bank’s
culture—and himself.
As Peru’s oldest and largest
bank, Banco de Crédito
del Perú (BCP) is no stranger to change, and the pace has only accelerated. In
2009, a major transformation of its branch network and central operations
yielded quick results: customer wait times fell by more than 50 percent, while
employee productivity rose.1
Over the next several
years, Peru’s banking sector grew rapidly in tandem with the larger economy.
But more recently, BCP’s share of that growth began slowly but perceptibly to
decline. Moreover, the bank’s cost-income ratio remained stubbornly high
compared with several of its major competitors in the region. BCP’s leaders saw
a need to take action ahead of an economic cooldown.
That led to a new call
for change: not only for the bank’s operations to become more efficient, but for its entire organization to challenge the
bank’s traditional culture. Bernardo Sambra, BCP’s chief human-resources
officer, has been at the forefront of this effort—which actually increased
employee satisfaction, even as it reduced the bank’s cost-income ratio by
almost one-fifth.
Sambra spoke with
McKinsey’s Rodrigo Chaparro Gazzo and Christian Johnson at McKinsey’s Lima
office.
McKinsey: What were the challenges that
BCP saw over the past few years?
Bernardo Sambra: By many measures, we were
doing well: we were the leading bank in Peru across a wide range of sectors, we
were making good profits, hiring good people. Most people thought everything
was great.
But when we compared
ourselves with our peers, we saw one big gap: we were not where we deserved to
be in terms of efficiency. This was like a bell that kept ringing—in the
boardroom, in committee meetings, all the time.
McKinsey: What does efficiency mean for
BCP?
Bernardo Sambra: That was the real question.
It seemed as though everyone had a different idea of what efficiency was
and—more importantly—what becoming more efficient would enable the bank to do.
So we needed to start
by aligning ourselves on the definition of efficiency, balancing several
long-standing principles.
The first principle was
simple austerity, doing more with less. Our next principle emphasized leadership and our tradition
of seeking to be number one at everything we do—every product, every function.
The third principle was to make decisions as if the resources to be used were
our own. And the final one took an enterprise perspective, looking at success
for the bank as a whole rather than just for each business or function.
McKinsey: There’s clearly some tension
among the principles.
Bernardo Sambra: And they’re all important.
That’s why our workshops and discussions involved so much of the organization:
more than 350 managers and leaders participated. We suspected that the type of
changes BCP needed to make would require a really broad consensus on
trade-offs. So, for example, we decided that aiming for number one in a
particular product or function makes sense if it benefits the bank as a
whole—if it contributes to revenues or helps us recruit talented people, that
sort of impact—but may not make sense if the only benefit is a really narrow
one.
McKinsey: What was the outcome of these
conversations?
Bernardo Sambra: The most important outcome
was alignment among our leaders on a plan to shape efficiency on three
different fronts. The first front was deep performance improvement, across all
our support functions, our IT and operations, our product portfolio, and our
commercial model. At the same time, our second front looked at cost in much
more detail. We wanted a new discipline on cost consciousness to guide people’s
thinking in the same way that client service always has—in a constant cycle of
finding new opportunities. That would need sharper discipline, so we created a
central team to scrutinize cost deviations, along with new governance
committees to review the business case for each proposed investment above a
certain amount.
But ultimately, to make
all of these changes last, we knew we would need to change our culture.
That was the third front.
McKinsey: Where do you start in
changing a culture?
Bernardo Sambra: We launched on all three
fronts at once, so we were working on our culture in the same places we were
making performance and cost changes. Our first efforts focused on our corporate
functions—and the function I lead, HR, was among the first functions to be
transformed.
McKinsey: How was that experience for
you as a leader?
Bernardo Sambra: I discovered that I had the
same mentality as everyone else. I understood how important this transformation
was, but I remember saying, “How can you ask me to change when BCP is
recognized as the best employer in Peru? Think of all the awards we have
received.” At the time, I was busy thinking about the world-class HR model that
I thought would be the function’s next step.
I wanted BCP to have
the best HR function in Peru. But I came to realize that this ambition was for
me. I wanted to be number one.
What I learned through
this transformation process was very difficult. The message was, “No. You do
not need to hire more people to ‘rebuild HR.’ You are already good—find
opportunities to keep doing what you’re doing in a more profitable way.”
McKinsey: You had to make a big change
as well.
Bernardo Sambra: Yes. It led to a really
positive realization: I could change my unit, manage in a different way,
implement different processes, and look in the mirror and still see the value
that I was creating.
That breakthrough was
critical for the next phases of the transformation and defined our
change-management approach.
Now, before a
transformation team arrives in a particular unit, the top managers and their
direct reports hold a four-hour workshop in which they discuss why they must
implement these specific changes, at this time, in this unit. This step helps
ensure that the managers own the transformation.
McKinsey: How is that different from
what BCP might have done in the past?
Bernardo Sambra: In the past, we had issued
everyone targets with Gantt charts for meeting them. But we didn’t want to make
wholesale cuts. In some respects, wholesale cuts may seem easier because
everything’s done very quickly. That’s exactly what we wanted to avoid because
it can so damage an organization in the long run.
But that decision also
meant that everyone would go through several months of uncertainty as the
managers determined which changes they needed to make. Instead of assuming that
all the cuts will be the same, our process asks managers to start with a funnel
of ideas. They start out very broad and gradually become sharper and better
defined until they turn into specific initiatives that each manager commits to
make.
McKinsey: That’s a lot of uncertainty
while they make their decisions, and uncertainty is dangerous to morale, no?
Bernardo Sambra: That leads to the second
point. In parallel, each organization goes through a change-management exercise,
focusing on how people think about cost and efficiency. We found that people
saw certain costs as unavoidable—as unquestionable. We wanted them to realize
that they could work differently, ask more questions, and come up with
different answers.
But what probably
mattered more than anything was very simple: thanking people. “Thank you, thank
you, and thank you one more time for helping BCP during this time.”
McKinsey: What effect have you seen on
the staff?
Bernardo Sambra: Earlier this year, we
received our most recent employee-climate-survey results, which have been
rising for several years. In the units being transformed, employee satisfaction
held steady in 2014 and rose in 2015. It’s now 10 percent higher than it was in
2011, when it was already more than 70 percent favorable.
McKinsey: Stepping back for a moment
and reflecting, what sorts of things can the organization do today that it
couldn’t before this transformation started?
Bernardo Sambra: Let me use HR as an example
of what we have done in our support functions. In recruitment and selection, we’re much more focused on strategic questions now
because a third-party provider takes care of time-consuming, lower-value
tasks—in our case, things such as collecting CVs and setting up interview
logistics. In training, we used to be specialized by business line, which
subjected the team to huge peaks and valleys in demand. Pooling all of our
training resources has let us manage capacity much more effectively and made
people’s jobs easier.
Throughout our
organization, leaders who previously had a hard time prioritizing their teams’
work can now rely on visual-management tools to see the projects their people
are working on, the status of each task, and the skills that are available or
needed at any given point in time. They’re becoming better managers. When I
walk through the HR department in the morning and see everyone meeting for 15
minutes, looking at yesterday’s performance and finding every single
opportunity to make an improvement, it really makes me proud.
Replicate these results
across every function being transformed, and it adds up quickly. In two years,
our cost-income ratio has fallen from 49 to 41.
McKinsey: How do you keep from slipping
back?
Bernardo Sambra: We set up a completely new
structure for making decisions. Now, even if you have enough funds in your
budget, you must clearly explain your spending: one of the legacies of this
transformation is an efficiency division that’s responsible for asking
difficult questions. This is all simply a way of life now.
McKinsey: What sort of lessons would
you give to another organization, based on BCP’s experience?
Bernardo Sambra: First, in deciding to act,
our most important step—and a very difficult one for us—was to have a
conversation without PowerPoint. We needed to think about BCP’s future, and for
that type of discussion, PowerPoint is of limited use.
Second, get a clear
mandate from the CEO. It may sound commonsensical, but it makes all the
difference.
Third, people need a
compelling story to help them understand why they must change. Without the
compelling story, a mandate is just an order.
Fourth, make the
managers the owners of the process, not the victims of the process. HR can
provide support.
Fifth, be consistent,
no matter how painful it may be. If you start making exceptions, people will
lose faith in the process.
And finally, when you start getting
the results you want, it is very easy to relax. Don’t.
By Rodrigo Chaparro Gazzo and Christian
Johnson
http://www.mckinsey.com/business-functions/operations/our-insights/transforming-hr-and-culture-an-interview-with-banco-de-credito-del-perus-bernardo-sambra?cid=other-eml-alt-mip-mck-oth-1611
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