Many of those whom CEO’s are inspiring today will be retrenched tomorrow, usually in a horrible way. And the highly paid CEOs will be forced to continue with the same “inspiration” to those who remain.
While I am sure some CEOs have been honest with their staff on this issue, I don’t know of any who have gone public --- certainty no bankers.
That’s why I was stunned this week to hear NAB chief Andrew Thorburn publicly admit that there would be significant job losses across a wide array of industries, including banking and including NAB.
Given the tidal wave of increased computer power, robots and artificial intelligence, banks and other organisations that do not keep up with change will go out of business.
Thorburn, speaking to the Trans-Tasman Business Circle, said the global community job displacement “would be profound”. He cited an example in the US where driverless trucks were set to displace three million truckies over the next decade.
NAB faced competition from other banks and new high technology organisations that would require NAB to be flexible and try strategies, which it would abandon in six months if they did not work.
I would add that such a snap decision-making aim represents a totally new strategic paradigm for the NAB and all other banks. Yet in today’s world of rapid change, it is essential.
So how do CEOs train staff and inspire them when both the CEO and the staff know that there is no job security and the person being “inspired” today could be retrenched tomorrow.
In my profession, journalism, we have faced this situation for most of the last decade and regular industry waves of retrenchment, particularly among older journalists, are now causing young talent to leave the profession.
Thorburn’s proposed solution for the NAB has rarely been tried in Australia. First it requires the CEO to be honest and explain the real situation to staff. And second, offer to train staff so that if they are caught in NAB retrenchment waves they will be equipped to get employment elsewhere. In addition, special help must be provided to assist in the transition.
And so (in my words) the NAB staff proposal is that wherever they go they will face the possibility of retrenchment---stay with us and we will train you for the new world and you can apply your new knowledge and talents elsewhere if we can’t use them.
This is absolutely different to the rousing statements that CEOs across the nation parrot as they seek loyalty for organisations that can no longer offer loyalty in exchange.
My banking friends outside NAB say that banks in a decade will be able to perform their present tasks with roughly half the present staff. Now, of course, there will be new tasks and artificial intelligence will replace many of the overseas call centres so customer contact will return to Australia, creating new jobs here but giving headaches to India and the Philippines.
Finally, also on the panel was NAB chairman Ken Henry. He did not mention the Commonwealth Bank but like all other chairmen of large companies he will be pondering what he would have done if he faced the dilemma facing Catherine Livingstone as chair of CBA. Should she have retrenched Ian Narev on the spot? One of Livingstone’s problems is that she can’t be sure who among the CBA executives will be caught up in the money-laundering scandal so Narev stays on as CEO until June.
I suspect that if the same thing happened at NAB, Thorburn would have already packed his bags. Ken Henry said: “He (Andrew Thorburn) knows that there could come a time when I have to throw him under a bus.
“He has to trust me that when I am doing that I’m actually doing it in the best interests of the company ---even if he might regard it as being unfair to him personally.”
Henry is able to say that because there is no crisis issue at NAB.
Ian Narev has kept the CBA ahead of his peers but in the next nine months his task of keeping the bank up with the industry changes and at the same time handling the multitude of inquiries and controversies hitting the bank is next to impossible.
The great long-term risk is that the CBA will lose market share in the turmoil.
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How do chief executives of large organisations inspire their staff to work hard and be flexible when the chiefs know that the organisation will have to slash staff to be viable in the future?