By Marc Wright
Pierre Goad is the Co-Head of Communications at HSBC and no fan of traditional top-down cascade communications:
“One of the things we’ve done is to get rid of channel managers. The position no longer exists. We don’t waste our time crafting the perfect message and most efficient channel to plant communications in people’s heads. Implanting messages doesn’t work with 5-year-olds let alone with 259,000 grown-ups. Instead we set out to create a more transparent environment to support our business strategy. We wanted to help people listen to each other.”
So in 2012 Goad and his team created HSBC Exchange, a simple but powerful idea that turns employee communications on its head. Emmajane Varley, who who heads up Employee Communications for Global Banking and Markets explains how it works:
“People have different variants of Exchange around the world. But basically managers call a meeting with their direct reports. Numbers work very well around 10 – under 8 and people feel exposed and more than 15 and a couple of people dominate and it becomes unbalanced. There is no agenda and employees talk about anything they want. The manager just listens.
“HSBC Exchange has allowed the employee voice to rise to the surface. And each employee has a seat at the top table because they influence the discussion at the Group Management Board. Senior managers get new insight into problems they were unaware of — or discover what they thought they had fixed 18 months ago is still broken. If they don’t walk out laughing, they walk out crying as they can barely believe what they have heard.”
A trust deficit
Exchange is not the product of a new communication theory, it was introduced into the bank to deal with two issues. A shift in strategy was putting the organisation under strain in 2012 and, separately, investigations into past regulatory breaches in the US and Mexico were coming to a head. In late 2012 the bank was fined $1.9 billion.
“Before Stuart Gulliver took over as CEO in 2011 we were in a state of strategic drift,” explains Goad. “We had acquired a large number of businesses but we had not really taken them over culturally. There was lots of hierarchical, top-down, rank-based behaviour where people did not feel that they could speak up. Stuart Gulliver wanted to change that.”
Goad had worked with Gulliver in Hong Kong and London in a variety of comms and strategy roles, but he left to take up Head of Communications at Zurich Insurance in 2010. When Gulliver got the CEO job the former Canadian journalist returned to the bank’s HQ at Canary Wharf in London to help sort out employee communications for the 259,000 staff.
“We wanted to make it OK to speak up. We made some simple rules: the manager does not talk in the meetings but just listens; there is no agenda; and the time belongs to the employees.”
Managers report back through an online portal, recording which part of the bank they are in, the subjects that were raised and the sentiment of the team on each issue. In Q2 of 2013 33,000 staff held an Exchange. When I visited the numbers were just in for Q34: 63,000 which represents 25% of the bank. This “Shut Up and Listen” project is clearly gaining momentum. In Mexico where the bank is obviously going through a rough time, 73% of staff have had an Exchange meeting where they could have their say on anything from the quality of the coffee to dealing with the fall-out from the past money-laundering and other regulatory breaches.
“Exchange has turned sentiment into fact. Before, lots of employees across the world were talking about things that bothered them. And they were talking about them when on the way to work, with their friends, in the corridors, just before meetings. Now, those conversations are being listened to by the Group Management Board. That completely changes the way employees can see leaders because the
“Exchange has turned sentiment into fact. Before, lots of employees across the world were talking about things that bothered them. And they were talking about them when on the way to work, with their friends, in the corridors, just before meetings. Now, those conversations are being listened to by the Group Management Board. That completely changes the way employees see leaders because they now know they’re working for leaders who are listening and doing something about it. And that changes culture,” says Varley.
It all started with a pilot in the Middle East to avoid it appearing too UK-centric. Varley explains:
“We knew that we needed a Zuckerberg approach of not trying to make it perfect. 60% and then refining was enough to prove to the rest of the world that this works. We had an incredibly supportive regional CEO who got it instantly and in 7 weeks 3,000 people took part in an Exchange and 110 managers did the listening. The results were immediately favourable: ‘Best meeting I ever had.’ ‘First time I felt like a shareholder.’ ‘I felt like I was suddenly able to help with decision-making.’”
The outputs of the Exchanges are collected in a report and word cloud and presented to the Group Management Board and business and function executive committees across the bank. “Typically we are at the end of the agenda and given 5 minutes,” says Varley, “but sometimes they end up discussing the results for 50 minutes as they provide such insight about what is actually cutting through.”
And the Exchanges have already had a real impact on how HSBC is run. One message that came up strongly was just how much staff dislike the performance management system. That then prompted a discussion at senior management level.
“Exchange forces managers to deal with issues that they don’t necessarily want to talk about,” says Goad. “And that’s a good thing.”
Priming the pump
So how hard was it to get managers listening and staff talking openly? Varley explains how they rolled out Exchange in the pilot.
“If we are encouraging conversations then we could not just email a toolkit. We needed to talk to them. The head of employee communications in the region did conference calls and face to face meetings to ensure that every part of the bank participated.
“It was hard to start with. One line manager sat with their team in silence for 6 minutes. Some managers had not been silent for 30 years and they had to learn to be really comfortable with ambiguity and with silence. They had to develop listening skills. Not listening to then interrupt or defend or put right. There is always someone else in the room who will come up with a solution to put things right.”
“Work is a profoundly social experience. Large organisations do everything in their power to deny that. We limit the ability to interact yet what we have come to appreciate is that communication has to be in every direction. Valuable information is missed if the manager on the walkie-talkie permanently pressing the Talk button. Exchange is not primarily a feedback mechanism. It does not need to lead to action. Rather it creates a safe place to communicate in an unstructured way.”
As well as building some much needed trust around the bank it has led to change. A vastly improved cafeteria in Dubai was a direct result of Exchange meetings. Better communication between the generations in Global Banking and Markets, HSBC’s wholesale bank. And parts of the business have adapted the Exchange techniques – for instance to brainstorm change in one major unit to massively reduce paperwork and customer frustration in opening new accounts.
Don’t depend on line managers to communicate
“People have started to trust each other,” says Goad. “It’s OK to tell the truth. If we have better facts we will make better decisions.”
“The last 10 years of communication theory is that all you have to do is get the line manager on board, develop the messages and then get 20,000 executives doing an imitation of the CEO and your work is done.
“In reality everyone tops and tails the message to suit their own agenda. The strategy disappears and it’s the line manger talking about what they want to do. Exchange enables people to build relationships and collaborate. Even teams scattered around the globe do Exchanges over telephone conferences. The leader is literally eavesdropping: ‘You guys just chat. I will be on mute but I will be listening to you.’ These managers are learning new skills on how to manage globally.”
Resistance starts at home
Goad and Varley both reveal that there was a lot of resistance within the Comms function: Exchange was considered not corporate and it was really crazy not to have an agenda or training for the line managers on how to run an Exchange. “You do not need to give training on how to be quiet,” Varley says. Instead they relied on a handful of people on the Comms team providing ‘superior active salesmanship’ .
“Some got it quickly which was an indicator they were good at developing relationships,” says Goad. “The drafters and crafters struggled to get their heads around this. You can’t sell a conversation through an email. Exchange will not work by posting a ‘meeting in a box’ toolkit on the intranet. It requires coaching and face to face.”
It also helped that the CEO gave Exchange a very strong endorsement.
“Stuart Gulliver does a lot of town halls. His biggest challenge is being able to find out what is happening at every level of the bank. The old style of HSBC town tall was a highly produced, rock and roll event. Now instead of writing a cheque to a production house, the town halls are a version of Exchange — simple, straightforward and conversational. The CEO takes any question and all levels of the bank are invited, rather than the great and the good.”
A small revolution
Now that the team has a full year under their belt and 25% of the company is doing an Exchange every quarter they want to keep up the momentum to generate the cultural change needed to face a challenging 2014. Varley explains:
“It won’t be called Exchange 10 years from now – it will just be a a team meeting, how we do things here. A small revolution has gone on with Exchange — it’s now OK to speak up and tell the truth.”
“There is a presumption of perfection in large companies. In your personal life it is accepted that every once in a while things don’t go to plan. But in corporate life you assume that to admit failure will lead to being sacked. That’s the fundamental change. Not talking about an uncomfortable fact does not change the uncomfortable fact. If you talk about it you increase the odds you might do something about it.”