World NOTES

A Russian powder keg

December 12 1994
World NOTES

A Russian powder keg

December 12 1994

CAMP COLLEGIALITY

BUSINESS

One bank takes its employees into the hills in hopes that they will change their ways

D'ARCY JENISH

The topic of conversation at lunch is the past—specifically, the way things used to be done at the Canadian Imperial Bank of Commerce. Seven men and women, mostly in their late 30s or early 40s, are seated around a table enjoying quiche, salad and mineral water. They have all worked at CIBC for at least 15 years, and some have been there long enough to recall the days when every branch manager kept a pistol in his desk drawer in case of a holdup. They remember when sexual harassment of female employees was commonplace and when a job at the bank was a job for life. They also recall distant, authoritarian branch managers. “One guy had a light installed outside his office,” chuckles Elliott Dary, 43, who manages a Winnipeg branch, “and you couldn’t go in when it was on. In those days, the manager was God.”

The conversation is lively and sprinkled with laughter. But this is a working lunch for Dary and his colleagues. They, along with about 40 other employees from all levels at the bank’s domestic and international operations, are taking a one-week management development course at the CIBC Leadership Centre, a former luxury health spa, located in rolling, wooded countryside 30 km north of Toronto.

The bank purchased the complex for an undisclosed amount in June,

1992, and converted it into a training facility as part of a comprehensive strategy aimed at creating a new corporate culture. “We had too much administration and bureaucracy,” says CIBC chairman AÍ Flood. ‘We’re trying to be entrepreneurial because there are dramatic changes occurring in our industry.”

Retail banking is being reshaped by several potent forces, including new information technology and the increasing sophistication of the customer. Many clients now use automated teller machines for routine transactions like deposits and withdrawals, but they expect customer service representatives to provide advice about products such as mutual funds and term deposits. “A major percentage of the population today is very knowledgeable about the financial markets,” says Flood. “Our customers

are looking for advice, whether it’s to create wealth or maintain wealth.”

By any yardstick, CIBC is attempting to make an enormous change. For one thing, the bank is striving for better results with fewer employees. Over the past five years, CIBC, Canada’s second-largest financial institution, has trimmed its combined full-time and part-time workforce to 40,807 from 43,000 through layoffs, early retirements and attrition—a dramatic development in an industry with a tradition of lifetime job security. “These changes are creating a lot of stress within the ranks,” says Hugh Brown, bank analyst with the Toronto-based investment firm Nesbitt Burns. “But I believe what they’re trying to do is the right thing.”

Senior executives are asking employees at every level to think more creatively and work together more effectively. Like most financial institutions, CEBC has been a hierarchical organization run from the top. Managers made decisions and directed their employees. The old bank was a pyramid-shaped organization, with the chairman at the top, executives and managers in the middle, and thousands of branchlevel loans officers and tellers, now called

customer service representatives, at the bottom. In the new bank, that tradition is supposed to be inverted. Managers, from the branch level right to the chairman, are being asked to support the front-line employees who deal directly with customers. Furthermore, CIBC is spending about $50 million a year on staff development to ensure these changes happen.

In part, the bank is trying to nurture its new culture through one-week managerial-level courses offered at the leadership centre, which ranks as one of the most sumptuous corporate training centres in the country. When it was known as the King Ranch Health Spa and Fitness Resort, affluent guests paid up to $1,700 for 10-day sport and fitness holidays. But after the $45-million spa went bankrupt in 1991, CIBC saw the facility as an ideal employee retreat. “We recognized that to work on the culture required a great deal of reflection,” says Michele Darling, the bank’s executive vice-president of human resources. “Employees would need to get away from dayto-day business to examine themselves and the work they do.”

On most Sunday nights, Elliott Dary is home in Winnipeg preparing for work at the suburban branch he manages. On this autumn Sunday evening, however, he is participating in the introductory session of the bank’s five-day Foundations of Leadership course, along with 60 fellow employees from across Canada, the United States, the Caribbean and Great Britain.

The session opens with an address from Marc Gian, a Montreal-based human-resources and organizationdevelopment consultant and one of the four facilitators who will lead the employees through the course. The 45-year-old Gian speaks with a slight French accent and a reverential tone.

The bank is an “organization in transformation,” he says, adding that “we transform an organization by transforming ourselves.” Change requires self-evaluation and increased selfawareness. “This is your chance to look at yourself and tire fundamental assumptions behind your actions,” he says. “This is a week of exploration.”

Gian’s gentle approach contrasts sharply with Hubert Saint-Onge’s energetic explanation of the new corporate culture on Monday morning. Saint-Onge, 43, a fluently bilingual francophone and CIBC vicepresident in charge of the leadership centre, speaks for an hour without notes. “If managers do not change, the organization will not change,” he says, “because each one of you has more impact on your employees than you will ever imagine.”

The serious self-exploration begins after lunch. Each participant receives the results of a questionnaire that fellow employees filled out prior to their arrival. It contains 16 questions and grades the manager’s ability to listen to coworkers, share information and delegate decision-making power. The results are compiled and averaged so that the manager cannot determine how his peers responded, but he can see how his boss graded him. “Remember, this is a gift,” says Gian. “Feedback from your colleagues is always a gift.”

“Yeah, it’s a gift we can’t return,” quips one participant.

“I need a Scotch,” says another.

“What are the risks in openness and candor?” Gian asks rhetorically. “I strongly urge you to talk to your subordinates about the assessments when you get back.”

The questionnaires have an immediate effect. For several minutes, there is silence, and the participants resemble schoolchildren scanning their report cards. Gian gently breaks their concentration to offer private counselling in a side room, if anyone is having difficulty accepting the results. Nobody takes him up on it, but leadership centre employees say that counselling is occasionally required. “Sometimes, these questionnaires are a real shock,” says Brenda Augustin, a CIBC human resources consultant. ‘We’ve seen people get real negative feedback.”

In an interview in her spacious and tidy fifthfloor office at CIBC’s downtown Toronto headquarters, Michele Darling emphasizes that she is a human-resources professional rather than a banker. She joined CIBC in November, 1990, as a vice-president, after holding senior positions with companies such as Consumers Gas and General Foods. But wherever she works, Darling has a mandate to shake things up. “I’ve always been an agent of internal change,” she says. “I’ve usually been hired to bring about fairly profound cultural change. But this is by far the most complex initiative I’ve ever been involved in.”

One of the tools for transforming the culture at CIBC is competency modelling. The humanresources department has compiled lists of technical skills, personal attributes and professional capabilities required to perform every single position at the bank. They have used these so-called

competencies to develop questionnaires for each position so that employees can rate themselves. As of September, about 35,000 fulland part-time employees up to the vicepresidential level had completed the questionnaires and reviewed them with their superiors.

On Thursday afternoon, near the end of the five-day Foundations of Leadership course, the participants are ready for a session called I “action learning.” Facilitator Louise d Macdonald asks someone to present I a real business problem. The rest of 9 the group is supposed to pose ques1 fions that will lead their colleague to realize that the solution lies within his grasp. The objective, she explains, is to empower rather than direct the employee.

“John Smith,” whose identity must be concealed because of the nature of his problem, says that one of his employees has been producing substandard work for 18 months. Smith is convinced the employee is incompetent, but is reluctant to fire him. His story prompts numerous questions, mostly about the problem employee. Then Macdonald intervenes. She tells them to focus their questions on Smith to find out why he has been unable to act. After a 30-minute grilling, in which he reveals everything he has done, and not done, Smith seems genuinely relieved. “It really has gone too far,” he tells the group. “It’s a termination situation, and I’ve got to let the person know that.”

For this group of CIBC employees, the culmination of their week at the leadership centre is a two-hour question-and-answer session with Flood. The questions sound tame, but as Flood responds, a fresh image emerges. The chairman has abandoned, temporarily at least, the power and prestige that comes with his office. He is out on the floor trying to sell, rather than direct, his employees on a new way of running the business. He tells them that he wants to create a dynamic organization. He says he wants to remove the fear that exists in the organization, and he tells them to tolerate mistakes, especially from employees who are showing initiative.

From the conversations that occur in the corridors afterward, it is apparent that some employees remain concerned about the bank’s long-term commitment to the new ideas and how they can be put into practice. But their week at the leadership centre appears to have been a rejuvenating experience. “It was really challenging,” Dary said before his flight home to Winnipeg. “It makes you look at things from different perspectives, and forces you to do a lot of introspection.” In some professions, that might not be unusual. But in banking, a business long bound by traditions and encumbered by rules, it may be the starting point for a cultural revolution.

D’ARCY JENISH