Pity Christian Sewing. The chief executive of German banking giant Deutsche Bank is not having a good time. What started with a tough but brave call to close his equities business has turned into a low point in the company’s history.
There is the potential investigation into its entanglement with the scandal concerning the insolvent strategy company 1Malaysia Development Berhad. The bank is coming under fire for its $52m worth of pay-offs to departing bankers. And rather unhelpfully, two senior bankers decided that this was the context within which to be fitted for new £12,000 suits.
It would be easy to see this moment as defeat. The media is pouncing gleefully over every new revelation, while the US government is threatening further legal action.
But while this might be a painful time, defeat isn’t on the cards. This is a bank that, in the chief executive’s own words, substituted ambition for strategy. Its two-decade-long push to make a dent in Wall Street was the stuff of hubris, not of purpose.
The calls that Sewing has since made are brave and necessary – the beginning of a brighter future.
Taking 18,000 jobs out has the potential to kill momentum and morale stone-dead. But it is possible to harness this moment and create the energy for much-needed change.
How? There are three keys to getting this done – and done right.
First, be an adult about removing the jobs, making sure every employee understands why losses are necessary.
While poor results are partly to blame, the bank needs to reorient itself to its purpose (that is, what it was really founded to do), and invest substantially to exceed the ever-changing expectations of its customers. That requires funds that only cost-cutting will release.
How communication happens now is critical – emails and curt meetings are not and never have been communication. It’s amazing how big the difference is between a 30-minute meeting and a 60-minute conversation. People learn more about their employer from how they fire staff than anything else.
As the bank pivots, it will be tempting to drown in strategy. Hefty company policy documents might feel comforting, but this won’t get everyone rowing hard and in the same direction.
The bank now needs to focus on defining an incredibly simple and stretching direction for the business, articulating why it exists, what the plan is, and how everyone needs to operate to get there.
In 30 or 40 words, people should be able to connect once again with why their work is meaningful and important, and what is expected of them.
This can’t happen soon enough – and if done well, staff will be able to grab hold of it and turn it into the right plans and objectives. Then the bank can get moving again.
Unleash the frontline
If clear and committed around that future direction, people in the guts of the organisation will see what needs to happen to change the bank, and understand it better than their leaders.
Leaders should give them licence to change processes and structures where they can in order to improve the business and drive it forwards from the bottom up. And let them discuss the bigger things that they can’t control, so leaders can sort them.
Sewing has a hell of a job on his hands over the months ahead. He needs to take tough action, and he and his team must use everything they have ever learned to pull this off.
I for one hope that he is already figuring out how to do all this in a way that will supercharge his teams at every level. I know I would be.