Amidst market instability from a global recession, legislative change and undervalued stocks forecasting M&A activity, one thing remains certain – change is on the horizon.

The threat of mandatory change, such as Solvency II or banking regulatory revisions, can create organisational confusion, disillusionment and lead to low productivity.

Change may be the only constant in financial services for some time to come. Governor of the Bank of England Mervyn King stated:

"We should not expect to change the financial system for the better overnight. Rather we need radical reforms that give us a much more robust system in the long term, accepting that it may take a period of many years to get there."

All-too frequently it is the human and cultural aspects of organisational change which are overlooked, and are the reason why change fails to gain traction. This article proposes six principles to embrace the uncertain financial services road ahead with greater clarity of focus.

1) Build a common vision

One of the most common reasons cited for programme failure is the lack of a shared vision amongst stakeholders. Defining a desired 'to be' state - post Solvency II/merger/acquisition - which everyone affected by the change can articulate and understand is fundamental. It unifies the business behind a common goal and focuses attention.

The vision helps set priorities and describes what the business will 'stand for' once an upheaval has been managed. Crafting the vision should include representatives from all groups that have an investment in the outcome, increasing the chances of universal buy-in.

2) Make a compelling case for change

Creating a compelling case for change is about communicating why the change needs to happen and making it 'real' for individuals. Employees can feel that the change is not necessary, and that they do not need to be involved with it.

Where a clear mandate exists - such as that decreed from the EU in the case of Solvency II - communicating this to employees helps align a change programme.

3) Identify and realise the 'quick wins'

Actions speak louder than words in any change situation and the rapid delivery of small but meaningful 'quick wins' early in the programme, sends out powerful messages to the organisation.

In the case of organisational mergers, firms can demonstrate value through optimising the effectiveness of a particular function early in the process. This builds credibility and helps provide the licence to do bigger things.

4) Adopt a structured project and programme management approach

Programme and project management disciplines break down delivery in manageable chunks, enabling control and progress monitoring. Change relies upon the cultural and human aspects of adopting the 'to be' state, but it is essential that these are coerced by a structured and coherent programme of delivery.

There are many ways to achieve this but the outcome should be a clear hierarchy of 'products' with no overlap or gaps that reduces the potential for confusion or accidental omission.

5) Recognise the change-readiness of stakeholder groups within the organisation

Prior to initiation of a change programme varying states of preparedness exit within key stakeholder groups.

For example, the level of engagement amongst senior executives following an acquisition may be very different to junior employees. Understanding the 'readiness' of each of these groups against defined aspects of the change enables the programme team to assess and monitor key risks to programme adoption.

Moorhouse Stakeholder readiness wheel

6) Manage the programme from a benefits-led perspective

Benefits realisation management is a discipline that is frequently overlooked, resulting in planned benefits described in the business case not being fully delivered.

A benefits-led approach - starting with the definition of the intended programme benefits and working backwards to the required business change - focuses the programme upon the delivery of real value.

Summary

Recognising the requirement for extraordinary transformation is the first step to implementing significant change programmes. Financial market instability and austerity across both private and public sectors is set to drive an extended period of organisational change within the industry.