In 2019, I consulted for one of the leading groups of structured financial institutions in East Africa. At the time, the Bank was struggling with declining financial performance at the group level. The profit after tax was reducing so fast that key stakeholders got concerned. At the same time, the operating costs were growing so fast. It was chaos.

After a thorough internal analysis, the Bank was characterised by internal misalignment, a stagnant culture, and declining performance. The Bank’s key indicators i.e. assets (loans), deposits, profitability, customer satisfaction, employee engagement, and portfolio at risk were all in the red. The board and executive leadership team were aware of the problem. Unfortunately, no one knew where to begin from. The bank had great systems and an impressive branch network, but the culture was killing the institution slowly.

Similar challenges can be seen in other industries too. One of the large food processing and manufacturing companies I consulted for was dealing with poor cross-departmental collaboration, while an SME in retail faced issues of high employee turnover. In both cases, culture was the core issue that I diagnosed. A culture that resisted change.

In the case of the bank, employees operated in silos. Departments were not talking to each other. As a result, decision-making was slow. Leadership was disconnected from the realities on the ground. People feared taking risks. Innovation was stifled, and morale was low. The impact? Key customer accounts were leaving, and staff engagement was at an all-time low, dragging productivity down.

The bank was facing a toxic mix of complacency and disengagement. The leadership team was drowning in reports. They lacked real insight into what was happening at the frontlines. The entire institution was reactive, putting out fires instead of proactively solving problems. This was evident in their key performance indicators:

  1. Customer satisfactiondropped by 18% within two years.
  2. Employee turnoverreached a worrying 23%, costing the bank millions in recruitment and training.
  3. Profitabilitywas eroding, with the bottom line shrinking by 12% annually.

This was a cultural issue, not a performance problem. The bank needed a high-performance culture shift. But how do you shift a culture entrenched in old ways? Below is how we supported the bank’s transformation into a high-performance organisation.

Step 1: Start with leadership alignment

The first step was to get the leadership on the same page. Culture starts at the top. The CEO and senior leaders must model the behaviours they want to see. We ran a culture diagnostic that involved interviews with senior executives and middle managers. It was brutal but honest. The leadership was out of touch. We organized a leadership retreat to address the gaps head-on. We discussed vulnerability, transparency, and leading by example. This wasn’t a “tick the box” session. It was uncomfortable but necessary. As part of the review, we identified the different leadership orientations.

A similar approach was taken when I consulted for a large manufacturing firm. The leadership team was notorious for top-down decision-making, and workers felt unappreciated. We started by facilitating open forums between leadership and line workers. These candid discussions allowed senior leaders to connect with employees and understand their daily frustrations.

Step 2: Empower middle managers

Once leadership is aligned, the next step is to empower middle managers. These are the people who drive daily operations. If they don’t buy into the new culture, nothing will change. In the bank’s case, middle managers were stuck in a “command and control” mindset. We rolled out tailored coaching sessions focused on empowerment and decision-making.

We introduced a peer-learning model where managers shared successes and failures. This was transformative. It broke down silos and allowed managers to see the bigger picture. We also implemented quick-win projects where managers led teams to solve small operational issues. These small wins built confidence and showed that change was possible.

In a retail SME, I worked with, the owner was doing everything and micromanaging staff. After training the supervisors on empowerment and delegation, we saw a massive shift in how teams operated. Tasks were done faster, and accountability improved.

Step 3: Reinforce new behaviours with recognition

 The final step is reinforcing new behaviours. In the bank, we introduced a simple recognition system that celebrated employees who embodied the new culture. Every week, team leaders nominated individuals who went above and beyond, showing initiative or teamwork. Rewards were simple, certificates, shout-outs in town hall meetings, and small bonuses, but they worked. Over time, people started noticing that the bank was recognizing and rewarding the right behaviours.

In the manufacturing company, we developed a recognition system for innovation. Employees who suggested process improvements that led to savings or efficiency got both financial rewards and public recognition.

Results

Within a year, the bank’s culture transformation was noticeable:

  1. Customer satisfactionincreased by 12%, driven by more engaged frontline staff.
  2. Employee turnoverdropped to 10%, as employees felt more valued and empowered.
  3. Profitabilityimproved by 8%, thanks to more proactive teams and a collaborative leadership approach.

These changes were not overnight. But by following these three steps, aligning leadership, empowering middle managers, and recognizing new behaviours, the bank turned its culture around. Similar transformations were seen in the manufacturing company and the SME I worked with.

Culture transformation is challenging, but it’s achievable with deliberate effort. Whether you’re in banking, manufacturing, or an SME, these steps are practical and effective. Start with leadership alignment, empower middle managers, and reinforce the right behaviours. It’s the simple, actionable steps that bring real change.

Peter Drucker is quoted to have said “culture eats strategy for breakfast”, and he was on point.  Make sure your culture is strong enough to support your strategy.

All rights reserved. Summit Consulting Ltd. 2024

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