I consider myself a manager specialised in the banking sector. And therefore, I believe that business schools have a huge role in fostering people’s development in terms of leadership, in terms of seeing the bigger picture, in terms of strategy, which people do not learn in their roles in the companies.
Focusing on the customer
Well, my vision for Lloyds is that Lloyds be like it was a few years ago – a UK-focused bank focused as well on retail and SMEs, not on investment banking or international areas, and that [it] becomes a simple bank with low risk and absolutely focused on its customers. Banks in the past have lost sight of their basic function, which is to be focused on their customers. And together with that, they became more lax in terms of risk, and they have not addressed the high cost bases that they have built over the years and of several acquisitions. And that’s exactly what we are trying to change at Lloyds. So we are absolutely customer-focused. We are simplifying the bank, from the customer’s point of view, in order to create cost savings, which we can share with the customers and, therefore, offer them better value for money, which is what any company does in any other sector.
A bank more than any other company, given the strong link between a bank and the communities in which it operates, has a very special responsibility for their communities. And in the UK in particular, given the support that banks received from taxpayers, the responsibility is even higher. And I do believe that a strong economy requires a healthy banking sector, and a healthy banking sector requires a strong economy. So both futures are inextricably linked. And Lloyds – as the largest bank in UK, retail and commercial banking – has a special responsibility in that regard.
The importance of communication during change
Communication is critical. I mean, you may communicate a lot and people will always think that you are communicating less than you should. And when you are on a turnaround situation, you even have to communicate more because things are changing. Everything is new, and people normally – they don’t like change. People don’t like to change. It’s normal. We like a routine in our lives. So when you are changing a big company, you have to communicate even more.
That’s why I have immediately set up a big conference every year with 5,000 people in the bank. I do an off-site with the senior leaders three times a year. I do several town halls. I visit branches every month. I have breakfast with customers. And I am communicating all the time because it’s my function as the leader of the bank to tell them, especially in a moment of big change, where the direction is what progress has been made, what are the short-term targets. Very important for them to see and understand where the bank is going.
The very interesting thing about Lloyds’ challenges as you just put it – and that’s what attracted me a lot to Lloyds apart from the fact it was the largest bank in retail and SMEs in the UK – is the complexity of the task because we have had and still have different and conflicting priorities. And we have to manage the whole in such a way that the bank progresses, addressing all those priorities and the different stakeholders through time. And I’m very proud about the progress the bank has been making, but I don’t want to sound at all complacent as I said in my speech here at the University.
Driving down costs to provide value for money
We have a lot more to do. We still have to finish dealing with the end of our legacy issues, our non-core assets. We still have to implement our strategic plan to the end and get the last part of taxpayers’ money back in the near future. And at the same time, we are simplifying the bank – which is the core part of the plan – and relentlessly driving costs down in order to provide better value for money for people, which is the aim of what a commercial retail bank should do, which is day after day, client per client, product per product, providing better service and value for money for customers. So we are in the middle of a journey. We have come very far – probably quicker than we thought – but we are not complacent at all. And we’ll continue as a team to work relentlessly in this direction.
Leadership and teams
I think that in banking, and maybe contrarily to other sectors, the managers of the banks are people that came through the ranks, and from a technical career, from their success in their technical career, became managers. And I strongly believe that to lead the bank, like any other company, you should have management skills, and management competencies. And I myself do not consider myself exactly a banker. I consider myself a manager specialised in the banking sector. And therefore, I believe that business schools have a huge role in fostering people’s development in terms of leadership, in terms of seeing the bigger picture, in terms of strategy, which people do not learn other roles in the companies. And I am a strong believer that you should differentiate, as I told you, the technical career from the management career. And in the management career, in banks or in other companies, business schools – their role is absolutely crucial.
Well, the personal lesson is that this requires a relentless energy and drive in terms of communication and leading the bank through bad times in the same direction, leading all the team behind you, that you should not think that you can control everything. There are always factors beyond your control. So you can adopt a strategy sometimes in between, but you cannot go absolutely in a straight line. And the final one is that what you have to do – which I try to do all the time – is to attract the best talent with you and lead them by example, creating great teams because great teams is, in my opinion, the real, big competitive advantage that the bank can create as a service company for the sustainable future.