Noor Banks Culture Factor

In 2018, Noor Bank reported the largest percentage increase in total assets (18.9 per cent) as well as the highest percentage increase in net profit (62 per cent) amongst all banks in the GCC. To put this into perspective, the region's banking sector asset base grew by only five per cent whereas the second highest percentage increase for profit in 2018 was only 33 per cent. This momentum continued into 2019 with the bank recording a net profit of AED 410 million for H1 2019, which is a 29 per cent increase from the corresponding period last year, and 11 per cent more than the 2017 financial year.

Positioned as the ninth largest bank in the UAE in terms of assets and capital, these numbers speak volumes about the bank’s three-year transformation strategy which was designed and implemented by the leadership team in H2 2017.

John, what was the culture like when you joined Noor Bank in June 2017? What were your views on it at that time?

John Iossifidis (JI): Noor Bank's aspiration as well as its potential was well-recognised. Further, the bank opened its doors in January 2008 and had shown resilience in managing through the financial crisis which started when Lehman Brothers filed for bankruptcy in October 2008.

The same resilience was apparent in 2017, but I felt that a culture which embraces change was needed to unleash the potential of the people and the bank. The culture at that time was hierarchical, opaque and there was a fear of change.

The lack of a clear strategy, as well as the need for an identity and a purpose was holding the bank and its people back from realising its full potential. As a result, we designed a clear three-year transformation strategy, and engaged with colleagues to define the bank’s purpose and refresh the values to deliver the new strategy.

Why did you see the need for change? And, what culture did you envision for Noor Bank?

JI: The global banking industry is evolving at a rapid pace. The emergence of fintechs and the impact of digitalisation,data analytics and regulatory frameworks changed the banking landscape. As a result, the future of banking, along with the needs of our customers and our people is also changing.

This will require a different level of focus, thinking and execution by all of us. And for that reason, it was important to design and implement a three-year transformation strategy at the end of 2017 which placed our customers at the core, our people first, and technology at the forefront of everything we do. Our three-year plan reflects the fast-changing UAE landscape and consists of four strategic pillars:

• Delivering outstanding customer experiences;
• Empowering, enabling and engaging our people;
• Becoming simpler and more efficient through technology and analytics;
• Enabling outstanding growth through strong and proactive control functions.

To deliver against the four strategic pillars envisioned for Noor Bank, it was important to have less of a traditional old school banking culture, and 'to behave more like a technology company with a banking licence.' One which fully embraces present-day Islamic finance principles, underpinned by the highest standards of Shari’ah law.

Gail, do you therefore think there is a pressing need for culture transformation of banks across this region?

Gail Stanley (GS): Yes. However, I think this is a global phenomenon. In my previous roles at international and global banks, a need for culture transformation was already evident. Digitalisation, design thinking, data analytics, and agility are key elements in defining new ways of working, which demands culture change.

Only banks that can create and manage seamless customer experiences across any device, and transition from a silo to an omnichannel mentality will remain relevant, competitive and deliver sustainable financial results. And, delivering all of this will require banks to shift from the inherent ‘traditional old school banking culture’ that John referred to earlier.

Besides, culture and strategy have become interlinked. For too long, leaders have only focused on strategy to provide clarity and direction for their actions and decisions. Most leaders have a deep understanding of strategy but leave culture for their HR function to manage. They do not realise that culture can create a competitive advantage for their business.

Culture transformation needs to be approached—by design—it deals with how leaders can articulate, describe and outline the specific organisational behaviours required for people to deliver against the strategic objectives. If business leaders fail to recognise the most optimal culture dimensions that will drive the required actions and behaviours, they will only deliver mediocre results, and may even fail to deliver against their strategy.

Gerhard, how does culture then fall into Noor Bank’s overall plan?

Gerhard Strydom (GSY): Creating a new vision, mission and purpose, strengthened the three-year turnaround strategy and resulted in redefining the bank’s values. Building a strong culture was at the core of the bank’s transformation journey. The best way to explain how it all fits together is to visualise Noor Bank’s ecosystem as an onion with multiple concentric layers. 

Employee engagement forms the outer most layer of the bank’s onion-like culture ecosystem. We’ve implemented an interactive real-time platform to measure employee engagement that enables people and managers to interact with one another—branded internally as ‘Your Voice’. At the next level is the bank’s values. Each value comprises of clearly defined behaviours which provide us with the guiding principles for the way we think, act and interact with people and technology. The values and behaviours describe ‘how’ we need to behave to deliver against the bank’s four strategic pillars.

The next layer outlines the four strategic pillars and is the roadmap of ‘what’ needs to be done to achieve the key objectives mapped out in our strategy. The four strategic pillars (the what) are the building blocks of the bank’s change agenda, and the values (the how) are the instructions to put the building block together. The vision, mission and purpose round off the final layer, forming the underlying basis for the bank’s strategy and culture. Vision outlines ‘where’ the bank is heading, mission illustrates ‘what’ needs to be done and the purpose describes ‘why’ the bank exists. Putting these elements together gives meaning to our work.

With culture at the core, this ecosystem emphasises the methodical approach that we have adopted in designing the bank's culture.

John, the onion-like concentric layers explain how the bank’s strategy, culture and values all fit together, but as the CEO, what challenges did you face in implementing a new culture in the bank?

JI: Quoting Allan Murray, President of Forbes Magazine, he rightly said, “Changing a deep-rooted culture is the toughest task a leader will face.” Culture is a group phenomenon and it exists because of our shared values and behaviours in a group. As a starting point, the leadership team needed to first understand what it looks and feels like ‘to behave more like a technology company with a banking licence.’ For example, we took the leadership team and the culture squad to a technology company to experience the work culture.

As Gail mentioned, culture and leadership are inextricably linked, and culture transformation must start from the top. The leadership team had to drive and demonstrate the new ways of working, thinking and interacting throughout the organisation.And, the fear of change is something that could have held us back. A wider extended leadership team was established— known as 'League 2020'—to equip leaders with the skills and knowledge to create a change driven culture.

Have you seen any direct impact on performance as a result of the bank’s culture transformation journey?

JI: Over the past 24 months, Noor Bank has won various awards. This external validation shows that we are well underway in achieving our vision—to be recognised as the world’s best contemporary Shari’ah compliant bank. As Gail has mentioned, in today’s fast-paced banking sector—with digitalisation, design thinking and data analytics—it’s not uncommon to see organisations pledging to be innovative, agile, collaborative and customer-centric.

While Noor Bank is built on similar beliefs, I have recently asked myself, what sets us apart?

Our transformation journey has many ingredients. We developed a clear vision and strategic intent which delivered a first-class tech stack; we continued innovating with fintechs inside and outside the bank; we created a learning academy with the latest technology, and we adopted a market-leading approach to map customer journeys.

Our financial performance speaks volumes, and our employee engagement scores are strong. However, the real differentiator for me is the work we have done on our culture and bringing our values to life. I believe our culture is the glue to the building blocks and the one thing that makes us unique.

Over the last two years, our culture transformation has been intentional, systematic and meaningful, leading us on the path of excellence by showcasing the true spirit of collaboration. My leadership team and I are proud of the approach we have adopted, and credit goes to the culture squad and our people for truly embracing change.

 Gerhard, culture reform seems to be the solution for all business problems and can create success; therefore, how can culture be fixed in an organisation?

GSY: One can only wish it was that easy. It has become fashionable to propose culture transformation as a solution for anything that goes wrong in an organisation these days. News headlines and the importance of culture in shaping an organisation’s reputation, and ultimately its success also propelled into the public conversation. Culture change happens when you push or pull specific culture levers to confront tough business challenges.

Organisations are complex systems with many dynamics, energy and information flows. Every organisation needs to take a different approach to get the desired result to tackle its business challenges through culture change. An organisation consists of autonomous culture dimensions. We had to identify the dimensions as well as the culture levers to push and pull, to achieve our desired optimal culture, aligning with our three-year transformation strategy. So, to answer your question, one cannot fix culture. Let me explain by using a specific example:

• Business Challenge; Enable, engage, and empower people to design and deliver innovative digital products and solutions for customers. 
• Culture Lever Pulled; We encouraged colleagues to expand their knowledge and provided them with a safe environment for experimentation and innovation. Additionally, we created a real-time employee engagement platform for managers to interact with their teams— 'Your Voice'.
• Culture Change; This resulted in a shift from strict hierarchical management to a more collaborative, flexible, and dynamic style of working which allowed for better work-life balance and stimulated innovation which allowed people to bring their whole selves to work.

However, on the flip side, for the culture change to be successful, there are also culture levers to be pushed. Flexibility, freedom to experiment, and the opportunity to innovate come with a great deal of accountability, responsibility and self-discipline. A culture of experimentation and innovation tolerates failure but not incompetence. It fosters collaboration but only when individuals take accountability.

Gerhard, what was the bank's approach to execute the culture transformation programme?

GSY: The bank made the decision not to engage a managing consulting practise to design, deliver and implement our culture transformation because leaders and the people within the bank needed to own the culture as well as the transformation thereof. Therefore, we were looking for the best organisational culture framework to support our culture journey. There are several market-leading organisational culture models supported with evidence-based research to help organisations with their culture change initiatives. We did our research and shortlisted the best three to support the bank’s culture transformation journey.

Our initial approach consisted of training and certifying 12 leaders across the bank, referred to as the culture squad, on the dynamics of oragnisational and national culture. The certification was facilitated by Hofstede Insights. The UAE, being home to over 200 nationalities from different national cultures and backgrounds, we needed a strategy that included an extensive research on national culture and how values from different nationalities influence the workplace. We needed to bridge the gap between national culture and organisational culture. We also required an advanced level of analytics in this process as it is essential in any culture transformation to measure the existing organisational culture.

Gail, from your perspective, what are the most critical elements to implement a successful culture transformation?

GS: John has already mentioned the important role leadership plays in shaping the culture within an organisation, and Gerhard spoke about our culture squad. We’ve also touched on how important it is to have a clearly defined strategy. But, the third most important element in a successful culture transformation is communication.

Culture transformation will only be successful if the intent is communicated in the right way. We’ve developed a robust communication plan to engage people throughout the culture transformation journey. As culture continuously evolves, culture transformation never ends. Also, in addition to Gerhard’s points, the following processes were essential to the journey:

• Measure current culture—we obtained a deep understanding of the actual culture across the bank; Define optimal culture—we charted out what the optimal culture should look and feel like to execute the bank’s three-year transformation strategy;
• GAP analysis—identify the gaps between the actual culture and the optimal culture and recognise factors which will enable or hinder our strategy;
• Implement change—apply the analytics and tools to implement change.

John, what has been the most notable changes across Noor Bank as a direct result of the culture transformation journey?

JI: We’ve created a purpose and values-driven organisation which gives everyone a sense of meaning to their work. Our people have become energised and committed to the bank’s three-year transformation strategy, and that manifested into high performance.

We’ve delivered strong financial results. As we’ve already mentioned, in 2018, Noor Bank produced the largest percentage increase in total assets and the highest percentage increase in profit across all banks in the GCC region. Besides, some of the symbolic initiatives to demonstrate culture transformation are:

• Breaking down walls—to create an atmosphere of transparency and collaboration, we broke down walls between functional and business areas within regulatory requirements;
• Flexible working—our people are provided with the work life balance they need to thrive at their work;
• Creating break-out areas—to create an atmosphere of agility and innovation;
• Retiring dress code policy—our people are trusted to dress depending on their calendar and agenda for the day rather than rely on a prescribed dress code policy;
• Retiring office policy—the requirement for a dedicated office is no longer determined by position or seniority in the bank;
• And most importantly, our employee engagement shifted from the bottom quartile to the top quartile in 18 months.

Gail, how would you describe Noor Bank’s new culture?

GS: Noor is now an organisation where colleagues are encouraged to expand their knowledge base and are provided with a safe environment to experiment and innovate. We emphasise on building meaningful relationships rather than merely selling to the customer, with a focus on creating efficiencies through automation. We strive to continually design a workplace where colleagues look forward to coming into work and allow for flexible working, therefore creating a better work-life balance for our people.