HR's role in ethical banking at Coventry Building Society
Jenny Roper, November 26, 2018
‘The Cov's’ HRD Lucy Becque says the organisation is the most ethical place she’s worked, and the HR team plays a major part in that
Around three weeks into her new role as HR director of Coventry Building Society Becque wondered – for a split second – if she’d made a horrible mistake. The finance director was delivering the financial results for the year, proudly announcing that the society had achieved the lowest margin in the sector.
“I thought: I’m no accountant but even I know that’s not a good thing,” says Becque, whose past roles include HR director at Deutsche Bank and head of HR at Baker Tilly. But she quickly realised things work quite differently at ‘the Cov’ (as it’s fondly known by locals and longstanding customers). While most more conventional financial services firms would shudder at such a result, ‘profit’ isn’t one of the building society’s 20 strategic measures (community, its net promoter score [NPS] and employee engagement are).
“He [the FD] said ‘we have the lowest margins in the sector because we pay savings rates that are the most we can pay’,” Becque recollects. “He said ‘we could absolutely drive better profit by lowering savings rates and charging more to our customers, but that’s not what we’re about’.”
Which all goes back to the Society’s founding ethos. “The principles are literally unchanged since 1884 [when it was founded],” reports Becque.
The organisation is now the UK’s second-largest building society, employing 2,500 people across its head offices in Coventry and 70 branches across the West Midlands, the South West, Wales and as far north as Sheffield. But it’s never diversified into more complicated products or rates. And the aim of doing ‘the right thing’ by members remains.
“Not that long later I was in an operational risk committee and we were discussing a customer who’d been subject to fraud,” reports Becque. “There was discussion of terms and conditions and that we weren’t required to cover this. But then it was: ‘what would our members expect us to do? They’d expect us to cover it. OK then we should.’
“So debates tend to be around: if we do something special the whole membership needs to fund that. It’s more: how do we make sure we don’t do something for a small group that negatively affects other members? Not what will it cost us? That has been quite a shift for me.”
The new job presented a series of such revelations. Not least that the aforementioned ethos of keeping members front and centre really does drive everything.
“I went through a long process to join the Society, meeting all of the executive team and lots of other people,” Becque recounts. “I can remember sitting with Mark [Parsons, the CEO] and him saying ‘we’re not like other organisations; the values absolutely drive everything’. I sat there thinking ‘everyone says that.’ And in my experience there’s always at least some disconnect.
“So I guess I spent the first six months looking for evidence of that gap. But I gave up in the end; there were just so many proof points.”
Becque also quickly discovered that things were not quite as they seemed in HR. She was greeted by what felt like a disproportionately large team – several of whom had been there for 30-plus years – and by very manual outdated HR processes.
“I came in and thought: that’s ridiculous, what are all these people doing?” Becque remembers. “My head of L&D Ray now has 32 years’ service and Tina my business manager has 42. My thinking coming in was ‘are they just waiting for retirement?’”
But Becque soon realised there was some fantastic work going on, and that she needed to protect this: “I’m now clinging to their [her long-servers’] ankles saying ‘don’t ever leave me!’ They have such passion for what they do.”
And she realised that the team did need to be sizeable to retain the rigour with which customer-facing staff are trained. “There’s now 65 in my team and that is big compared to other organisations… But the biggest slug are in operational training – that’s 20 people,” she says. “In the contact centres for example someone will do four to five weeks’ training before they take a phone call. That’s a massive investment but the results are worth it: customer complaints are very low and our NPS score is right up there.”
It was a similar story with engagement. “When I came in and looked at what existed, engagement was in the early-80s,” reports Becque. “So while the people proposition was such that any HR professional would say ‘this is missing, that’s not there’, when you dug beneath the surface people loved working here and were staying here. All those questions around integrity of purpose were off the charts. So it was: how do you build a wall around all of those amazing things?”
Becque set to work updating the things that by contrast weren’t fit for purpose, moving away from performance management as just a paper form, and away from Excel spreadsheets to recruit 300 external hires a year, for example.
“There was a big bit of putting in some infrastructure. Then we went through exit interviews and asked: why are you leaving? And it was always career progression. It was relatively junior people who we absolutely had a next role for. So we did a big piece around internal mobility.
“We gave people training on interview skills, how to sit the psychometrics we do… I think if we’ve not got someone’s next role our support shouldn’t stop there. Because then they leave as a massive friend of the Society.”
Most crucially this involved upskilling managers to have the right conversations with reports. (“When I asked about leadership and management training there was literally nothing,” reports Becque.)
The importance of this became apparent when internal vacancies were advertised more proactively and it was nearly all men who applied – a phenomenon that repeated itself when a Managing People For The First Time course was launched.“We had to have conversations with line managers to say: ‘what discussion are you having with this woman to say she’s brilliant, she’s got all the skills and needs to get herself on the programme and you’ll support her through it?’” says Becque.
She adds: “We had a big chunk of work to do on the management and leadership development side, because everything I looked at that I wanted to do, whether D&I, talent, succession… it all comes down to that.”
In both instances the HR team managed to “totally turn around” the gender balance of applications by also creating more informal routes for expressing interest. “We launched career fairs and drop-in sessions that de-risked the process of applying for women,” says Becque.
Line managers are now skilled in having conversations around their teams’ career aspirations – or just as importantly lack thereof, reports Becque. She recounts a situation in a previous role where a boss had just assumed she’d want “the next big job”, when actually at the time her priority was to see her children more.
“Years ago I worked with someone who said: ‘you need two types of people. You need twinkling stars and shooting stars’. And I’ve really kept that,” she adds. “Shooting stars will go through the ranks and are your top talent. But your twinkling stars are those who are amazing at what they do. They’re the person you go to with an issue, who you sit a new person alongside.”
Internal mobility now runs at around 42% (up from in the 20s when Becque arrived). And the organisation is making great strides in D&I, with the number of women in the tech side of the business for example sitting at 24% (the industry average is 17%), and the percentage of BAME employees up from 10% to 17%.
There’s always more work to do though, says Becque, adding that it’s been crucial over the past three years to be pragmatic about what to focus on when. “Gender and BAME have been the focus. We’ve just added disability because we think we’re ready to expand,” says Becque. “Everything is important but if you’re going to do it you’ve got to do it well.”
She adds that disability in particular presents unique challenges for different individuals, meaning the area requires in-depth, dedicated focus. “One of the things we’ve been told previously is that someone’s manager will be brilliant but then they’ll leave,” she adds. “So it’s: how do you build some information about someone that transfers with them so they don’t have to re-educate a new manager?”
Tracking the data has been crucial, adds Becque. “We spent the first year when I joined talking about D&I and why this was important. Then when we looked at the metrics nothing had moved. So we felt happier about it and the opinion survey had moved, but actually we weren’t employing more senior women or BAME individuals.”
A pragmatic approach around what can be tackled when has also been key to the wider HR piece: “There was a lot I had to ignore for the first couple of years because we couldn’t get to it. We knew our external website wasn’t great but we hadn’t got an employee value proposition (EVP). How do you build a website without an EVP?”
Currently on the agenda is a big push on wellbeing, along with flexible working and more support for carers, including three extra paid days off if needed. The biggest current focus though is supporting the Society through an inevitable shift towards online banking. “There’s supporting people with the technical training aspect of that. But there’s also a piece around how we feel ‘change-ready’ culturally,” says Becque.
“Because a big part of the Cov is around being quite humble and expecting people to judge us on what we do… So we need to help build confidence to be a bit bolder, and to say this is stuff we do all the time and we’ll manage it really well. We’ve spent a big chunk of time with our leaders looking at how they talk about this and asking: ‘when people look at you what sense do they get? Do they sense you’re overwhelmed?’”
At the heart of all of this change, however, remains a critical commitment to face-to-face customer service, reports Becque. The new branch design currently being rolled out focuses not on self-service but on customer interaction. “That is very contrary to the rest of the market. But the feeling is that if someone wants self-service they’ll go online. If they’ve gone to a branch it’s because they want a human being to help them with something.”
In line with this customer-first approach there are no financial targets linked to bonuses. “Savings balances have grown quicker without targets because it enables people to do the right thing,” says Becque. “There are loads of cases where someone will come in and the branch advisor says Halifax has a better account for them.”
Which is an approach that won’t be for everyone, particularly perhaps some senior leaders. “I’ve done a big chunk of board recruitment here and I’ve met some people who looked amazing on paper and had the right skillsets, but just didn’t have the right values,” reports Becque. “Because their focus was on maximising profit at all cost.”
Focusing beyond profit is only going to come even more into its own in future, feels Becque. Mutuals actually benefited from the banking crisis and will continue to benefit from increased desire among consumers and employees to work with organisations they trust, she says.
She adds that she might now find it difficult to go back to more conventional banking. “The organisation existing purely for good isn’t something I’ve had in any other business, and I’ve never missed it,” she says. “It wasn’t something I felt was lacking in my career. But having done it I think I’d really struggle to give that up.”