The recent revelation of the issues enveloping Westpac Banking Corporation® provides an opportunity to learn and understand the importance of alignment of any organisations seven core enablers- Strategy, Structures, Technology, Process, People, Information and Governance.

It has been my experience over many years of helping organisations to optimise and transform that these seven core elements need to be synchronised to achieve strategically aligned performance. Why do we need alignment? One very good reason – to build and evolve a sound operational core for the organisation.

Westpac® is now paying a hefty price for not taking advantage of, and effectively managing, the power of alignment. The fallout has been and will be considerable. The CEO and Chairman have been replaced, substantial fines will be issued for lack of regulatory compliance, brand and reputation have taken a hit, shareholders are dissatisfied and its internal teams are no doubt wondering how they recover.

The recent rating of Westpac® by Global Finance magazine as being the number 3 on the world’s safest bank list for Australasia, and rated number 16 of 50 on the safest commercial banks list has been somewhat overshadowed by something that was potentially avoidable.

Yet, Westpac® is not an isolated case of poor alignment. I see a lack of alignment within organisations of all sizes all the time.

So let’s look at where things went wrong for Westpac® as I see it.

Strategy

One of the strategic objectives of Westpac® was structural efficiency.  It may have been efficient but it certainly wasn’t effective. Strategy execution is effective when all activities, initiatives and projects are visible, managed and appropriately governed from the Board to service delivery.

Structures

Given that the current structures which comprised a Board of Directors, Board Committees, an Executive Team, Functional Team Leads, and Operational Teams the organisational structure failed to provide a mechanism to effectively align strategy execution to the specific activities and regulatory requirements of the organisation. Accountabilities and responsibilities were perhaps not as clearly understood and managed as they should have been.

Technology

Technology is one of the organisations key enablers. According to recent media reports, changes were made to legacy systems and new systems introduced that led to configuration issues. In 2016 a new application was introduced and the team failed to apply an additional piece of software that would help identify “child exploitation typology”. Surely given the importance of regulation compliance, this would have been on the test list prior to systems being released for use?

It seems that technology was seen as the path to operational improvement, and it can be, however no organisation can keep adding new technologies and ways of working and just hope for the best that it works. Given the number of organisations that are implementing or planning to implement technologies such as process automation, robotics and artificial intelligence this is one lesson we should take to the bank.

Process

In the majority of organisations, each core element or functional area has an associated set of business processes that define how things get done. In the Westpac® case it raises several questions relating to transparency and silo based activities.

People

High levels of IT staff turnover was reported to be an issue within the organisation. This resulted in poor systems knowledge. How well is the enterprise architecture defined and understood?

Information

According to recent reports, 23 million breaches of reporting requirements were identified. Where was the information management plan?

Governance

This for me is the biggest area of concern, as a Board Committee and specific Executives were responsible for ensuring that an effective governance framework was in place. Governance processes were obviously broken.

Westpac® needs alignment now more than ever, especially given the activities they are undertaking as part of the published response plan.

The issues Westpac® are working through raises a timely reminder for all businesses, regardless of size, industry or complexity, that it’s never too late to start aligning your 7 core enablers.

If you want to know more, request a copy of the realising-potential The Power of Alignment paper from info@realisingpotential.com.au, or contact me to discuss how I can help you get effective alignment happening.