Change in business is vital for success, but a shift in thinking can be a difficult proposition when one man has run a business for almost 50 years. When Martin Barrett took over CEO duties from Wide Bay Australia founder and Managing Director Ron Hancock, who had been leading the way since 1966, he had some big shoes to fill. Yet he has been quick to implement change and transition the bank into the 21st century.
The problem with change is that there are casualties. And the question for the incumbent is how to minimize the casualties. For Martin, who has been in the position for just over six months, it was about assessing capabilities.
“Despite the very significant successes, mergers, acquisitions that Wide Bay has had over the years, probably the last couple of years have been quite challenging,” Martin says. “It’s required me to come in and very quickly define what the strategy for Wide Bay will be over the course ahead. And I guess in that regard, I’ve needed to steer into the capabilities of the business. I’ve needed to steer into the capabilities of the people. I’ve needed to look at our product offerings. I’ve needed to look at our positioning in the market place. I’ve needed to look at particular segments that we had not perhaps taken advantage of and really look across the whole opportunity.”
In the first six months, Martin has made some difficult decisions based on the challenges he mentions above. One decision was to write down an entire investment to avoid any surprises that may rise in this financial year or years ahead. That, however, is tempered by the new products he is launching. The first was the introduction of a personal loan.
“What we were seeing was some of our younger customers, ages eighteen, nineteen through to about twenty-two, come to Wide Bay for a personal loan and when they couldn’t get one go somewhere else and we would lose that client.
“So we plugged that gap and we put personal loans in place. We’ve been able to do that very quickly and quite successfully in the sense of winning new business in that particular space.”
Another problem was a lack of IT sensibility. Most banking is now mobile. It can be done via tablets and pads; it is instant.
“We looked across our IT relevance and our ability to be able to appeal to the new age; those banking on tablets and on phones and so forth,” Martin says. “We now have a mobile app in the market place that fills that particular hole for us.”
Martin also needed to integrate new products into the core demographic – the area he sees as having the most brand awareness. Building the core demographic was one of his predecessor’s greatest successes.
In fact Wide Bay has a long history in that area of Queensland, which stretches from Mackay to the Sunshine Coast. Its footprint is impressive. A brief history shows that Wide Bay Australia has its roots in several regional Queensland-based building societies that were created to provide low-deposit home loans and needed competition to the banks.
Initially, Ron was the founder of the Burnett Permanent Building Society. He says, “As we obtained funds, we had a queue a mile long of local people trying to get into a house on 10% deposit – it hadn’t been heard of before. As $10,000 or $20,000 was invested we were able to take some more loan applications and it just kept on growing from there.”
In 1979 Burnett Permanent merged with the local Maryborough Permanent Building Society to form Wide Bay Capricorn Building Society. Two years later Wide Bay Capricorn amalgamated with the Gympie and North Coast Building Society. Another merger occurred with the Gladstone-based Port Curtis Building Society.
In 2008, Wide Bay Australia took over the ASX listed Mackay Permanent Building Society Limited.
Wide Bay also has strong presence in Melbourne and Sydney, but it is Queensland that is key and Martin wants to further consolidate Wide Bay’s reputation in this region.
“We’ll be commencing business banking from October this year. So we are underway with building the credit policies, processes and interviewing business banking managers.”
It is no surprise that Martin has been busy; he’s an experienced executive who understands the need to move forward. He came to Wide Bay after holding the position of state manager for St. George Queensland and West Australia and previously held roles at regional financial institutions in the UK and at National Australia Bank.
Martin’s history has taught him a great deal.
“I’ve understood that in business banking there is a golden level of opportunity for organisations outside the big banks. Many of the smaller business banking customers get lost in a big sea as the banks manage the small and medium sized businesses to a cost. They’ll load up business bankers with potentially three hundred or four hundred customers, which also really means the relationship tends to be quite loose and they’re very reactive. Clients then find themselves having to go through long processes of call centres because they find it difficult to talk to someone to take care of their particular affairs. So I think an organisation like Wide Bay has a real opportunity to put in place a much stronger service and relationship model and can be very profitable.”
The retail client will also be given the same levels of service as the business clientele. Wide Bay is extremely proactive when it comes to community engagement.
“We spend more money on sponsorships and donations than probably all the banks combined in that particular region,” Martin says. “I was calculating the other day over the course of the last three years, we’ve spent in excess of $1.2M on donations, sponsorships, support to clubs, events, which is a fair amount of contribution to the local region. So we can leverage that better, but we also need to focus on our relevance.”
What Martin means by that is that Building Societies are the long lost relative of the bank and the understanding of their purpose among communities has waned. Martin expects the conversion to be complete by the end of this calendar year or early into 2014.
This will raise further issues around brand, but Martin believes that by balancing the culture of the Building Society, including personal engagement and community connection with the services that a bank can provide, then Wide Bay will possess the perfect service offering for the region.
“There is a need to be a little bit sharper, in the sense of our ability to be able to identify what our customers want and not be shy to actually provide services and products that we offer to those particular customers. We can realistically grow market share in this region. We offer more distribution points, we employ more people, and we have strong brand awareness and a very strong community link across this particular region. We also have a very good reputation. So, in that core region, there’s no reason why we cannot compete very strongly with all the other financial institutions including the big boys.”
As far as Wide Bay’s other distribution centres are concerned from Townsville and Cairns, down to Brisbane and the Gold Coast, there needs to be a bit more disruption to grow the brand. Martin feels there should be a particular focus on winning customers across the business-banking field, but mostly winning clients in the home lending sector.
Outside of Queensland in Sydney and Melbourne the focus is on broker distribution networks.
“We’ll be improving our offering to brokers; well be improving the ease of brokers to do deals and we’ll be looking to win more quality opportunities from our broker network for the cities of Sydney and Melbourne and to a degree, Brisbane.”
Supply chain and stable partnership is also a priority. Wide Bay has a number of partners including product partners, service partners and advice partners, ranging from insurance suppliers Allianz, through to organisations like travel expert providers with foreign exchange capability, lawyers and brokers among others.
“I’ve actually appointed a leader who looks after the broker channel and the strategic partners. So that’s a matter of regular conversation with those partners, setting joint targets and meeting their expectations. And that’s proven to be very positive over the course of the last few months. We’ve certainly gained more support as a result of it. And I think there’s been far more clarity in terms of the expectations our partners have and the expectations that we have.”
Wide Bay holds 15 key relationships, with a further 20 that Martin considers important and has regular contact with in terms of how to support each other. String relationships have been critical in the success of Wide Bay throughout its history and Martin understands the value of strong relationships.
“Effectively our money is the same colour and does the same thing as anyone else’s. So, really what you have is your service proposition and you have your relationship proposition and those elements I hold out as being absolutely critical.”
They will be even more critical as Martin transitions Wide Bay into the bank landscape and gets the business banking capability up and running.
“We’re embarking upon a branch revitalisation program so we’re selecting our top 12 branches by customer and by opportunity and we’re going to be completely revamping the look, feel, functionality and attractiveness of those particular branches. Again, this is to make us current and relevant for the customer of today. Our new website will reflect our front door and give people a sense of who we are and what we offer. And, that is the same for all businesses. People will gauge your service level on the ease of navigation and the functionality provided by that particular website.”
Essentially this move forward is about brand recognition and making people aware of what can be expected from Wide Bay as an alternative banking institution.
In six months Martin has done so much, not least revamp the entire business model. His entry into Wide Bay is a study in change management and getting the best out of your product, service offering, community relationship and brand. Some CEOs may say that this is the only way to push a 50-year-old company into the modern era.