Lloyds Banking Group has recently unveiled its Helping Britain Prosper Plan which represents several firsts. As part of the British banking institution’s 2013 Responsible Business report, it is forward facing as well as backwards looking and was launched at the same time as the group’s annual report, demonstrating a true alignment with the bank’s corporate strategy.
The Plan itself sets out seven public commitments with 26 measurable metrics or key performance indicators (KPIs).
The Group believes it is the first bank to measure its economic and social impact in this way.
The seven commitments are:
- To help more customers get onto the housing ladder (and help more customers climb up it)
- To help its customers plan and save for later life
- To take a lead in financial inclusion to enable all individuals to access, and benefit from, the products and services they need to make the most of their money
- To help businesses to start up and scale up, and to procure responsibly
- To help businesses and individuals succeed with expert mentoring and training
- To be the bank that brings communities closer together to help them thrive
- To better represent the diversity of its customer base and its communities at all levels of the Group
So why has Lloyds Banking Group come up with this Plan now? Graham Lindsay, Director, Responsible Business for the Group , says that whilst the Plan itself is new, the fundamental core of the Plan is actually what the bank believes it has stood for since it was established over 320 years ago. However, making the Plan public ensures the bank will be held to account. In banking terms – what gets measured – get done. And the Plan provides a common purpose – an aspirational goal that will drive everyone to make even more of a difference and truly endeavour to “punch above its weight”.
“We know people across the UK – be it customers, colleagues, any of our stakeholders – are facing big issues today. Not only does the Plan give us a platform to illustrate the key role we believe we play in helping Britain prosper, it also holds us to account to address these issues,” Lindsay explains.
Lloyds Banking Group says it is committed to helping Britain prosper. Its drive to contribute to Britain’s economic and social success is a key and long held component within its corporate DNA. At the same time, it’s a business that seeks to deliver a good return for its shareholders – and given that its strategy is focused almost entirely on Britain – it makes sense to invest in supporting helping Britain to prosper. The bank also does not shy away from the fact that following the financial crash of 2008, it wants to help people regain trust in its brands and, indeed, the financial services sector.
António Horta-Osório, chief executive of Lloyds Banking Group, was a key influencer behind the Plan and recently told a business audience: “Rebuilding a sound reputation founded on the highest standards of responsible behaviour is key to the industry’s long-term success. But words alone are not enough to change public perception and regain trust. We must be able to provide meaningful commitments and allow ourselves to be independently measured against those. I believe our Helping Britain Prosper Plan measures, the first of their kind, can help deliver a positive step-change in regaining positive public sentiment and trust in our industry.”
And to those wondering if some of the proposed commitments – lending to first time buyers for example – are what banks are meant to be doing regardless, Lindsay responds: “No. This is not simply business as usual. What we’re saying is that we can do so much more. We know that by providing such specific focus we can and will turn up the dial. We believe the Plan has the ability to make a real and lasting difference within the UK. This is because we are making public and linking seven separate and significant commitments that have the ability to drive a step-change to the prosperity of the UK. And these metrics will be independently audited to prove that the Plan is working. In short – we are being held to account in the most public of ways.”
To formulate the plan’s metrics the Group engaged the services of EY. “We used a number of external indexes including the Legatum Prosperity Index, the Organisation for Economic Co-operation and Development Better Life Index and Sustainable Development Commission Quality of Life Indicators and consulted with all our stakeholders including our independent stakeholder panel,” explains Lindsay. “When putting them together they had to answer the question: how is that helping Britain to prosper?”
Lindsay gives the example of how while the bank does a huge amount of work on reducing the number of customer complaints (per ‘000 accounts), to set a metric measuring those complaints within the Plan does not link to demonstrating how the Group is helping Britain prosper. “There are more positive ways to show this,” says Lindsay. “For example, our aspiration for 40% of our 8,000 senior roles to be women.”
Doug Johnston a partner in EY’s sustainability team agrees: “An important piece of work at the outset was to define ‘to prosper’ and the dimensions of to prosper where Lloyds Banking Group could make a material difference.”
The next phase was to work with the Group to identify which activities contributed most to ‘to prosper’ and what measures could be used to measure progress. “Another important part of the work was to look at what others in the financial sector were disclosing,” explains Johnston. “Most were reporting inputs on activities but much less about outputs and outcomes. Lloyds Banking Group’s Plan differs because of its breadth and how it applies the Plan.”
A number of KPIs (metrics) resulted from this research and were entered into a consultation process. “The KPIs needed to resonate externally,” says Johnston. “It was also another way of developing the metrics.” Indeed, many of the KPIs were input based and Johnston says that “thinking and working with the activities to measure the outputs was a challenge”. An additional challenge was also keeping the organisation focused on the ‘to prosper’ aspect.
Johnston is excited by the fact that the Plan is “owned by the senior leadership team who will be fully held to account to deliver their individual components. This ensures the Plan is fully embedded and shapes the overall strategy of the business.”
Lindsay agrees that senior executive buy-in is what makes the plan so ambitious, the commitments so bold. “This is not a bolt on to our strategy. Our Prosper Plan is, in fact, the Group’s business strategy. ”
EY will continue to work with the Group’s team to refine the plan and build on its definition. The plan will evolve. “Although the seven areas of commitment are unlikely to change, the targets that sit beneath them might, in line with business direction and market changes,” says Lindsay. “Whilst it is clearly our urgent ambition, and aspiration, I can’t promise we’ll deliver all 26 by 2020. However all seven commitments have been built with the knowledge that these are the areas where we can make the biggest impact and influence the most change. They are wholly appropriate commitments and we can make a huge difference in all of them. It’s the specifics that are key. We’re just being bold enough to say ‘here’s what matters’.”