With 39 branches around Australia, 33 of which are situated on defence force bases, Defence Bank is in a perfect position to offer services that cater to the Australian Defence Force. CEO David Marshall considers the Bank’s responsibility a “unique, privileged commission that we don’t take for granted”.
Having brought more than three decades of financial sector experience to the role, David now leads a bank that’s seeing a steady annual growth of more than 10%.
The CEO Magazine: You’ve worked in banking for more than 30 years. What do you like most about the sector?
David: I love dealing with members. I also love seeing organisations evolve and change through different points in a cycle. It’s great to see people be challenged by those dimensions and to work through those challenges as organisations evolve due to either economic, regulatory, political or socio-demographic cycles or shifts. I’ve had the opportunity to be a part of that for a long time.
Looking back over your career, what would you say has been your greatest achievement?
Successfully transforming small and large organisations. Also, bringing people along for the journey and always trying to keep our members and what they want at the centre of our operation. I’m proud that through our services at Defence Bank we can reduce the effort that customers expend when they’re doing their banking. We have a relentless focus on reducing member effort.
What’s an example of that, where you’ve helped transform an institution that was in a difficult environment?
If I go back to one that resonates with me the most, it would probably be when I was at Westpac. In the late 1980s and early 1990s, Westpac came close to insolvency. It was a real crisis. Throughout that period, we had to address the business model and costs and create a sustainable business to come out the back of that. I had numerous roles at various levels during that time to contribute to that significant turnaround.
Conversely, what would you say has been the greatest challenge of your career?
Managing stakeholders. When you’re a CEO, you have a large, broad group of stakeholders and drivers that can determine your success or failure. That can be economic, regulatory or community expectations. It can also be technological change. Some of those things you can’t control.
What advice would you offer other business leaders trying to manage their stakeholders?
Make everything a conversation. Don’t send off fiery emails, just bring everybody in. Be known as an organisation that’s easy to deal with and make sure that your organisation is honourable and respected. That’s the kind of place people want to work for. Bring your key stakeholders on the journey – suppliers, staff, vendors, members and the board. If you get too far ahead or behind your stakeholders, you won’t last. Play a strategy you can actually win.
“Be known as an organisation that’s easy to deal with.”
How does working with the defence community differ from dealing with the members of the previous institutions for which you’ve worked?
It’s unique because we’re a bonded industry, a sector-aligned organisation. Our heritage and our purpose is to serve those who protect us. We support the men, women and families of the Australian Defence Force. We support the contractors, and those who help build the planes, ships and tanks, and so on.
We support the Defence Department and the public service defence personnel. It’s an amazing market for us to be aligned with because it’s a growing sector. It has large numbers of employees and contractors and it’s going through big changes. We’re evolving our strategy to meet these changing dynamics in society.
How have you had to adapt your general strategy to cater to the defence community?
We started in 1975 at Victoria Barracks in Melbourne. At that time, our raison d’être was to provide banking products and services to the army folk who couldn’t get what they wanted from the big banks in Australia. We needed to understand their specific requirements because there are some peculiar aspects to the banking sector when you’ve got people on deployment. For example, their spouses and partners play a big part in their banking relationship if they are on deployment.
You’ve implemented a Member Experience Transformation Program. What are the specifics of that? How has it transformed Defence Bank as a workplace?
We’re clear on what our purpose is, which is to serve those who protect us. That gave us a clear line in the sand about where we should stack our priorities around investment and stakeholder communication.You’ve got to have the courage to double down on that purpose and make sure that every decision aligns to it.
It can be hard because you’re confronted with decisions around priorities and investments every day.
Often, you’ll need to say no because it doesn’t line up with those priorities. We understand that we’ve got a heritage background, a capability to understand defence personnel. We understand the unique aspects of military life and, therefore, we can offer members unique products and services.
We feel we can win that game. So, if we feel we can win it, why don’t we double down on that and go much harder? At the centre of that is what I call ‘member effort’ – reducing the frustrations that our members experience doing their day-to-day banking.
If you can reduce the effort that members put into doing their banking each day, that’s a winning strategy and the rest will follow.
With that clear focus on the bank’s purpose, what are the strategic directions that you have chosen?
First and foremost, you’ve got to grow your people’s capabilities. Second, you’ve got to maintain relevance to your members. If you don’t continue to evolve and remain relevant to those people, you won’t have a business.
You’ve got to have relevance across their life stages too, from cadets, through to reservists and the retired. You’ve got to have some clearly understood services and products that suit those stages across the Army, Navy, Air Force, contractors and public service. Don’t over-complicate things with buzzwords, fine print and fluffy marketing jargon. Do the basics brilliantly. I call this the ‘Swiss watch’ approach – accurate, reliable and professional.
A top priority for us is to continue to broaden our member base which has historically been uniformed defence. Our strategy is to grow that to include contractors, the Defence Department, the Department of Veteran Affairs and public service.
How do you ensure your team stays motivated and engaged while pursuing this vision?
You must have a simple, clear set of priorities and initiatives, and can’t get distracted by things that are not going to make a difference to your members. The second thing is to always talk to your people. You shouldn’t wait to do formal staff performance reviews at the end of each year. You should be doing them constantly; encouraging staff, offering suggestions, guiding them but also empowering them.
There are boundaries but if they operate within those boundaries, they should be empowered and authorised to get on with it. I also ask staff two questions: ‘Will you feel as proud tomorrow as you are today about what you have done?’ And, ‘Are you doing the right thing?’ We all know what these two questions mean.