RBS CEO discusses the challenges faced by the bank Article icon

RBS

Throughout a major restructuring programme, involving the loss of thousands of jobs, RBS CEO Ross McEwan has retained his focus on the bank's purpose to serve customers well

It was at a meeting with Jaguar Land Rover, one of the bank’s biggest customers, that gave Ross McEwan, chief executive of RBS, the inspiration to articulate his strategy for the future. The car manufacturer had created a triangular diagram, divided into four levels, with its corporate purpose firmly at its peak. The three steps defined the strategic path to achieve the end goal that anchored the triangle: ‘What we need to do to be profitable.’
Speaking at the second Corporate Reputation Summit in London, McEwan explained: ‘We had our purpose about serving customers well. Jaguar Land Rover described what their organisation was about in a way that was so simple. They had their purpose at the top of the triangle and how they were going to do it underneath. We took that and have been using it here.’
The top of the triangle does not change, but the strategy that underpins it does. ‘By saying we’re taking £1 billion [of costs] out. There’s no hiding behind that. I keep coming back to the triangle. It’s a great tool,’ explained McEwan, who was in conversation with Gordon Tempest-Hay, chief executive of Teneo Blue Rubicon. ‘With investors, you bring them in so that they know you will do what you say. In the first investor meeting, they told me: ‘You’ll not reach £1 billion’. We reached £1.1 billion. Next year, we said we would do more. Everybody was very clear that what was coming out was non-negotiable. It meant everybody was very focused. It was very healthy for people to see.’
Inevitably, stripping out such large sums meant job losses - RBS has shrunk headcount from 112,000 to around 71,000 under McEwan’s tenure - but the chief executive was adamant that, by treating staff well and keeping them well informed, they were able to handle the situation. ‘If you don’t tell people, they find it hard,’ he explained. ‘Everyone knew when a business would close, and that we would help them with their CVs and coach them. We would help them find their next role.’
Last year, RBS recorded a ten year high on employee engagement despite cutting thousands of jobs. ‘We have to connect internal and external communications. You have to have brutal honesty,’ he said. ‘The hard thing about being listed is to get the message to your people before results, which go out at 7am. We stay consistent. Discussions with staff happen after markets close. At 9pm on the day before, we give everyone the message without the detail. I think it is a disgrace that you have to tell your own people after the media.’
McEwan refuses to inform the media in advance of his plans and has clamped down on unhelpful leaks within the organisation, launching investigations to identify chatty colleagues and reiterating the ‘rules of engagement’ to the Board. ‘When I started, we leaked like a sieve Everything would find its way out. I went after it... big time. We had hundreds of investigations: we took their phones and iPads. I am very clear that you don’t talk externally about us because it is our reputation. Not mine.’
He admitted that, at times, with the raft of fines and scandals, such as the revelation that its global restructuring group had mistreated up to 12,000 small businesses, plus revealing the UK’s largest ever corporate loss, it had been difficult. ‘Chris [Turner], my head of communications, had to keep reminding me: ‘This is why we’re here. This is why we’re doing it.’ But it’s hard when you’re getting pushed around the whole time.’
Asked whether he had ever doubted that RBS would make it, McEwan said: ‘No. You have to have that belief - that the path you’re taking was right. You just had to go towards the end goal and that, for us, was a customer-focused organisation for the UK.’
He added that the Competition Markets Authority’s recent survey of customer satisfaction, which had RBS in bottom place, was ‘not good for us’ but that it had ‘reflected how people feel’.
‘For me, there are two things that I’m here to rebuild. One is financial strength - which we have restored - and two is trust. We’ve got a lot to do on trust, and we need to do much more. And that’s what we are working on.’