With the financial services (FS) industry experiencing disruption from nimble, lean startups, changes in long-term thinking about spending are becoming a competitive necessity.

In the first part of this series, we talked about how it’s time for leaders in FS to reinvent the entire culture of their organizations and create a smart spending mindset among the workforce.

Accenture Strategy analysis of more than one million employees at more than 200 organizations undertaking change initiatives finds that passion and drive can increase benefits realization by 50 per cent, as opposed to fear and frustration resulting in a 20 per cent decline in the same category. 

How can FS leaders correctly motivate and engage their workforce for a successful smart spending program? By building a culture of trust, transparency and collaboration. 

Create trust in leaders. Trust in leaders is key enabler of emotional agreement, which is the main differentiator between high and low performers. Show your FS workforce support of smart spending programs through your actions, not just words.

Be a transparent leader. Clearly identify the biggest areas of spend and make a visible commitment to change goals. Fulfill your promises. Demonstrate to the employees where and how you are re-investing for growth and the benefits achieved.

Appeal to hearts and minds. Use personal stories to paint a picture of a smart spending future. Showcase success stories, celebrating real people and real results. When you keep cost-conscious behaviours top of mind, your FS workforce is more likely to adopt and continue the smart spending vision.

Startups have the advantage of starting lean and hungry – therefore smart spending will be key to survival. In a world of ever-evolving customer expectations, new entrants are tailoring their services and offering them at a lower cost than the industry incumbents. It’s crucial for both employees and leaders in FS to ‘spend smart’ by aligning investments to the customers’ needs. 

“Ownership mentality by employees en masse” will be critical for traditional FS firms competing in this emergent economy. The people portion of any smart spending program is no longer “soft and fuzzy.” The data is clear: leading with mindset and empowerment is crucial to the success of any cost transformation effort. 

Many thanks to my colleagues Diana Barae, Shammak Banerjee, Patricia Feliciano and Jan Mueller who authored the recent report: Smart Spending is not Just About the Numbers

My blog series from last month also covered in detail how to overcome barriers to sustainable cost reduction in FS.

To learn more, register to download the report: Piling off the Pounds in Financial Services