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Louis Carter, speaker at Talent Management Asia
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How MasterCard implemented 3-D leadership transformation



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Huge changes, a new leadership mindset, and innovative training converge to maximise opportunity at MasterCard, writes leadership development specialist, Louis Carter.

“Technology is changing everything in the payments industry. The rapid changes are creating a host of opportunities and challenges for us.”

– David Deacon, chief talent officer, MasterCard

Just about everything has changed at MasterCard in the last seven years.

Before its IPO in 2006, MasterCard was a not-for-profit association owned by the 25,000 banks and financial institutions that issued its cards. Essentially, it functioned with a service provider mindset.

Following the transformation to a public company, MasterCard (MC) is now confronting three changes:

  • the huge opportunities that the digital and mobile revolutions present.
  • the evolution of a world beyond cash and the chance to reach a much wider range of stakeholders, such as governments and merchants.
  • the urgency of addressing the commercial opportunities from the new spectrum of stakeholders, and the rapid growth of digital ecosystems requires shifts in MasterCard’s leadership mindset.

For decades, the only tangible token of MasterCard’s existence was a plastic card bearing an account number. Today, the industry is all about smartphone apps, “tap and go” payments and “digital wallets.”

As MasterCard’s world has experienced a shift in its company profile, the leadership has changed, as well, starting at the top.

Ajay Banga, born, raised and educated in India, became CEO in 2010; and has brought a new perspective to a company based in America, but one that conducts business around the globe.

He has a laser focus on achieving a leadership transformation at the company.

MasterCard’s new leadership mindset

Banga has pushed executives and managers to take on a more ambitious, market-focused mindset, as befits the leaders of a public company. He wants leaders to be more innovative and less risk-averse.

With 60% of MC’s revenue now coming from international markets, Banga wants leaders who offer a global perspective and reflect the diversity of the company’s consumer base.

The need for a leadership transformation is expressed simply and candidly in one slide from an in-house presentation earlier this year: “We are going to create the leaders of tomorrow who are different than the leaders of today.”

MasterCard has launched an aggressive leadership trifecta to achieve that leadership transformation:

1. The executive leadership programme for senior-most leaders

2. Strategic external hiring to bring in senior executives from outside, including leaders from diverse backgrounds not tied to the financial services industry

3. A programme that trains MC’s future leaders and high potentials. They work with “talent shepherds” and custom development plans that supplement the more traditional skill-building sessions.

For example, in MasterCard Labs, the company’s R&D group, employees are challenged to generate innovative ideas, and then transform those ideas into prototypes.

The idea-in-progress is then handed off to an incubation team for further development. The entire process, from ideation to commercialisation, takes place in-house.

The idea-in-progress is then handed off to an incubation team for further development. The entire process, from ideation to commercialisation, takes place in-house.

That’s a far more effective way to train future leaders than clicking through another PowerPoint presentation.

First dimension: Executive leadership programme

Upon his arrival, Banga ordered up a programme to instill a new mentality in MC’s senior executives.

He turned to (now) CHRO Ronald Garrow, who developed the curriculum and then led MasterCard’s first executive leadership programme (ELP), just a few months after Banga had become CEO.

The ELP is a four-day, off-site that includes assessment, coaching, teaching and dialogue, with MC’s senior executives doing a majority of the teaching.

The purpose is to have leaders understand the primary responsibility in the transformation of the business and the urgency to make that happen lies with them.

To date, more than 190 senior-most executives have worked through the ELP. When David Deacon arrived as chief talent officer in 2012, he took over the programme.

In the ELP, leaders learn about the four behaviours that make up MC’s winning formula: a “relentless” focus on business goals; the aggressive promotion of simplicity and timely action; collaboration across functions and business units to enable quick responses; and, being change catalysts and role models.

The first groups of senior leaders who have been through the ELP say it works. The number of leaders identified as “highly effective” in the four desired behaviours doubled after attending the programme.

Prior to these sessions, only 31% of MC’s senior leaders pre-ELP were described as highly effective at being catalysts for change, while post ELP, 61% percent were rated as highly effective.

Second dimension: Strategic external hires

MasterCard conducted a significant amount of external recruiting during the past three years, where the the strategy is about much more than simply filling slots.

The real goal is “to change the gene pool” at MasterCard, as one senior executive put it, by bringing in new talent, team members that offer different perspectives.

The new hires come from a variety of countries, and represent ethnic and generational diversity. Many do not even come from financial services backgrounds. Rather, they have been drawn from leading technology companies, consumer-oriented companies and merchants.

The result is a remarkably diverse talent pool, giving MasterCard a strategic advantage over competitors when it comes to innovation.

The purpose is to have leaders understand the primary responsibility in the transformation of the business and the urgency to make that happen lies with them.

MC’s external hiring initiative is as smart as it is daring. Bring in a number of hand-picked leaders from a variety of backgrounds and plug them into senior positions is a fast track to change the status quo.

Won’t some of the existing senior leaders resist the new faces? Of course they will. That’s part of the programme.

The goal is to keep up with rapid change and teach leaders to become change agents, so it is helpful to identify those who cannot adapt well to new ideas and ways of doing things.

Third dimension: High-potential development programme

After Deacon arrived in 2012, he and Banga agreed that a crucial factor was missing from their transformation formula: being able to teach the new leadership mentality to the next generation of leaders, MasterCard’s high-potentials (HiPo).

Deacon saw an opportunity to improve the way MasterCard approached HiPo development, without relying primarily on group training in the form of classroom instruction and group exercises.

He wanted to put into practice a highly individualised, custom-tailored development model, central to which is the use of “talent shepherds.”

Here, each HiPo is matched with a talent shepherd, who is a senior- or mid-level talent management executive from the HiPo’s region, and the two enter a one-to-one relationship that continues for several years.

The HiPo undergoes an assessment to identify strengths and weaknesses, then meets with the talent shepherd to review the assessment results and create a personalised development plan.

The plan may include anything that will help build up an individual’s leadership muscles. For example, is the HiPo lacking a global perspective? Then perhaps an overseas assignment is in order.

Does the young leader need a broader experience in the outside world? How about serving on a non-profit board in their local community?

One place high potentials will land is in MC’s new Innovation Express.

Innovation Express is innovation on steroids. Heterogeneous teams of employees are assembled for a 48-hour burst of innovation and creative thinking, during which the challenge is: “See what you can come up with!” on a given topic.

Several teams compete to build prototypes, demos and go-to-market plans. The 48-hour clock and team competition fuel achievements in hours that would normally take weeks or months to accomplish.

Supervisors are not always the best talent coaches, and especially when it comes to shepherding high potential talent, internal politics can get in the way.

In a Best Practice Institute research report last year, we surveyed the global leadership development practices of several Fortune 500 companies, confirming what Deacon has concluded about typical development programmes.

Two of the most common development practices are technical training (65% of companies) and online learning (55%), while less than a third of large corporations use any kind of ongoing, long-term leadership development process.

How is a talent shepherd different?

What is the difference between a “talent shepherd” and a supervisor, mentor or coach?

First, this is a long-term relationship. A talent shepherd and high potential will work together for many years, interacting once every couple of months.

Second, a mentor or coach is often consulted to address a specific skill or body of information. A talent shepherd has a much broader focus: to raise up a leader.

Third, the talent shepherd is not someone in the HiPo’s direct chain of command.

Supervisors are not always the best talent coaches, and especially when it comes to shepherding high potential talent, internal politics can get in the way. In contrast, a talent shepherd’s training and mandate is to bring out the best in others.

New leaders, new mindset, new MasterCard

It’s all about change at the new MasterCard.

As Deacon has pointed out, the rapidly changing financial services industry and our ever-changing world present both opportunities and challenges for MasterCard and its employees.

Through its bold strategy to achieve nothing less than a leadership transformation, the new MasterCard hopes to seize the opportunities and continue on the path of success.

One of the world’s leading leadership development specialists, Louis Carter is the President & CEO of the Best Practice Institute, a think tank and research institute devoted to leadership development and excellence. He is also a headline speaker at Talent Management Asia 2015.

 TalentManagementAsia2015_banner_645x90_3-Louis

Talent Management Asia is Asia’s biggest conference on talent management and human capital strategy, attracting a large audience of senior HR generalists and specialists as well as other C-level executives involved in their companies’ HR strategies.

To increase your knowledge and skills across the talent management spectrum, don’t miss Talent Management Asia in April. Review the topics & agenda, check out the stellar speaker list and reserve your seat before it’s sold out.

For more information please contact Carlo Reston on +65 6423 0329 or carlor@humanresourcesonline.net.



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