Developing a Management Philosophy: The A Approach for Managers
Founded in 1889, Northern Trust has been human-centered for over 125 years. A Chicago-based financial services firm with over 20 international locations and 17,000 employees worldwide, Northern Trust has a client-centric, relationship-based culture. Northern Trust's duties as a fiduciary bank set the company apart from retail banks and makes it legally responsible to meet the needs of its corporate, institutional and individual clients.
The Client and Partner Experience (CPX) team, a 20-person group of researchers and designers, represents part of the company's commitment to improving and innovating the client and employee, or partner, experiences. Since its launch in 2015, CPX has worked on over 25 projects to bring differentiated digital and service experiences to clients and partners using design thinking methods.
A 2015 employee engagement survey revealed some gaps in career development practices. Then-CEO and current Chairman Rick Waddell engaged CPX to apply design thinking to identify employee pain points, surface innovative opportunities and suggest next steps. The survey found that while employee engagement had steadily increased over a three-year period, career development—one of three identified drivers of engagement—had stalled in progress.
CPX built on these findings with an iterative approach that relied on the initial quantitative study to inform qualitative interviews, which in turn led to a total of three more rounds of quantitative and qualitative research. Our research found that there was a gap in how managers supported career development, and qualitative interviews uncovered that many new managers did not know what great management looked like at Northern Trust. Waddell, HR and CPX immediately recognized that defining a Northern Trust management philosophy represented an enormous opportunity area—and also was critical to the institution's ability to compete moving forward.
“Having a clear management philosophy is going to enable us to move the organization forward.” — Waddell
In collaboration with HR leadership, CPX developed the "A Approach for Managers," a set of five principles that the research surfaced as drivers of effective management at Northern Trust. In September 2017, Northern Trust launched a pilot system for new manager metrics, as well as the first A Approach for Managers three-day course aimed at evolving management practices from within. The A Approach for Managers has also been integrated into Northern Trust's established performance management systems, and every manager—from the CEO down—is asked to link his or her yearly goals to the behaviors the philosophy lists.
The A Approach for Managers is a set of behaviors that provide structure to the support of managers at a multinational company. Its success on launch can be credited to a design strategy that:
1. directly aligned with and reinforced Northern Trust's business strategy;
2. relied on feedback from employees at all management levels (from first-year managers of small teams to C-suite executives) in a range of locations worldwide;
3. used quantitative and qualitative data practices to surface philosophies that fit Northern Trust's company culture; and
4. was intentionally collaborative, involving HR, Business Unit presidents and other company leaders
Employee IdeationInterviews and ideation with 48 managers and direct reports surfaced key levers of career development at Northern Trust.
Leadership Co-creationIn focused co-creation and ideation sessions, managers across the enterprise shared what great management looks like at Northern Trust.
Leadership BrainstormingWe led a brainstorming session with the Business Leadership Council, a 170-person group of Northern Trust's top leaders across all business units.
Leadership brainstormingWorking in small groups, the top 170 Northern Trust leaders identified what they most needed in order to embrace and embed the A Approach for Managers in their teams.
A Approach for Managers SummitTo date, the A Approach for Managers Summits have introduced over 250 managers to tools, techniques and resources that will help them grow as managers and support their direct reports.
Northern Trust's desire to better serve employees led HR to commission ongoing employee engagement studies from HR consulting firm Towers Watson. The 2015 survey revealed that while overall employee engagement had increased from 2012, career development had stalled.
Then-CEO Rick Waddell recognized an opportunity to improve the corporation's approach to the employee experience. Waddell himself had gone through career development at Northern Trust after starting at the bank in 1975. Since Waddell had become CEO in 2008, Northern Trust had rapidly evolved in step with broader changes to the financial services industry. Northern Trust had expanded from fewer than 7,000 employees based primarily in Chicago in 2000 to over 20 international locations and 17,000 employees worldwide today. The enterprise needed a more systematic approach to career development that would ensure partners gained valuable institutional knowledge and grew in their capacity as agents of Northern Trust's core values of service, expertise and integrity.
Laying the groundwork for a research strategy.
CPX came on board on the heels of the 2015 report to use design thinking to surface key levers of career development and develop concepts to address employees' unmet needs.
We decided on an iterative research approach that used the original quantitative survey results to inform in-depth qualitative interviews and co-creation sessions, all with the aim of building a solution fit to Northern Trust. Our research design took the following criteria into consideration:
To account for Northern Trust's global presence, research participants were from five locations across three continents: Bangalore, Chicago, Limerick, Los Angeles and Seattle.
2. Professional level & tenure
We wanted to design solutions for employees at all levels, from first-year managers through senior vice presidents up to the CEO. This also meant considering managers who had grown up in Northern Trust, and those who had joined recently.
3. Number of direct reports
Whether managing a three-person team or a business unit of thousands, employees needed solutions that helped them embody the best of Northern Trust.
4. Performance level
Talking to high- and low-performing managers gave us a comprehensive view of what makes for effective management at Northern Trust. Additionally, it allowed us to identify and design for pain points across a wide swath of managers.
5. Business unit & function
Across Northern Trust's three business units, we focused on roles that were strategically important to the company's future, enabling the development of solutions aligned with business strategy.
Applying varied research techniques to uncover insights.
The research encompassed six main components, with analysis at each step informing future research. This iterative approach afforded us the opportunity to solicit direct feedback on concepts, prioritize opportunity areas, and surface partner stories and perspectives to guide decisions made by executive leadership.
Research method: Quantitative: Towers Watson all-employee survey
Goal: Analyze employee engagement across regions, roles and time.
Respondents/response rate: 13,578 employees/87%
The survey identified three drivers of employee engagement at Northern Trust: career development, communication and work environment. While communication and work environment scores increased from 2012 to 2015, career development scores had stalled, prompting Waddell to recommend CPX look deeper into causes and identify opportunities.
Research method: Qualitative: Individual interviews & co-creation sessions
Goal: Surface mechanisms for better supporting career development.
Participants: 48 employees
The 40 direct reports and 8 managers we interviewed were from five locations in three roles, each viewed as strategic to the business. Interviews uncovered six opportunity areas: (1) encourage constructive feedback, (2) help employees navigate growth, (3) mandate managing as a critical expertise, (4) select and prepare future managers, (5) boost partners with needs-based mentoring and (6) create structure that supports role shifts. We ran pilots across three of these before turning to additional research to determine our focus moving forward.
Research method: Qualitative: Analogous research
Goal: Examine how other industries support career development.
Participants: 1 fighter pilot (U.S. Air Force's Special Operations Command), 1 journeyman electrician, 1 managing director (global consulting firm), 1 product engineer (large tech company)
Taking into account aspects of career development that earlier research had shown Northern Trust employees could benefit from, we interviewed individuals in fields that exhibit best practices around transparent feedback (USAF pilot), growth and education (electrician) and the application of technology to career development (product engineer).
Research method: Quantitative: Survey to prioritize opportunity areas
Goal: Identify what research focus would most impact career development at Northern Trust.
Respondents/response rate: 145 employees/21%
We designed a quantitative survey to bring in a broader employee voice to help us prioritize resources and to inform decisions made at the executive level. We discovered that manager's support of career development played a crucial role. Combined with the fact that 70 percent of employee engagement has been attributed to managers (Gallup, 2015), CPX and HR focused on two opportunity areas: managing as a critical expertise and preparing future managers.
Research method: Qualitative: Individual interviews & co-creation exercises
Goal: Surface philosophies of great management at Northern Trust.
Participants: 22 high-performing new & senior managers
We asked individuals identified as great leaders to consider how we might build off of Northern Trust's values of service, integrity and expertise to articulate a management philosophy. In one exercise, we asked managers to describe how they embed each value into their work. We then engaged in a co-creation exercise, having managers write key phrases of a philosophy, as well as react to draft philosophies we had created.
We found three main attributes of what makes for great management at Northern Trust and will enable us to reach strategic goals: (1) leading with confidence, (2) managing with care and (3) enabling with trust. These were used to build out five A Approach behaviors to guide hiring and promoting.
STEP 5 (ongoing)
Research method: Quantitative: Follow-up surveys
Goal: Measure manager's effectiveness following A Approach for Managers programming.
Respondents/response rate: 431 direct reports/58%
Today, we are assessing our design's impact through surveys. Managers participating in two A Approach for Managers training sessions have completed pre-surveys rating themselves according to the A Approach principles. A pre-survey of these managers' direct reports additionally assessed employee engagement and loyalty to manager. Planned 6- and 12-month surveys will allow us to analyze the impact of the A Approach on manager behavior.
Bringing design philosophy to life through co-creation.
The resulting management philosophy, a set of five key principles called the "A Approach for Managers," was a product of intentional co-creation. We worked with Chief HR Officer Gillian Pembleton and Waddell to ensure that the philosophies fit with hiring and talent retention goals, as well as Northern Trust's business strategy. For instance, managers told us that our consensus-driven culture had not evolved with the company, and decisions that made sense for senior-level managers to make when Northern Trust numbered in the thousands were creating inefficiencies today. The A Approach "equip others to take the reins" encouraged managers to empower others to make decisions in line with business strategy.
We then sought feedback on potential philosophies from employees, and the A Approach is drawn directly from statements we heard and tested during qualitative research. In January, 2017, we led a brainstorming session with the Business Leadership Council (BLC), a 170-person group of Northern Trust's top leaders across all business units. Working in small groups, leaders identified what they most needed in order to embrace and embed the A Approach for Managers in their teams.
This co-creation process created philosophies that are distinctly Northern, fitting our 125-year-old company's culture and relating directly to the behaviors managers need to display in their responsibilities.
Scaling a program that takes Northern Trust's culture, values and business strategy as its foundation.
With backing from Waddell—and now from his successor CEO Mike O'Grady—the A Approach for Managers has become a visible part of Northern Trust's employee experience through a set of outcomes:
Waddell demonstrated the company's commitment to the initiative by publicly embedding the philosophies into his yearly management goals at the BLC meeting of top leaders, before asking BLC managers to do the same. Today, the A Approach for Managers is part of our established performance management systems for all managers, who build their yearly goals on the principles.
Metrics, hiring & promotion
In September 2017, Northern Trust launched a pilot system for new manager metrics, and direct reports have begun to measure their managers based on the principles. We are in the process of applying the principles to hiring and promotion criteria.
Also in September, HR hosted the first set of A Approach for Managers summits. These three-day learning experiences focused on the importance of managers connecting their teams' work to business strategy and helping their direct reports' career development. Held in Bangalore, Chicago and Limerick, over 250 managers have completed the training to date, with plans to train 600 to 700 managers per year.
The A Approach demonstrates the company's commitment to its employees' career growth and ensures the management culture at the foundation of Northern Trust's 125-year success is scaled as the company continues to evolve.