IT IS just over a year since Terri Dial, the woman nicknamed the “human cyclone”, flew into London on the way back to her San Francisco home from a month’s safari in India with her husband.
It was only going to be a quick cup of coffee with Eric Daniels, the American who is chief executive of Lloyds TSB. “What harm could there be?” Ms Dial asked herself.
“It was a damn dangerous cup of coffee — that’s all I can say. That is how they snared me; I just stopped off on my way home.”
Ms Dial was headhunted to run the retail banking arm of Lloyds, running a 2,000-branch network serving 16 million customers.
Born in Miami 56 years ago, schooled in Chicago and latterly a resident of San Francisco, she came with a big reputation as the woman who helped to build Wells Fargo into one of America’s most successful banks.
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After a glittering career, in which she rose through the ranks from teller to vice- president, she was not exactly looking for another big challenge, but during that coffee meeting she struck a rapport with Mr Daniels and they were soon finishing each other’s sentences about their ideas for the business.
Moving to London was an added draw. “Everyone in the UK wants to live outside of London. Everyone else in the rest of the known universe wants to live in London,” she laughs.
Before starting at Lloyds she posed as a mystery customer, trekking around the London branches of Lloyds and its competitors. “I felt that Lloyds was among the best and had potential. You get a feel for these things after 30 or 60 seconds.”
Even for a woman as energetic as Ms Dial, turning around the retail division of the bank has taken longer than she expected and it has taken 12 months to get done things that she had hoped would take just eight.
“I wish it was one thing. A lot of it is habit. After all, we are 241 years old. This is a huge generalisation, but American culture is more individualistic. British culture is more collective and team-orientated, which makes it harder to get things done.”
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Ms Dial has worked hard to “flatten” the organisation, trying to reduce the layers of reporting lines. “There was a high proportion of staff people to service-line people. There were a lot of requests for information to do internal analysis. When I arrived, for one report we were asked to do we got 55 pages of instruction. I mean the report wasn’t even going to be 55 pages long.
“There is also a formality in British banking, a jargon. I used to read things, once, twice, three times and then I would think: ‘No, I give up.’ I now get these notes from staff saying: ‘I love your memos, they are so easy to understand.’ They have had to deal with all these years of complexity. There is a separate language in the imperial family in Thailand. That was our imperial language, which no one else could understand and it must have been getting in the way of communicating with our teams and, therefore, our customers.”
Ms Dial says that she told staff that at that stage getting things done within the organisation was like “swimming in molasses . . . It must have been my southern roots. I realised that no one understood me, so I told them it was like swimming in porridge. It felt like that for the first few months and then after three or four months it thinned out, as though someone had poured a jug of milk into the porridge, and the rate of progress accelerated.”
Sales through branches were declining in the third quarter of last year, but by the first quarter of 2006 she had reversed the trend and sales were growing. “It is a bigger turnaround than I had historically seen in selling,” she says. Nevertheless Ms Dial believes that Lloyds has concentrated too much on cross-selling in the past five years and not enough attention has been put on innovation.
“We haven’t put our creative hats on in the mortgage market, for example, and I have been pushing for more innovation there. We have not been innovative enough in savings and investment and that is a tragedy, because we have such depth.
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“I like to say that we want to earn the right to 100 per cent of our customers’ financial services needs. Inevitably, I get some stick from some smart kid in the back room who says ‘I think that actually 78.6 per cent of their business is a more realistic goal’, but how do you explain that to anybody?” Innovation will be consistent and planned, rather than reliant on short-term gimmicks. “It has to be designed, not random. I hate the concept of balloons in January, where you get everyone in an auditorium and you release balloons from the ceiling. By May you can’t even remember the slogan any more”.
Ms Dial is also pushing hard to improve productivity: “By that I don’t mean cost reduction and cutting; that is a one-time thing which can be very disruptive and in three years the costs come back. It is more about lowering unit costs to sell, serve and transact. That could be by costs coming down or volumes going up and revenues going up faster than expenses. That way it becomes continuous, not discontinuous.”
All the major banks have been hit by rises in bad debts and Ms Dial says that the issue must be taken seriously. “We can’t be that sanguine about it. The reality is that all the banks are very well capitalised and they are not a threat to the safety and soundness of the banks. But the concern is they are running counter-cyclical and have not been caused by huge unemployment or recession. When you have no debt, you have a lot more personal flexibility. When you have debt, one automobile accident can mean financial ruin.”
Ms Dial’s feisty approach is coupled with a willingness to laugh at herself. When she started at Lloyds, she was away when there was due to be a live broadcast to Lloyds TSB staff from the management team. Worried that the first glimpse that staff would receive of her would be as “talking head”, she commissioned a cartoon showing herself dressed up as a blonde bimbo in different sports gear, including an American football strip and then trying to score a goal in her high heels. The idea was to let people know that she needed their help. It worked a treat and her office is now bedecked with different sports shirts bearing her name from grateful staff.
Her motto has been that if you create the culture, the good stuff happens. By her own admission she has achieved only 20 per cent of what she would like to achieve with Lloyds. Staff inevitably will be pushed to work hard to deliver the other 80, but with Ms Dial at the helm they should have fun trying.