Trained as a lawyer, Peter Aceto began working at Tangerine—known then as ING Direct—in 1996, as the company’s general counsel. But he soon assumed broader roles within the company, including helping launch ING in the United States. In 2008, he was appointed CEO of the bank’s Canadian division. Released this fall, his book Weology: How Everybody Wins When We Comes Before Me, outlines his leadership philosophy, which focuses on creating a positive business culture based on transparency, equality and collaboration.
As a bank CEO, you’re pretty unconventional: You gave up your personal parking space in the company lot, adopted “screw the status quo” as a mantra, and in your book, Weology, you say you don’t know your bank’s mortgage rates. You write that you view yourself as a leader of a banking company, not a banker. Why are you more interested in leadership than interest rates?
Look, I think the world is changing around us, and I think leaders, if they want to be effective, are going to have to change and evolve and lead their businesses in a very different way. Traditionally, our ideas have been so hierarchical: The more successful you get, the higher up the building you move. You get a bigger office with a bigger door, but you actually get further removed from your employees all the time.
I think we need to challenge that. A common thread in my book is equality and transparency, and putting “we” before “me.” These things are the essence of our culture and the recipes for the success of this business.
Was there a moment in your career when you decided you wanted to bring a different approach to the C-suite?
I think the most important thing was some advice I received about authenticity. I was a lawyer before joining ING Direct, as Tangerine was called then, and when I started my new job at the bank, I was trying to be something I thought I was supposed to be. I thought there was a way to behave, a way to dress, a way to talk. And someone in my life who knew me very well sat me down and said, “Peter, I know what you’re like, I know what you love, and you’re being someone else at work. If you were true to yourself, people would enjoy working with you even more.”
That was a game-changer—one of the most liberating moments in my life, because it gave me permission to actually be myself. And I found I immediately started connecting deeply with people at work. And people were interested in being on my team and putting the team first.
You’ve done a lot to change the bank’s culture. When you were appointed CEO, employee morale and engagement were bottoming out. Staff complained that the business was being run like a machine—the overall engagement score was 58%, and scores were much lower in areas like team quality and team collaboration. How did you turn things around?
In that first year, it was very much leading by example—demonstrating authenticity and demonstrating equality. Some bad habits had crept into this business. People had assigned parking spots, and we killed all that, including mine. We had lots of committees, so things weren’t happening as quickly as they possibly could, and so we tried to make most of those committees disappear and make accountabilities clearer to individuals. But most importantly, I spent hours every single day talking to our employees. I ignored the org chart and talked to whomever I wanted, whenever I wanted, and really tried to smash some of those traditional views of hierarchy. It was important to change ideas about who should connect with who, and really bond and force other leaders in the organization to do the same.
That included spending time in your call centres too, didn’t it?
I took customer calls every single day. I sat down, got on the phone and really began to understand the challenges the call centre staff were facing. It was very tiring but also very exciting. There was a lot that had to change at Tangerine—I mean, even today, even though I behave in a very different way, there are still people who are intimidated just by the role and title of CEO. So I’m trying to constantly break down those barriers. I think [my taking calls] made people feel a little uncomfortable, but sometimes that’s what it takes.
One year into your term, you held a company-wide referendum on your leadership. You let your staff decide whether you should stay or go. Why would you ever do something like that?
You know, it’s usually a shareholder or a board that chooses the CEO, right? But CEO-ship is really about leadership, and the 900 or so employees we had at the time hadn’t chosen me. They were given me. At some point, you need to be chosen as a leader, both for the people you’re leading—so they can feel like they made a choice—but also so you know that you’re wanted, and that people feel confident in you and will follow your guidance. So it wasn’t completely selfless; it was also a bit selfish. And I included that in my communication to our employees. I said, “Look, I’ve been here for a year. I’ve told you the way I think we need to be, and I’ve told you about the changes we need to make. You’re seeing it. Now the time has come for you to decide if you want me to be your leader. And if you do, then you’ve chosen me now, and I think that gives me more rights.”
Were you worried it might backfire? You promised you’d leave the job if the vote went the wrong way.
You know, if you’re going to do this, you should have a clear feeling about whether you’re winning or losing, whether you’re making progress and if the engagement of your employees is headed in the right direction. And, yeah, I got a clear message from the company that they were happy with the direction I was taking them in, and the results [more than 97% in favour] bore that out. That was six years ago. I haven’t done it since. Maybe the time is coming to ask again.
Can all that humility come across as weakness though? Can it interfere with your job?
Yeah. You know, I’ve had people say, “Don’t get too close to your employees,” because if you connect in a deep way, it makes it very difficult to exercise your duties as the leader of the business. And I can tell you that is good advice: It is harder to make difficult decisions. But leadership is all about making tough decisions. Look, there is so much power and energy in connection and in having our employees aligned, with us and with one another, that the benefits significantly outweigh the difficulties.
You’re very active on social media. Why is that important to you?
I think consumers, in general, don’t trust corporations very much. From Enron, in the past, to Volkswagen, more recently, there’s this regular lineup of breaches of trust and confidence. So if you have a business that really is built on a platform of transparency and doesn’t mind letting customers see what they’re talking about in the boardroom, that can be powerful and can differentiate you from your competitors. I’m demonstrating that transparency, and I talk about the good and the bad on social media. And I deal with unhappy people too. If we make a change that is negative for some consumers—maybe we choose to charge a fee or we change our name—it’s important to be part of the conversation and share our experience and perspective. Because that conversation is happening on social media anyway, whether I’m involved or not.
You may also be one of the only CEOs who talks about his mother on social media—and invites her to work events.
Oh, my mom. I bring her everywhere—to all my big moments. It’s just part of who I am. People seem to think it’s really cool that I love my mom.
You rebranded ING Direct after it was acquired by Scotiabank. What did you learn from that experience?
We changed our name because we had to change our name. If we didn’t have to, we would never have done it—we had built so much equity in it. But we took the opportunity to think about the future and, in many ways, it was a bit of a luxury to take the time to think about where we wanted to go. We knew that from a risk-taking perspective, we needed to make a choice that made us feel a little uncomfortable. Which it did. But we involved about 10,000 Canadians in online focus groups to help inform the decision, and when we asked what our brand meant to them, the colour orange was very important. So the way they thought about us, combined with our strategy for where we were headed—the line “forward banking”—informed the choice we made.
You’re very clear about what you are as a brand and what you aren’t. In your book, you talk about “firing customers.” Why would you do that?
We’re a business model that is for a specific group of Canadians: We call them direct-ready consumers—anyone who shops online and buys online. So if there are consumers who really need a face-to-face interaction with their bank, we’re not going to be able to make them happy. They might like our rates, they might like that we don’t charge fees, but we need to make sure we don’t accidentally get customers who need the service those fees pay for. So we have to be thoughtful, sometimes, about saying, “I just don’t think we’re going to be able to make you happy.” And if we have to, we ask them to leave.
In my book I also talk about consumers treating our people badly—being rude to them. And I don’t think that’s acceptable in any context, so in the case I wrote about in the book, I felt I had an obligation to do something about it, and I did. I shut down their account.
Arkadi Kuhlmann, who founded the bank and brought you in, had an interesting hiring philosophy: He liked people with “dents and scratches.” He thought setbacks in life make people more motivated to succeed. Do you carry on that approach?
We don’t look for that anymore. But what we do look for, which I think is a broader version of the same thing, are people who are really in tune with who they are as people. They understand their personal values and the importance of matching those values with a company’s values. Magic can come of that.
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