Like many people I’ve been simultaneously intrigued and revolted by the news of the Libor fixing. Revolted because I cannot square the banks’ duty for ‘public best interest’ with the personal greed that seems to have rotted the core of the industry; and intrigued because I’m fascinated by culture – that oh so abstract and intangible aspect of an organisation.
As Edgar Schein states in his book ‘Organisational Culture and Leadership’, “Cultural forces are powerful because they operate outside of our awareness”, and yet according to Harvard Business Review’s article on culture in this month’s issue, “A strategy that is at odds with a company’s culture is doomed. Culture trumps strategy every time”.
So what will it take to change the banking industry’s culture? Based on my own work, and the thinking and research of others who I respect, these are the top 4 areas that need to be addressed – none of which will happen overnight.
1. Change the Values
If it’s all about money, then the result is greedy behaviour.
If it’s about service, then the result is a happier customer base, more loyal staff and longer-term growth for shareholders.
2. Focus on a Few Critical Shifts in Behaviour
Coincidentally HBR ran an article this month on culture. It recommended this question – ‘If we had the kind of culture we aspire to, in pursuit of the strategy we have chose, what kinds of new behaviours would be common? And what ingrained behaviours would be gone?’.
Consult across the organisation (and industry) and focus on a few key areas of behaviour that need to change – across the board.
3. Encourage Diversity
It’s not a coincidence that there is such a lack of female and racially diverse talent at top levels within financial services (2 of the 12 board directors at Barclays are female, 16% in the FTSE100).
It’s too easy in the recruitment process for subjective preference to play its part – albeit at an unconscious level. The challenge is to recognise its role and then challenge the process to ensure that the subconscious doesn’t drive the process.
4. Change the Environment
An industry’s culture goes way beyond values and behaviour. The whole environment in terms of working hours, social interaction and language also plays its part.
Bob Diamond may have had a ‘no jerk’ rule, but that neglects the fact that people are naturally influenced by their environment – what they hear and what goes on beyond the boundaries of the office walls.
There are many more aspects which need to be addressed, but these four – values, behaviour, diversity and environment are key. Which is why it won’t happen overnight.