Everyone is talking about culture, and leaders in the financial services sector more than most. But just as culture is crucial, so is it widely misunderstood. “Culture” is an amorphous concept. There is no universally agreed definition, for example.
The primacy of culture over other factors such as vision or direction in shaping the success of an organisation is such that it is famously said to eat strategy for breakfast, but that doesn’t make it easy to understand. To add to the confusion there is a substantial industry dedicated to building and changing culture.
So, what should you talk about when you talk about culture? Here are three things, by no means definitive, to help focus your discussion on what matters most.
Talk about the inputs, not just the output
Many conversations about culture start with leaders pouring over the results of the most recent staff survey. Scores are shared and views are formed on the organisation’s culture.
Action plans are generated, managers talk about “culture” in town hall meetings, and progress is tracked in the next survey.
All of this is useful, but very limited. This is because culture is an output, and to change it you need to focus on the inputs.
To put it in simple terms, consider this: if you target job candidates with low integrity and incentivise them with a bonus scheme that only rewards the best performers while the lowest performers are terminated, then you will almost certainly create a culture of toxic rivalry.
The culture of your organisation is the result of a series of decisions you make about who you hire and how you encourage them to behave. You can ask people about that all you like, but if you want to change things then you need to focus on the inputs.
Talk about alignment
Not only should there be a focus on the inputs, but there should also be a recognition that this needs to be holistic.
There needs to be consistent reinforcement of the same culture and values from the start to the end of your employee’s career with you. We worked with a large fund manager recently whose stated culture enshrined the importance of “collaboration” as a core value.
Their leadership programs covered this in detail, but in many of the coaching sessions we noticed a significant issue; while leaders talked about the importance of collaboration regularly and it was captured in a mandatory objective, incentives were highly individual and promotion was based on personal profit targets.
It’s not hard to guess which drivers had a bigger impact on employee behaviour. It’s all very well encouraging analysts to share their insights or pushing fund managers to pool talent, but if my promotion depends on me outperforming your fund then that’s never going to happen.
All the levers—the inputs—that shape your culture need to be aligned if you’re going to make a difference.
Talk about your customers
Many organisations enshrine customer-centricity in their core values, and even those that don’t would argue it is imperative. But what steps does your firm take to bring this value to life?
With their mutual structure and sector-specific origins, Industry funds have an inbuilt advantage here, and many do this very well.
At its most basic, employees should be regularly reminded of who their customers are and what they want. This means incorporating customer content into key touchpoints such as new hire onboarding and performance measures.
More committed organisations might actually bring their customers into the building. Listening to clients talk about their experience with you (and your competitors) can be powerful.
For a genuinely customer-centric culture though, why not actually engage your customers in helping define what your culture should be? Talk to clients, investors, regulators and ask them what they want from you. That removes the guesswork, and it makes it very clear to employees exactly what a customer-focused culture looks like.
And in a post-Hayne world this has the added benefit of sending a clear message to the stakeholders you engage with just how committed you are to putting customers at the heart of your culture.
We have a lot of conversations with people about culture. Some are rambling and fruitless, others are enlightening and invigorating. But generally speaking, when the conversation gets to the topics of alignment, customers, or discussing inputs rather than outputs, we know it’s worth talking.
