Many say workplace culture is hard to measure, an intangible. However, that ‘intangible’ has just brought the banks and financial institutions in Australia to their knees.
As banking and finance executives potentially face prison over confessions that have come out of the Banking Royal commission, heads have already started rolling: AMP’s Chair, Chief Executive and 3 Directors among them. Professional reputations are tarnished in the process.
Australia’s financial institutions have stolen millions from consumers over decades.
A few years ago, an ABC Four Corners report showcased the sales driven culture of the Commonwealth Bank’s financial planning division. With a culture built on commissions and the resultant focus on profits at all cost, the bank’s financial advisers regularly recommended speculative investments. Stories of customers losing their life savings emerged.
We’re not talking isolated cases.
This behaviour was wholesale, with the Royal Commission finding that the CBA misled potentially thousands of clients. And it’s not just one department either. The insurance arm of the Commonwealth Bank was exposed by a whistleblower to have measures in place to minimise the insurance payouts to policyholders, many of whom were seriously ill.
British and US regulators imposed a total fine of US$6 billion on Barclays, Citigroup, JP Morgan, the Bank of America, RBS and UBS as a fallout of the 2015 ‘Forex manipulation’. Traders had been found to have deliberately manipulated trades in the $US 5.3 trillion per day global foreign exchange market to favour the banks.
“You can’t have this many scandals on this kind of scale without a corporate culture that is rotten to the core,” said Andrew Schmulow, a senior lecturer in the faculty of law at University of Western Australia.
Many people attribute the demise of the banks and financial institutions to bad workplace cultures. There’s a general recognition that the culture has shifted to one focused on profit (even greed) alone. With the banks effectively protected by the Reserve Bank’s Committed Liquidity Facility, (read: taxpayer bailout), are they deemed too big to fail. Bad customer outcomes and risk are ignored, while poor behaviour is rewarded.
While rotten corporate culture is being named as the culprit, no-one seems to know how to fix it, or where to begin. They say culture is an intangible, it’s not homogenous, and you can’t measure it. We disagree.
The rotten culture was ‘homogenous’ enough to pervade most of our major banks and financial institutions. And you can measure it. Benchmarking and measuring organisational culture underpins our change management program, the ‘Cultural Health Check®’.
The board and the CEO set the tone of the institution.
Presiding over a rotten corporate culture has been proven yet again to be a very risky venture. Ensuring a healthy workplace culture goes to the heart of risk management.
Ask the CEO what the company’s values are, and invariably you’ll get statements like ‘we’re a good corporate citizen, we aim to be transparent, and ‘our customers’ best interests drive everything we do.’
However, look closer at the coalface of the organisation. What are staff rewarded for? Who is promoted, and for what reason? Do these people espouse the organisation’s values?
If the CEO promotes values of customers first, ethics and transparency, yet the organisation rewards different behaviours, staff lose trust, change their behaviour, and the culture becomes rotten.
How to turn a rotten culture around? Speak to those at the coalface. What are their beliefs and values? Pit those against those embraced by management. Is there alignment?
Demonstrably not. But at least you now have a benchmark – the real or default culture. The next step is to put in place strategies that staff in a department, or whole organisation can work on to improve the offending elements of the culture.
We would then go in to remeasure the culture in 6 months’ time.
The board, the CEO, managers and leaders at all levels must promote such palpable values as integrity, customer service, ethics and doing the right thing by their customers. Staff must see these values played out in the behaviours throughout the whole organisation. In other words, they can’t just be waffle.
Through our Cultural Health Check® program, we engage with, and learn about the values and world views of an organisation’s team members. Then we implement a guided program to bridge the gap between staff (real culture) and management (aspirational culture). With our proven methodology, you can turn culture around.
Culture is not an intangible. It’s measurable. And once measured, it can be mastered.
Contact us on 1300 650 080 to discuss how we can put in place a program – driven by your own staff - to measure and master your organisation’s culture.
