10 tips for changing organisational culture
Martin Cook, June 30, 2014
As financial services' organisational culture comes under more scrutiny under the remit of the Financial Conduct Authority, Martin Cook, principal consultant, organisational change at Bernard Hodes, provides some pointers for success.
There are many definitions of culture, but the simplest is ‘the way we do things around here’. This gentle phrase hints at the largely subliminal nature of culture and the unconscious set of assumptions that define an organisation’s view of itself and how it deals with the world, and in turn what behaviour is legitimised or proscribed. The thing about culture is you don’t need to think about it.
It seeps from the walls of the offices we work in, is enshrined in policies and procedures, and finds form in the day-to-day conversations and behaviour we participate in. You’re both in the culture and of it.
But if culture is largely unconscious and automatic it has powerful consequences for the fortunes (literally) of companies and their customers, particularly, as recent history has shown, in the financial services industry.
The Financial Conduct Authority makes it clear that culture is a determinant of success in the sector, and a requirement in the regulatory regime.
Given this context, what can financial service organisations do to make sure their cultures drive market integrity and consumer trust? How can boardroom aspirations be turned into tangible changes to the way trading floors and branches operate?
Here are 10 pointers for successful culture change:
1. Don’t try unless you are serious. Time, energy and commitment are required to change culture and unless there is resolve at the top any changes will quickly be abandoned when the going gets tough. While improvements can be made in the short-term, culture change requires a strategic, long-term perspective.
2. Be clear about outcomes and benefits. Culture change is best set against a very clear shared understanding by senior people of the outcomes and objectives of change and what kind of culture will achieve them. It is worth spending time to build this picture with the senior group to avoid ambiguity and create the ‘North Star’ against which to guide change.
3. Involve people in an organisation-wide conversation. Changing a culture requires a new model of involvement and engagement. This is best framed around a wide-ranging, ongoing conversation about how the organisation can achieve its corporate objectives. Start with the very senior people and progressively open up the conversation. Alternatively, start at the coal face and ask people what needs to change to achieve the vision. In all cases equip managers to have authentic interactions and conversations with people, develop insights and take action.
4. Role model from the top. People take their cues from what they see rather than what they are told. Having defined and tested the behaviour you require, use every opportunity to have leaders and opinion-formers demonstrate it.
5. Adopt the 80/20 rule when it comes to changing processes. Approach process and behaviour change at the same time but pick the processes that will have the biggest impact on the culture, while being the simplest to change. Don’t try and change everything at once, and be guided by employees as to which will have the biggest impact.
6. Measure what is changing and how it is changing. Use diverse channels to connect leadership to the frontline and seek honest feedback. Use quantitative tracking to measure the extent of behavioural change, and online community forums to identify successes and barriers. Build communities of interest around the various facets of change.
7. Reward good behaviour. The FCA highlights the need for the right incentive structures to underpin the required cultures. Adjust performance management processes to assess behaviours as well as business outcomes.
8. Communicate like never before. This goes beyond the posters with the big words in the lobby. It’s about creating a campaigning mentality and a capacity to listen and encourage dialogue around the organisation. It’s about opening up channels that encourage comment and debate and exploiting informal channels. It’s about the use of subtle nudges to encourage behaviour change.
9. Link the customer into the change process. Let your customers know what you are doing and the benefits you are trying to achieve on their behalf. Work with customers to get feedback and input into what can and needs to change. Bring the voice of the customer into the branch and onto the trading floor.
10. Manage symbolism. Look to change the most deeply ingrained habits through manipulating the symbols of the old and creating new symbols for the required culture. But beware the power of symbols. Strong symbols with the wrong follow through can be a recipe for disaster.
Culture and behaviour change is effected through the considered combination of very public, visible, and rational strategies with more personal, invisible and emotional strategies.
Each organisation has to find the right balance between the two. But whatever methods are employed the key is to root the culture change in the business strategy and customer outcomes.
Martin Cook is principal consultant, organisational change at Bernard Hodes