How to effect culture change in financial services

Guest bloggers:

jill traffordnatalie wharton

Jill Trafford (left) and Natalie Wharton (right) are consultants within Deloitte’s change practice

The financial services industry has been dealing with significant change following the banking crisis in 2008

Since then, close scrutiny and countless internal reviews and economic and regulatory reform has result in a wave of change activity across the sector.

Banks specifically have been adapting to a changing – and more challenging – market, with greater consumer awareness of financial performance and new banks competing for customers and employee talent. Those banks that haven’t yet considered their ability to adapt and change in this market will struggle to survive.

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When the need for change is so significant and immediate, companies often react by looking at their internal structures and processes – in effect the tangible solutions. This has proven to be an effective short-term fix for many, but it has not been addressing the underlying issues that contributed to the financial crisis: culture.

Organisations now realise that sustainable change, which will have a real impact on a company’s long-term reputation, can only be achieved through changing the underlying culture that inspires people to think, act and make decisions.

We only need to look at the banking industry to see how culture can negatively impact a business, both in terms of profit and consumer reputation. While cultural change is a familiar concept, it is often difficult to imagine and implement real and practical steps and measures to encourage change. There is a perception that culture (and therefore cultural change) is somehow intangible and, as a result, many organisations are wary of committing the time and effort to something that they cannot see delivering definite, substantial and financial results. This often translates as something that is not worth doing, since it simply does not lead to immediate cost cutting and improvement in profitability.

Traditionally, boards have relied on internal employee satisfaction surveys to provide them with insight into how employees think and feel about their company and the culture of the business. The actions following such a survey often lack impact and ability to drive real change. This is in large down to managers viewing the activity as a ‘tick box’ exercise, the actions being deemed too difficult to manage, or outside a manager’s sphere of immediate control.

Any culture change programme must start with a clear understanding of the outcomes the organisation wants to achieve and the impact – good or bad – that the current culture is having on its performance. Organisations can define a future culture through breaking it down into specific categories and assessing or understanding where they would like to be against each one.

These categories can be across a range of areas including; appetite for innovation and transformation, the level of external focus, the style of leadership, the exposure to risk and regulation and the infrastructure or process requirements. A session to identify the culture vision would help any organisation identify the type of culture they are striving to achieve and the journey they need to take to get there.

After a new future culture has been articulated and visualised, and it’s fully endorsed by leadership teams; companies face another challenge: how do you make culture change tangible? How do you know it has worked?

Our experience on large change projects in different organisations and across industries has enabled us to develop definite ways in which companies can make culture change tangible:

  1. Developing organisational values and behaviours that are then embedded across the entire colleague lifecycle or employee value proposition including recruitment policies, development interventions and talent and performance management processes. The focus will then be on how the leadership population implements and executes the values as part of these people processes, and being ultimately held account.
  2. Analysing the business and identifying the critical moments that drive disproportionate value for the business, such as the first point of contact for a customer, or the security check for a cold caller. Then, identify the skills, knowledge and behaviour required to execute these and streamline the delivery of the business strategy to improve performance.
  3. Identifying a specific area of culture change to focus on first; responding to risk and regulation, developing innovation and transformation capability, defining clearer control mechanisms or defining how performance is managed. By focusing on one area, and using this as the catalyst for change, organisations can implement initial quick wins and employee engagement whilst developing longer term change to drive deeper change across the business

Organisations, especially those in the financial services industry, have recognised their part in the financial crisis and are engaging in the process of change to win back the trust of consumers. They must find a different way to transform their businesses to succeed in this new environment. Cultural problems have many causes and therefore there will be no single ‘silver bullet’ solution. However, changing the way they manage their people and therefore how their people behave will be the driver for success. The key change necessary for financial institutions to prosper will be cultural, and this is ultimately in the hands of business leaders.

This article was originally published under HR Magazine on 25 June 2013.

Is your change going to fail?

Guest blogger:

Anthony-Greenfield_profileAnthony Greenfield, Director and Founder – The 5 Forces of Change

When you look back on your change 6 months after its gone live, will you be glowing with pride or wondering where it all went wrong?

Don’t wait to find out – do something now!

When it comes to organisational change there’s often a lot of pain, but not much gain. At the heart of the matter is the effect change has on people – the very things that drive them to excel at work are deeply threatened. No wonder people oppose or avoid change. No wonder it so often fails.

Organisation have to change, people don’t. And if people don’t change there is no change!

The good news is that by understanding what makes people tick you can reverse the situation. By working with the grain of human nature you can channel people’s energy and ingenuity in pursuing change rather than in opposing it – leaving looking back on your efforts with pride not regret.

5 forces of change

So how well are you doing right now?

You can gauge your chances of success by scoring your initiative against the forces that determine whether or not your people will change (The 5 Forces of Change). For each of the following five statements, score 1 if you ‘Strongly Disagree’ and 5 if you ‘Strongly Agree’ with the statement. Score 2, 3 or 4 if you think you are somewhere in between:

  1. Leaders are increasing people’s sense of Certainty throughout the change, i.e. they are communicating openly and often, and are displaying confidence and commitment to the change in words and deeds.
  2. There is a clear and compelling sense of Purpose for the change, i.e. the vision for the change is clear, concise and motivating and known to all those affected by the change. Plus it’s clearly aligned with the long term vision and values of your organisation.
  3. People affected by change feel in Control of their destiny, i.e. people have been consulted and / or involved in defining the change and / or in deciding how it should be implemented in their part of the organisation. They feel like part of the team rather than victims of the change.
  4. People are being helped to let go of Connections – things that must be consigned to the past for the change to succeed, such as old ways of working, old habits, old relationships and symbols of the past.
  5. Success is being nurtured during change, i.e. effective training is in place with coaching and support to help people through the early ‘teething period’ and up the learning curve. It is ok to ‘fail’ while trying out new ways of working, but unacceptable not to try.

Add your scores together. If you scored:

<12: It doesn’t look good – the chances are you’re heading for disaster – your people are keeping their heads down and hoping it will never happen, if they’re not already openly opposing it.

12 – 15: There is strong cause for concern. People will struggle to adapt, and when they hit difficulties, they are liable to abandon changes and revert to old ways.

16 – 19: You’re doing ok – with more focus on your areas of weakness you can still pull it off.

>19: Well done – you have an excellent chance of success. Unless the change itself is fundamentally flawed! However, with such and engaged workforce they’ll have pointed this out already and come up with a better solution.

For more details take a look at . Alternatively, you can read ‘The 5 Forces of Change’ or ‘5 Tales of Change’ both by Anthony Greenfield and available on Amazon.