July 4, 2012
My column for the CIPD’s People Management publication was published last week under the title Time to start banking on values and was inspired or rather provoked by two incidents on the same day in which members of the public demonstrated their growing frustration with the financial services sector. The article was the latest in a series of critiques of the approach to change within the sector, dating back to 2008 and was written as the libor scandal was finally breaking.
In my latest piece I warned:
“The fact is we have every right to expect our banks to keep the promises they make. Until culture change is taken seriously, CEOs are running the ever-increasing risk that customers, shareholders and even employees will rise to their feet ….. either literally or via the increasingly powerful social media networks, and demand that the leaders of our important financial services brands either demonstrably live by their values or start voting with their feet if they either won’t or can’t.”
However the key details in the article published on friday were soon overtaken by live events as first Barclays chairman Marcus Agius became the fall guy (predictable perhaps) before, (and no-one saw this coming), Bob Diamond himself overtook his chairman in the revolving doors and was uncharacteristically shoved through the exit. The COO del Missier soon followed as the chair then apparently returned to his office to manage the crisis and change process.
What a mess!
In a flashback to the Arab Spring of 2011, what was perhaps most striking for those who followed this unfolding drama using a blend of so-called social media and more traditional news sources, was that the twitterati were infinitely more informed than the news desk editors, tweeting the breaking scoops faster than the journalists could type. As one commentator put it “had the banker in the pinstripes opposite me on the train read twitter rather than his FT, he would know that Diamond had already resigned”
Since people first grouped together to form companies, even the most robust of CEOs have come and inevitably gone. But a unique feature of this corporate drama was that the regicide was played out in public, seemingly every detail exposed red in tooth and claw. Never has my adage that the hitherto deified modern CEO is now simply “primus inter pares” or first among equals seemed more true than in witnessing the demise of this famously dogmatic, much feared and, lest we forget, much respected former Barclays CEO.
A man who counted US senators as friends, who famously and repeatedly told his critics where to go and who lectured the world on the importance of values and culture in spite of the discredited status of many of the big FS brands, was seemingly laid low, not by his detractors without but largely it would appear, by his stakeholders within.
Never has the power of internal comms to decide the fate of a brand been so explicitly proven than now.
Well most of Diamond’s many critics, using rather sweeping generalisations, are somewhat belatedly blaming the apparent Barclays culture and that of the City. Although currently fixated on Barclays, they appear to have belatedly overcome the decoys of structural change and regulation which have stalled much-needed improvement in the sector for almost five years in the process. Yet the big questions persist for all FS brands:
- to what extent is this culture issue less of a banking thing and more of an investment banking thing?
- how wide-spread is it?
- what has happened to the legacy culture associated with career bankers and steady performing stocks that we all relied upon not so long ago?
Culture is an easily abused, undervalued and misunderstood term, much more readily spoken than managed. It is simply “the way we do things” and it is fuelled primarily by three components:
- leadership example
- people processes managed by HR (including performance management & reward and recognition)
- internal communication and the link to employee engagement
Diamond’s hastily prepared address to all Barclays employees, widely published in the media shortly after it was delivered, spoke volumes about his dominant and domineering style. Most importantly, it deepened the crisis rather than addressing it.
In my experience in the change and engagement space, this sort of heavy-handed approach after the fact is hugely disempowering for the most important leaders in the business, the first line managers. And it illustrates the point that corporate culture isn’t the result of big bang, totemic events or actions. It has to be cultivated not prescribed and is the result of millions of everyday discretionary actions by the people who really count, the employees.
Unless the desired culture is properly:
- led (example)
- reinforced (via measurement and reward)
it will most likely be at odds with the brand projected by marketing through allusions to the values; the crux of this problem.
It’s no surprise therefore, that Barclays employees are known to have ridiculed the last communique from their boss, with one famously threatening to “clock him if he showed up in the gym”.
Diamond it would appear, made the cardinal mistake of alienating himself from the people who matter most, his employees, by allowing one of his team to become the undeserving fall guy and appearing to blame his people rather than taking a hard look in the mirror. But imagine the impossible task of his internal communication advisors attempting to sugar the bitter message by warning him of the likely reaction of the staff. It’s tough being an internal change agent at times, as I know well.
Whatever the press may say, it isn’t all doom and gloom within Barclays or within financial services. The Barclays brand is famously robust. The organisation is packed full of quality people who have the ability and passion to permanently restore the faith in banking and bankers.
A corporate culture can be transformed within 18 months if the transformation programme is properly resourced and led. But boy are they going to need some strong internal leadership and some robust, objective, properly qualified external support if they’re to overcome their current tag as the latest whipping boys of the banker bashing media and develop a sustainable, positive culture that can prove their critics wrong .
Culture can and should be positively influenced and synchronised with the vision, mission, strategy and goals. But first it has to be taken very seriously rather than relegated to HR or decried as soft skills somehow irrelevant during a downturn. It has to be treated as both an enabler and an outcome in much the same way as financial and customer service metrics. But there are few signs of enlightened leaders anywhere right now who either appreciate the link or more importantly are rising above the penny-pinching to take positive transformational steps. If they need any more convincing then perhaps they should imagine wearing Diamond’s shoes right now in the face of the internal and external stakeholder mob.
There’s currently much too much talk about establishment reviews and enquiries when what all stakeholders need is action, brand by brand, company by company, starting, if necessary with an alliance between hr; comms and marketing under the stewardship of the truly enlightened CEO.
Clearly the sooner the boards of our leading FS brands get that message the better for us all. Because while some may take a macabre pleasure in the demise of hitherto lauded hero leaders like Diamond and Goodwin and co it’s abundantly clear that if the FS sector sinks much further, we’re all going down with the ship.