Culture is a highly valuable asset and one of the most influential tools an organisation has at its disposal. At its simplest, a company’s culture answers two questions faced by its employees. How do I need to behave? How will I be treated?
Why does culture matter?
The fallout from the financial crisis has emphasised the huge risks of having the wrong culture in place and how the accepted ways of behaving across banking that became an accepted norm ultimately resulted in the near collapse of the industry.
Global firms have the challenging tasks of creating ‘one culture’ across organisations which comprise multiple geographic locations, languages and ethnic backgrounds, and of evolving ways of working. This means that organisations have to allow for more flexible working practices (e.g. remote working), whilst minimising the impact on productivity and risk.
Culture matters because when it is aligned to your organisational strategy it is a reflection of the type of organisation you are promoting internally and externally through your employer brand. It acts as a catalyst that speeds up strategy execution, and your firm will become more responsive, adaptable, innovative and connected. You will attract and retain the best people, who will want to be a part of your organisational culture.
When skilfully managed, it is no surprise that the culture in these firms becomes a powerful and sustainable competitive advantage.
What is Culture?
It’s easy to leave the question of culture unanswered and many people find the whole subject a bit ‘soft and fluffy’ and intangible. Leaders may talk about “building a culture of innovation” or of “customer-centricity” but are never able to define it as crisply as a cost-income ratio.
Culture is defined as ‘the way things are done around here’ and influences everything from how you treat your customers and colleagues; to your colleague expectations and their behaviours e.g. who to please, where and when values, goals or priorities come into conflict.
Imagine the first day at work for a new recruit. Making the best impression and fitting in will be high up on their agenda – but how do they know what the right behaviour is? Through observing the way other people behave, and the priorities they have within the business, a new starter will uncover a lot about the culture of the company and how they themselves should behave.
How can we change culture?
Your people will pick up culture through a torrent of information. The key is to process the different cultural messages through five fundamental channels:
- Role Models: leaders and key individual’s role modelling and leading by example. This is made possible through robust leadership development and capability building.
- Reinforcing your culture every day: through recruitment, induction, training, policies & procedures; so that the right behaviours and values are embedded across all people related activities.
- Incentives: the structure and levels of remuneration; promotions; non-financial rewards and the employee value proposition; ensuring promotion and recognition are aligned to the right behaviours.
- Revealed preferences: what happens on the ground and what it implies about the company’s priorities – defining what is and isn’t acceptable.
- Symbols and fables: symbolic actions and stories with a moral that reinforce values and priorities.
Seven guiding principles for cultural change you should know:
- Principle #1 – Culture should be aligned with your business strategy and direction by embedding expectations across all people related activities
- Principle #2 – Leaders at all levels should drive the creation and reinforcement of culture – for good and bad
- Principle #3 – Uncover the values and beliefs that work “below the surface” first
- Principle #4 – Use your employee engagement survey to identify strengths as an organisation, and then leverage your existing cultural strengths to change culture – e.g. Trust
- Principle #5 – Changing ‘what you can see’ will help you change what’s below the surface
- Principle #6 – For each of your cultural initiatives, think about message, messenger and channels
- Principle #7 – Think integrated and focus on cultural change on all levels (the individual, team and organisation) and in co-ordination with your other business initiatives.
Who would have thought?
The Deloitte Culture in Banking Survey said that 65% of bankers believe that there are significant cultural problems across the industry, however only 33% believe there are significant problems within their own bank.
Executed well, culture change programmes using the above steps not only deliver better bottom-line results, but also provide a more fulfilling environment for employees. An attractive organisational culture leads to the attraction of stronger talent, greater retention, and lower attrition, enabling talented people to drive business results in a highly competitive market context.
It’s neither airy, nor fairy.
Natalie Wharton Natalie is a Senior Manager in Deloitte’s Human Capital - Organisation Transformation and Talent practice with over 14 years consulting experience. Natalie has deep change and programme management expertise with a specific focus in culture and capability development, stakeholder engagement and behavioural change, on large global Transformation projects.
Jill is a Senior Manager in Deloitte’s Human Capital practice with over 15 years’ experience across HR industry roles and consulting with Deloitte. Jill’s specific areas of expertise include HR Transformation and the development of Human Capital Strategies and Cultural Change, Jill works with Banking and Insurance organisations globally.
Pandora’s passion is in culture change; helping clients assess their current culture and target interventions to reach their desired state. She is part of the Deloitte team developing the Cultural Change proposition, addressing key cultural challenges facing Financial Services today.