The Subtleties of Changing Culture in Financial Services

Originally published on Thomson Reuters © 2013


The difficulties facing financial services organisations at the moment are potentially overwhelming. Rapidly changing marketplaces, the tightening grip of regulation and regulators, evolving customer demands and profound demographic shifts are combining to reshape the sector. Amid such complexity, changes to culture and values have been heralded by many as the solution. It has been said that leaders who can drive cultural change will deliver the financial service of the future. While cultural change is undoubtedly required, focusing on that as the primary lever for change could have disproportionately wide repercussions. This article seeks to explain why, and to suggest other areas on which financial services organisations might focus.

A company culture cannot be traded as if it were a used car, for all its blemishes and benefits the culture ‘as is’ is what has been created over time by trillions of interactions between people both within the organisation and outside of it. The culture will have been shaped by the purpose for which the organisation exists, influenced by the way power and authority are distributed and stored as exchanges between people as the way things get done. It cannot be easily changed because it cannot be readily described or defined. Ask people in an organisation to describe ‘the culture’ and they will often struggle. Words feel insufficient to convey culture because it is the experience of one culture relative to another which counts and, like many experiences, how someone experiences the culture of an organisation evolves over time and, does not readily lend itself to black and white definition.

The foundations of cultural change are conversations about the organisations’ strategic and commercial imperatives. Commercial imperatives come in many shapes and guises but are rarely appealing if they are only defined as financials, and certainly will lack depth and meaning if generated purely top down. Connecting with employees through conversations about the core purpose of an organisation, their ability to deliver to the needs of customers and their hopes and fears for the future of the organisation will identify deep seated beliefs and long held assumptions, and may help to identify opportunities for change. Handled well, these conversations should help to release tension and unlock much needed creative energy, which will fuel change.

If such conversations are to be effective they will need to be hosted by leaders who have the requisite empathy and skill to lead group discussions, so that organisation-wide issues can be explored in a way which does not leave group members feeling psychologically exposed. All organisations and groups have social norms; these form the basis of culture. If participants in these conversations are to feel safe, the group will need to be facilitated in a way which suspends cultural and social norms, with the purpose of learning and gaining insight.

In these settings, authority figures must become facilitators and process managers, participants must be motivated and committed to new learning and authority figures must adopt egalitarian norms emphasising that learning is mutual responsibility. The process must involve a two-way dialoguing about concrete experiences and feelings.

Dialogue is a form of conversation that allows participants to relax sufficiently to be able to examine the thought process behind what they say and what others are saying. Instead of trying to resolve problems quickly, the dialogic process encourages slowing of the conversation and suspension of the need to win arguments. In a dialogic process encourages slowing conversation down and suspending the need to win arguments. In a dialogue, if one disagrees with something that is said, suspension would mean holding back voicing the disagreement and instead silently asking oneself why one disagrees and what assumptions one might have about the disagreement. Paradoxically, when one identifies one’s own assumptions and filters first, one becomes a better listener and finds oneself able to focus on the subtleties of what others are communicating.

Techniques and settings that reduce eye contact like focussing all eyes all on a ‘campfire’ can help to generate dialogue. The absence of eye contact makes it easier to suspend reactions and disagreements, objections and other responses that might be triggered by face-to-face conversation.

For some organisations and cultures the very idea of suspending authority and slowing conversation will be met by instant reluctance. The fear of taking up too much time, and of conversations that go nowhere, can often underpin such irrationality. A good change leader must focus on desired outcome, which is to create an environment in which people get behind the need for change, feel safe to contribute creatively to the agenda (regardless of hierarchy or status) and encourage others to do the same.

Small and significant behavioural changes in how groups work together can deliver change. Studies have shown that only 10% of people who have major heart surgery make sufficient modifications to their lifestyle and diet. In short knowledge, no matter how convincing, is not enough to change people’s behaviour; being surrounded by people who are doing things differently is what will drive sustainable change. 

Engagement at all levels

In an industry that has been dominated by leaders whose primary competence is numerical and who believe that regulatory lenience and the pace of business transaction are the way to success, there is much work to be done. The leaders who deliver cultural change successfully will be those who garner the competence of facilitating groups in which social norms are suspended and participating individuals can contribute to commercial and strategic imperatives with equality, regardless of hierarchical position, financial value or tenure. It is this level of engagement with people from all walks of life which will create a financial services sector that serves society well.

Ali Gill

CEO, Crelos Ltd