The joint Cass Business School in London and New City Agenda Think Tank (which is cross-societal and counts Justin Welby, Archbishop of Canterbury, as a board member) has conducted a recent study into banking culture, published in the FT, questioning how effective large scale culture change programs really are and suggesting it could take a generation for real change to take hold. The effectiveness of major change programs that a number of banks are invested in called to question because most of the cultural messaging is “getting lost in the middle” the study claims.

As fines for major banks are mounting in relation to fines for mis-selling of payment protection insurance (PPI), LIBOR interest rate manipulation,  interest rate hedge mis-selling, manipulation of forex markets and global forex scandals and dark pools charges that are still being investigated, the questions will mount about the pace of change. The banks involved in these fines include HSBC, Lloyds, Barclays, RBS, BNP Paribas and others all of whom are large respected global banks with generally honest and ethical people at the top, committed to change. So why is change taking so long to take hold?

The rogue trader who has self interest and greed at heart is easy to catch. But some of the recent misconduct cases had nothing to do with rogue traders but instead in strategies that were flawed. Change will come from banks paying closer attention to the behavioural consequences of the growth strategies they pursue. Put simply when organisations are created where ‘selling more widgets’ is the way in which an employee and their manager’s value to the organisation is defined, monitored and rewarded, the organisation creates unintended consequences.

Greater regulatory controls and codes of conduct cannot address these issues. First it is how Banks recognise the behavioural consequences of their value creation strategies that must be at the heart of any change effort.  Second scalable solutions for ‘enterprise conversations’ in the middle layers of organisations need to follow to help middle managers become more skilled in managing and role modelling change. The FT report referring to the Cass Business School study:

So we add to the Cass Study by asking if enough attention is being paid to the systematic review of the behavioural consequences of banks’ growth strategies. Sadly much of this is being thrust into the hands of the compliance, risk and audit functions of banks who may not be adopt as nuanced an approach as is required to understand the behavioural drivers of change or the immunity to change.
Written by Meena Thuraisingham, Dec 2014, currently undertaking PhD research into the oversight that board directors provide for the value creation strategies of the companies they govern at RMIT University, Melbourne, Australia  

Written by Meena Thuraisingham
Director and Principal, Talent Invest

Meena Thuraisingham is a consultant, author, executive coach and thought leader in the area of People and Culture. An organisational psychologist by training, she founded TalentInvest, a niche consulting practice, advising global clients in the UK, Asia and Australia in Capability and Culture. Meena is also a regular speaker internationally on leadership effectiveness and culture change.

Her published books are The Secret Life of Decisions, Careers Unplugged and Derailed!. Get Your Copy Today