Keeping track of a firm’s conduct and culture is perhaps the most elusive metric facing financial services today.
At a recent round-table dinner in London for C-suite bank representatives we discussed culture in financial services – one of our main topics for 2016. What struck me were the many views about what culture is and how to define it, which is all part of the healthy debate we should be having as an industry. It certainly became apparent that, while a firm's culture has always been influenced by the tone from the top, it must now be owned and managed in a much more purposeful and strategic way.
There was much discussion about the role of controls in driving culture (they don't by themselves), the nature of culture (it is endemic) and its successful measurement (difficult but vital). However, there was a hint of ‘after being through what we have been through, it could never happen to us again’; that the fallout and upheaval following the 2008 financial crisis is such a deterrent that nothing similar would happen again.
A big question for me is: are firms taking a structured approach to defining and measuring their culture? Without acknowledging that culture lands in all areas of the business and looking to understand behaviours throughout, there is a risk of relying on customer or employee feedback. This alone is clearly not enough to assess culture.
So, how do senior managers keep track of the culture of their firm?
Experience from around the table suggested that metrics are often open to manipulation. This is why looking at the lead indicators of culture, and how they link with the organisational strategy, followed up with the measurement of results is the way to go. When it comes to measuring culture, the Holy Grail of a consistent and effective methodology lies not only in ensuring that the culture message is consistent across the organisation, but that you can demonstrate that behaviours are aligned to those cultural values.
Grant Thornton is running a series of events on culture in financial services. If you are interested in joining the debate, please get in touch with me on email@example.com.
Words: Gareth Miller, Associate Director, Financial Services Advisory.