Culture is everything when it comes to responsible,
long-term business success.
Culture is what exists before any given leader
shows up, and it is what exists after any given leader moves on. Culture is in
the DNA of an organisation. It is not something that a leader necessarily goes
out and creates. A leader’s job is to discover, communicate and reinforce
culture. If you don’t get culture right, nothing else matters.
Many of the financial services organisations that have gone
astray recently have done so because they lost touch with their culture. They lost touch
with their stewardship mission, purpose, values and responsibilities; core elements of the historic culture of the financial services industry.
What we need to do today is not so much invent or create a
new culture for the industry but find the way back to the culture that should have
been there all along.
Most financial services firms have a culture that at some
point, somewhere, was about serving the needs of their clients. It was not just
about making money. It was about helping clients achieve their objectives,
promoting economic growth and performing a social good. Chances are the people
at the firm came to the firm because of the chance to make a positive
difference in the world. That ethic is used to be embedded in most financial
institutions. Unfortunately we have just lost touch with it in too many cases
recently.
As Sir Mervyn King, Governor of the Bank of England, said recently: "Motivation does not come from financial incentives alone. Again, the financial sector has done us all a disservice in promoting the belief that massive financial compensation is necessary to motivate individuals".
As Sir Mervyn King, Governor of the Bank of England, said recently: "Motivation does not come from financial incentives alone. Again, the financial sector has done us all a disservice in promoting the belief that massive financial compensation is necessary to motivate individuals".
Restoring the culture of financial institutions to what it
ought to be is the number one leadership challenge right now in the financial
services industry. Regulatory reform is not enough. If we are going to keep
future financial crises from happening, we have to address cultural failings at
the heart of the financial services industry.
Whether or not we get it right will be a case study in leadership for years to come.
Whether or not we get it right will be a case study in leadership for years to come.
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