Creating the right culture


Culture starts with those at the top of their association, company, trade body, or other organisation, and transcends through employees to have an impact on customers.

Certainly Gruenter and Whitaker’s view, often echoed by individuals at the top of their game, demonstrates the way in which a corporate culture seeps through the organisation’s employee structure: “The culture of any organisation is shaped by the worst behaviour the leader is willing to tolerate.”

And amen to that – it’s not something to be disagreed with: Simply put, if you have all the correct values in place from top to bottom, and the correct checks and balances to ensure they are upheld, then that success is likely to be replicated throughout the company, with satisfied customers that are treated fairly and who want to continue a business relationship.

A good corporate culture will therefore reflect positively on a company’s client and customer base. Clients will know that they are enlisting the services of a professional and well-trained organisation, and one focused on meeting their particular needs.

The impact of the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) is certainly helping to steer companies towards strengthening their sense of accountability for misdemeanours and general ethics and conduct relating to corporate culture – and this is to be welcomed.

The Senior Management Regime, which comes into force on 7 March 2016, is the resulting instruction towards senior individuals in companies, and it follows on from important recommendations made in 2013 by the Parliamentary Commission on Banking Standards – the body that, for obvious reasons, has wanted to pull in the relatively free rein that banks were previously given. At the heart of the new regulation are rules applying to senior persons or certified individuals within the company with whom ‘the buck stops’, ensuring a chain of accountability and helping to ensure they act in an ethical and credible manner. The Senior Management Regime will now encompass the newly FCA regulated Consumer Credit Sector and so will have impact across the breadth and depth of the financial services sector.

How will anyone know that what a company ‘says’ is actually what that company ‘does’ in terms of improving their behaviours?

The three-pronged scheme will place increased emphasis on high-ranking company individuals: senior managers who will be governed by new ‘conduct rules’; individuals with influence who must be registered with the FCA and gain certification of their accountability; and board members, who are to be directly influenced by the main body of the regime and its workings.

So why is it needed? It goes much further than the whole ‘bash banks back to ground zero’ idea, since all industries are affected. But how will ‘change’ be measured? How will anyone know that what a company ‘says’ is actually what that company ‘does’ in terms of improving their behaviours?

If a company’s managers, whether that is high-ranking board members or others in senior positions directing ‘general’ employees, are tolerant to low-level passive-aggressive actions, including simple matters such as being late to a meeting or perhaps using social media to contact friends at work, then there is likely to be a negative impact on their customers.

So managing the behaviours of frontline staff in this regard is important, but equally so are the examples set by the managers, who simply would not garner any respect from the bottom rungs if they were complicit in the same activities. Clearly, this would have a negative effect on the customers – perhaps through unfair treatment – where shortcuts may be taken and all correct and necessary information withheld; not a viable business proposition in an age where accountability and transparency, which go hand-in-hand, takes precedence.

I accept that few of us like confrontation – after all, we have to work with colleagues and want to make the all-important ‘working relationship’ as easy as possible. But it is crucial for a company to develop a particular dynamic where the ‘actual’ (hierarchical) leaders blend with ‘informal leaders’ (i.e. a respected individual from any section of a company’s hierarchy), who can address any low-ranking culture related problems before it spirals out of control.

Perhaps this is what Gruenter and Whitaker were alluding too: talking about ‘leaders’ in a broader sense than simply those in an organisation’s upper-echelons, and speaking inclusively of all ‘types’ of leaders.

On the face of it, the FCA and PRA’s new regulations appear to be coming from a ‘top-down’ perspective. But it is important to note that a company’s ‘input’ is not directly measured by the trade bodies whose central focus is on ‘output’. Yet it is precisely an organisation’s input into their culture that needs to be measured in order for the authorities to gauge a proper understanding on whether the regulation is having an effect. For there will be a much more subtle effect than may be expected – with employees being engaged at all levels to place the customers at the heart of what they do, and from that will come success.

That is just one of the many reasons why training is such an integral and essential part of an employee’s development.

Training is not just for those who are new to the company or lacking experience. This is an unfortunate but common misconception held by those who have ‘all the industry experience’ and are in those senior or board-level managerial positions. In fact, training needs to be a continuous journey, allowing senior executives to keep pace with changing times, technology and thinking, to have a thorough understanding of the latest processes of the company in a manner that is well-regarded and respected by their employees. Just some of the topics which we are currently delivering through our own Level 5 Diploma in Compliance Risk Management are examples of key areas of development, including: managing change and creating, developing and sustaining a culture of Continuous Improvement.

Training – and creating the right internal cultures – are also key to understanding Treating Customers Fairly (TFC). Corporations that place the customer at the heart of what they do will see dramatic improvements in how their company is perceived, and in the treatment their customers will receive.

The Senior Management Regime will drive companies to look at their internal cultures, and focus on the end-user of whatever service they are providing. In the end, customer-centric cultures help to create an inherently viable, ethically-minded and profitable business.


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