External Motivations: The Royal Commission into Misconduct in the Financial Services Sector in Australia has highlighted and indeed helped drive the need for cultural change in the financial sector. It’s possible that might work however not easy. There will be significant changes though often it is what remains the same that is as important as what changes. This short discussion identifies just five impediments to deep cultural change in the industry.
The five impediments identified are not intended to be comprehensive however, they do serve to illustrate some of the challenges. What can be done from a culture change perspective will also be specific to orgnanisations and can be the topic of another discussion. It is important to understand the issues first.
Setting The Scene And What Can We Expect?: Culture is often defined as ‘The way we do things around here!” That’s true enough and the universal nature of the statement suggests that just about anything you do can influence culture one way or another. That has been foundational to nearly all my professional work. And the financial institutions will be doing a lot following the Royal Commission.
Expect Textbook Corporate Responses: Much of the response will be good corporate stuff : action plans based around the Royal Commission findings; public relations releases; interviews with a polite, conscientious, empathic CEOs; divesting now unwanted businesses; reviewing remuneration strategies; fixing IT problems; changing a few executives; learning to live with a more active regulator; winding back the aggressiveness of the sales culture (at least for a while); convincing the public that the banks and others are not really the bad guys, etcetera. The largely ‘virtue signaling’ corporate programs of social responsibility, sustainability, leadership and core values will probably be ramped up and just maybe taken more seriously. Some of what will happen will be uncomfortable, regardless it is all pretty well understood and a variation of what organisations do now – it will all be implemented within the same paradigm. In the public arena, some executives being charged with criminal offences will mostly be new (if it happens), and the bank boards will themselves face a decision regarding how much support (direct or indirect) they (shareholders and investors) will fund for these executives.
Do you think people are getting smarter? Do you think we know more about the risks inherent in running economies and businesses? Do you think we will look to others to work out what we should do? Do these sound like loaded questions? Of course they are, however there is a point to be made. Knowing more doesn’t stop us being human and making the same errors people have in the past. The context and details may differ however the errors are the same.
History Repeats Itself
In early 18th century France an investment bubble developed around shares in the Mississippi Company. Trading over a period became frantic. Normally sober people found themselves investing and those who recognised what was happening were sometimes mocked and just as often developed significant doubt about their attitudes to the trade. At dinner parties, being the only person who seems not to be making great profits can be a deflating experience. Even the person responsible for the float of the company could not dissuade people from being overzealous. Of course the company went bust. It is all beautifully chronicled in Charles Mackey’s entertaining “Extraordinarily Popular Delusions And The Madness of Crowds” published in 1841. It’s a great read as an introduction to what would now be referred to as behavioural economics. And more importantly to draw parallels to the boom phase that led up to the crash in 2007/8. There is the possibility it could be applied to the inflated Australian markets as well.
When change is the norm then it goes unnoticed (and mostly unrewarded), often with unintended consequences.
Anyone who has a school-age child will have asked, “What did you do at school today?”. The typical answer is, “Nothing”. As adults are we all that different or are some things part of the human condition? Continue reading →
In any change situation there is going to be better results if there is reliable, valid and timely evidence and feedback. And who has access to that can make a profound difference.
This is what my head told me I was doing!
Brisbane has long history of producing world champion swimmers (Leisel Jones, Keiren Perkins, Hayley Lewis) and many more have trained here. I’m not one of them. I’ve been encouraged and given feedback as I happily churned out a few laps at the University of Queensland pool or perhaps the Centenary Pool. Keep my head down, lengthen my stoke, reach out more, keep my hips higher, increase my kick rate and breath both sides. I worked at everything I was told and there was almost no improvement in my results. I thought doing it harder and getting stronger would help. It didn’t, at least not much! Then something important happened.
Dust off your archives and check out where you’ve been. There can be lost gold.
Over years it’s easy to forget even the really useful things. Then one day you rediscover them and wonder why they disappeared in the first place. Nowhere is this truer than in the corporate world.
New business trends and ideas easily swamp us seemingly rendering older ideas obsolete. Employee Engagement has been a big thing for businesses over the last 10 years. To go with that has been a head-spinning number of ‘models’. Just search ’employee engagement models’ and then click on images. There are hundreds of illustrations of employee engagement models and a quick scan can give a good idea of how diverse the models and language can be. That all points to an idea with some theoretical underpinnings, some will be well researched however there will be a lot of work relying on surface validity (it seems to make sense). However, for this post, it is about what gets forgotten in this emphasis. For me looking at the engagement literature reminded of good work done in the 1970’s and 80’s on job design which gets very little or no explicit mention in any of the models. Even the term job design sounds so last century, mechanistic, old-fashioned and too slow for this agile, divergent, disruptive, digital age. That is rubbish of course, every job has certain characteristics or a design if you prefer. (Regardless, the whole topic was swamped by four ideas that were believed to mediate motivated performance, the belief that the nature of work was changing, the opportunity for social contact, the person’s actual skill levels, and ambition. If you’re interested then read this 2010 article by Greg R. Oldham and J. Richard Hackman. )
Kate Ceberano in concert has almost nothing to do with this article however you can bet both the wonderful bassist and Kate have had a lot of coaching and performance opportunities. And I just loved their performance and the photo.
Coaching and counselling opportunities have provided both professional highlights and disappointments. Some opportunities were specifically commissioned while others just occurred within or around ongoing consulting work. Early cases that motivated and changed me were mainly the second type and usually when there was sufficient time. The following is one of the earliest I remember well. I was involved in a restructuring initiative and temporarily had line responsibility.
Rod was mid to late twenties in a clerical administrative role working in an investment organisation. He was sharp, sarcastic, wary of the executives and labeled by those executives as disrespectful, rude, lazy etcetera. He was also articulate, insightful, well read and Continue reading →
Our brains are well conditioned to see what they expect. Image from: Illusions.org
We all make the mistake, even when we know better. If something is good then more must be better. A nice, straight, linear relationship … except it’s not … and very rarely is! At some point exercise will just injure and fatigue us, the extra serve of ice cream stops being a treat, working longer doesn’t improve your work performance and trimming more costs can make matters worse, etcetera. In these cases, there’s an inverted U relationship. Recognising when something else is going on can make you a better consultant, manager, and person.
Our day to day lives makes us familiar with other relationships in specific situations such as recognizing some diminishing returns relationships. That is, doing more will lead to improvements but less improvement for the same increase in effort. Weight loss could be an example. Another familiar relationship is in consumer pricing where the addition of more benefits and features leads to big increases in price (a logarithmic relationship). Mostly we’ve learned to expect these relationships and they influence how we think in a variety of situations however there is any number of things where we don’t know what to expect. We can’t be so certain what the relationship is. When that happens then logical errors are much easier to make e.g. if the threat of jail stops some crime then increasing the harshness of sentences will stop more crime. Perhaps, I don’t know exactly, however, the US has the death penalty and a very high murder rate for a western country, so maybe not. Perhaps you have to do other things if you want the murder rate to come down.
Very few social relationships will be as simple as those above and yet often we act as if even these are too difficult to consider.