The need for cultural change in banking is now commonly accepted. However it is apparent, from our work in and outside of financial services, that many organisations still do not fully understand what cultural change entails and how to ensure that change can be deeply embedded and sustained. We have outlined the reasons as to why so many organisations fail to drive genuine, long lasting cultural change in previous articles. In short, it is because organisational culture is misunderstood, not seen to be important or deemed too difficult a subject to tackle.
Why is culture change so hard?
We have looked at the definition of culture previously, but it is important to understand that culture is, principally, a collection of values and behaviours. Breaking down culture into its component parts helps to make culture an easier subject to grasp and to tackle.
Many of us know that personal values (value-systems) influence behaviour. But values can be changed and shaped through the learnings people gain from experience. Behavioural change is therefore the first stop in the journey of cultural change. Once behavioural change starts to manifest, it is important for staff to start to derive value form new behaviours or a new way of working. This value change is required for new behaviours to become the new norm. It is only through behavioural change and then a resultant shift in learned values that you can say a change in culture has begun. Leadership plays an essential role in this process, but attempts to steer culture from above will fail if undertaken in isolation. The new behaviours and values need to permeate every level of the organisation.
It is important to have a clear organisational vision linked to a set of values. This is the point where most organisations stop - but it is very difficult for values to be taught or changed through words alone. A clear set of guiding principles must also be developed, communicated, cascaded and trained through all levels of the organisation. These principles exist to define the desired behaviour of staff. The principles can then be used by leaders to measure and drive the right behaviours. It is essential that all levels of the organisation adhere to the guiding principles. It may be that, following training and coaching, individuals are still not role modelling the expected behaviour. It is important that action is taken to effect change or to manage these individuals out. Unwanted behaviour cannot be seen to be tolerated at any level.
Staff must see and understand how their new behaviour - a new way of working - is something to be valued and sustained. There are a number of ways that this can be achieved: by experiencing a change in working conditions, by seeing (and participating in) the resolution of problems in their work areas, seeing the impact on the customer experience and understanding the effects their new behaviour has on the top and bottom line. Strong leadership, communication and an engaged workforce will dramatically improve this process.
A key challenge of implementing change is measurement. Organisations have many measures such as NPS, customer engagement & satisfaction indexes, complaint volumes and the list goes on. These are important indicators and can be used to illustrate that short term improvements are being made now. However, they do not provide enough evidence to suggest that behavioural change efforts are sustainable. The question is how do you know, with confidence, that the organisational culture sought will last the test of time and not just for the short term tenure of a senior or executive leader.
The existence of principles allows behaviour to be measured. Within Unipart, we use them to create behaviours, values and attitudes that we know are fundamental to our long term success. We know that our leaders are responsible for creating a culture where everyone, at every level, shares responsibility for innovation in order to increase the quality of customer service and the performance and productivity of our business.
At Unipart, we have 18 guiding principles that lay the foundations for the values, attitudes and behaviours we expect from all our people, both leaders and employees alike. As an example, our principle #1 is: ‘We will expect all our leaders to live the Unipart Way philosophy and coach our employees in the tools and techniques’. We measure our staff against this principle too. It means our leaders can’t pay lip service; they need to clearly and consistently walk the talk. They must, first, deeply understand the Unipart Way principles, systems and tools, and crucially they need to actively coach and develop their employees in the use of the systems and tools that form the Unipart Way. We measure the impact of our leaders through continuous audit of our staff in applying the core systems of the Unipart Way in their work. But a simple gauge for our Leaders is to understand what proportion of their day is spent coaching.
How can you apply this in your organisation? You must first be clear in what is fundamental to the long term success of your business. Appropriate principles must then be designed to support the development of behaviours (and their associated, desired outcomes) that will promote and secure competitive advantage. You must also consider how staff behaviour can be measured against, rewarded and enforced with these principles.