Posted: 15th April 2013
Culture is one of the most discussed topics in financial services firms of the last 12 months. The FSA has run business risk awareness workshops emphasising influencing factors in culture such as leadership behaviours, appetite for risk and remuneration mechanisms. Recently, and to great media attention, Barclays signalled its intention to transform its culture becoming “values” driven. Achieving a change in culture takes time. For those taking on the challenge of culture change, with the ever present pressure to deliver short-term profits, time will seem in short supply.
Companies must show considerable courage to invest in transformation programmes that, by their very nature, are not quick-fix solutions. In the mid 1980s British Airways invested two years and millions of pounds in changing the mind sets of its employees, listening to customers, developing its workforce and amending its processes. At the end of two years the airline felt confident with the work it had done to change internal perceptions, develop the skills and confidence of its workforce at all levels with the outcome that it could go to public with the message: “we’ve changed; come and try us.”
For British Airways investment in ‘Putting the Customer First’ – the name of the transformation programme – was a commercial imperative. With losses of over £300m each year and government intent on privatising the airline, it had to change. In just over two years British Airways turned loss into profit, achieved successful privatisation and became a case study in how to transform a business that had lost its direction.
The question for the financial services is this: will regulated firms give themselves the same licence to pursue a policy with fundamental long term gains? Will senior management across the industry invest now in cultural change and wait patiently for the return? The media response to Barclays’ announcement has been positive and the feeling is that City investors will be equally welcoming. Is this the future for retail financial services?