Financial institutions have made strides in improving the public’s trust, which plummeted during the recession. And with the COVID-19 pandemic, trust is even more critical, which is why leaders are working diligently to improve the culture inside financial institutions.
The culture at financial institutions is directly tied to the public’s trust. Failures in culture were found to have been a “major driver” in the financial crisis and scandals, and the resulting low point in customer trust.
Managing culture is a continuous and ongoing effort on all levels of an institution. And it goes deeper than coming up with mission statements or slogans like “our customers are our priority.”
Organizational culture is a system of shared values and beliefs that lead to behavioral norms that guide the way people in an organization approach their work, interact with others and solve problems.
More simply put, it is what employees in your institution are expected to do to fit in.
It is the unwritten roadmap that employees follow that guide how they learn from mistakes, make decisions, prioritize work, address conflict and adapt to change.
Especially during the pandemic, financial institutions must be able to respond quickly and effectively to complex issues.
You may have heard the phrase by Peter Drucker that goes “culture eats strategy for breakfast.” The best of plans and intentions from a strategic or tactical perspective will fall flat if they are not aligned and supported by the cultural values of the organization.
For example, many institutions espouse teamwork as a core value and focus on building cross-functional teams. But from a cultural perspective, teams and departments operate in silos and take on a persona of individualism, and there is usually a sense of “us vs. them” across levels such as front-line staff and managers. So, when working on strategic initiatives, conflict arises and causes an inability to make decisions and move progress forward.
So what should leaders do to build and sustain a culture?
First, gain an accurate understanding of the current culture. To do this you need to be objective and remove all assumptions about the culture. Why? Because when culture hasn’t been intentionally managed, there often are several subcultures embedded at different levels throughout the institution.
Think about how individual branches may operate separately, have their own procedures that are different than those from headquarters and interact differently with the rest of the organization. Another area where there can be differences in subcultures can be as simple as between areas such as IT and tellers, or even within a division in a single area such as commercial and real estate lending.
So, what you may perceive as the culture as a leader may be drastically different than what employees feel.
To get a deep understanding for how things truly get done and how people behave, send out surveys, do interviews, facilitate focus groups and observe.
Next, determine what your culture needs to be, what work needs to be done (e.g., mission, vision, strategies and goals) and what expected behaviors will help get you there.
For example, if your strategy is one that is focused on innovation — releasing new services, leveraging technology, increasing diverse views — then your culture should focus on making mistakes and learning from them, taking risks and sharing ideas.
On the other hand, if your strategy is to build internal reliability, efficiency and scalability, then cultural values should align to providing clarity and structure, following established processes and paying attention to detail.
Once you know what you culture is and what it needs to be, then you determine how your institution will work to close the gap.
It may seem harder to change culture at financial institutions than at a tech startup where change is a part of day-to-day operations. But it is doable if you focus on the critical few that will give you the most bang for your buck, creating the most positive impact in executing on your strategy.
Focus in on both what it is (e.g., efficiency, urgency, taking risks) and what it looks like in practice (e.g., giving people time to make decisions, submitting process improvement ideas, not blaming people for mistakes).
For example, performing “lean” reviews of various processes in financial institutions has helped improve culture.
That’s because, in a lean process review, cross-functional teams discuss each step of a process with the intent being to make the process efficient and remove headaches and roadblocks. The deep dive helps uncover the key drivers of behavior and barriers to goals.
Finally, deploy your new cultural values.
Take the time to communicate, socialize and train against the new cultural targets. Create metrics to track progress and impact. Have your leaders serve as role models for what it means to live out the new culture. Build systems of accountability and recognition for employees. Celebrate success small and large.
And don’t let your foot off the gas — because once you start to ignore culture, it is almost guaranteed to go away.
How Wipfli can help
Wipfli’s team combines deep knowledge of financial institutions with organizational performance experience to provide solutions that can help transform your business.
To learn more, see our financial institutions page or download our culture solutions brochure.
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How culture mirror survey can drive change