In the past 20 years most financial services providers and regulators have delivered leadership and culture programs, with annual reports extolling the virtues of initiatives to put customers at the centre and bring their organisational values to life. Over that time technology has significantly changed the nature of our work.

The truth is we have not fulfilled our promises – the shortfalls many institutions have had in meeting the law, community expectations and their own expectations are well documented, including in the self-assessments that the Australian Prudential Regulation Authority (APRA) required many financial services organisations to undertake.

A strong, ethical and sustainable financial services sector is critical to the standard of living Australians expect. Now that the culture wave has crashed, customers, policy makers, regulators and investors are asking us to be different. We should all ask a big question:

What do we need to do differently from the past 20 years to ensure leadership and culture-building delivers better results?

As a leader of many leadership and culture programs, I have done some serious self-reflection, as all of us in the sector must do to deliver better outcomes.

Here are my thoughts about how we might do things differently.

1. Play the long game and the short game for real

Culture is the long game. Leaders’ shadows are long, so we must commit to and demonstrate personal change if we want to see it in others. Employees follow their leaders and notice nuances in actions, words, expressions and body language. Their belief that things will change is built on the trust they develop interacting with leaders over time.

This means that we must commit to seeking feedback and adjusting our behaviours, not just in training programs but every day for our whole career. This will require humility and letting our egos go.

The short game includes calling out others, giving feedback and holding them to account for poor behaviours, even if they are delivering the numbers. We have all seen the toxic effect not taking these actions can have. Assessing people on values is part of most performance management systems, and companies will point to that as proof they live this principle.

This principle is best tested not in a performance management system but in the moment when the behaviour is visible. Encouraging feedback from other leaders on their behaviours and those of their teams is helpful. Financial services is a team sport: everyone is responsible for helping others be their best.

2. Focus, make it real, and align, align, align

At any time there are likely many initiatives underway in your organisation to improve business outcomes, all with their own program sponsors and executives seeking a new culture, whether it be regarding service, agile, innovation, inclusiveness or risk. This can cause confusion as frontline employees and middle managers get mixed messages about where to direct their focus.

Be clear about desired behaviours and focus on the few that really matter. Describe the behaviour change in a way that is directly relevant to a person’s work, so they can see what needs to be different, not just broad behavioural descriptors. Make clear why those behaviours matter and how they will improve the experience of either the employee or the customer. Align program streams to make it simple for people to connect the dots and behavioural asks. This requires constant effort and monitoring, not a one-off mapping of behaviours.

3. Design for humans and give employees agency

Culture is ultimately about people’s experience in solving problems and the mindsets and behaviours that help them. When you are one employee among hundreds, thousands or tens of thousands, it is common to think you cannot impact the organisational system, which can lead to inertia, distrust and entropy.

Often when we design organisational systems we default to control. Think about a call centre: we have KPIs to keep people on the phone (to meet more needs) and KPIs to get people off the phone (reduce call wait times). We then have supervisors direct employee time depending on which KPI they are focused on. Imagine if we designed a KPI and supervision system that enabled employees to track their own performance and adjust their call times based on the needs of the customer.

Using human-centred design that incorporates quantitative and qualitative data can reveal powerful insights regarding employee and leader decision-making. Similarly, using design thinking to ideate and prototype solutions can test what will help people adapt to new mindsets and behaviours.

In designing an organisational system, build in ways that enable individuals to make a positive impact, aligned with their values, and see the results of their actions, providing transparency of important data to help them refine their actions.

4. Be a purpose-driven, system-wide leader

Critical roles for leaders are to create a compelling purpose and vision, bring people along and align the organisation. Along the way, leaders must fulfil the organisation’s promise. The importance is multiplied when organisations are complex and rely on technology to deliver services to customers, both internal and external.

Some customer failures can be attributed to system errors built into programming or to the execution of decisions. Leaders often say that they are not a detail person or that they are the vision-maker. The truth is, today’s complex environment means being one thing or the other is insufficient.

Leaders need to pay attention to all aspects of their business. It is better to define yourself as a holistic systems leader, playing to your strengths, developing in areas you are not strong and ensuring there are systems, accountabilities and people in place to ensure you keep your promises.

5. Expand your learning circle

As humans, we all bring preconceptions to a situation or to data points that feel uncomfortable. But it is unhelpful to have a fixed mindset when exploring data, receiving feedback or developing improvement strategies.

Ensure your exploration includes challenges from inside and outside the organisation, including from customers, suppliers, consultants or analogous companies or sectors. We have previously talked about what banks can learn from an unlikely source – the Navy.

Already many financial services organisations have learned a lot from other banks, the tech sector and other service sectors. But they can also learn from other sectors that face similar high expectations and tight regulation, such as health, aviation and oil and gas. These sectors have also had great success in creating safety cultures in environments with high operational and human risks, where understanding human motivations and decision-making influences is critical.

Leadership and culture are the critical enablers for financial services to deliver on the promises we have made to our customers and communities. Let’s not squander the opportunity by doing what we have always done – let’s challenge ourselves to create truly customer-centric organisations that deliver on the expectations of all our stakeholders.

Get in touch to discuss how we can work together to improve leadership and culture in financial services organisations.

Our Leading Edge series features fresh thinking on leadership in utilities and infrastructure, financial services, higher education and schools.

Published on 2 March 2020.