It’s been a rough week for the UK banking sector. Again.
Fines for Barclays fixing the LIBOR rate, with at least two other major banks rumoured to have been up to the same tricks. Mis-selling interest rate swaps to small and medium sized businesses. A new proposal for a European banking union, setting the rules from outside London.
The Radio 4 chatter this morning was about culture change. Separating investment banking from retail banking – taking the casino out of the supermarket – is considered a step in the right direction, but banks need to refocus their culture. They need to put ethics back at the heart of their operations.
This was then picked up by Bank of England governor Sir Mervyn King, who said: “We can see we need a real change in the culture of the industry.” Prime Minister, David Cameron, speaking from the EU summit in Brussels, also added his weight to the argument: “British people are crying out for a return to good old-fashioned banking… That’s why the governor is so in favour of changing culture at the banks and so am I.”
So if you are in charge of change management at a big bank, how do you do that? Change management consultants are fond of telling us that it takes seven years to change a culture. The banks simply don't have that long.
What is culture change?
Essentially, it’s people taking different actions.
That may be based on a new set of values. Or, as is more often the case, it might be about trying to get people to behave in-line with existing values that have been forgotten or ignored in the commercial frenzy.
Either way, the key is – actions. For culture change to be real and sustainable, it has to be about what people physically do, not just what they think.
Reminding people about old values, or teaching then new ones, and then letting them go back to their desks, their trading screens or their customer service counters is not enough. We’re habit machines. The old ingrained behaviours will soon rise to the top. Most people will go back to doing the same things they’ve always done and nothing will change.
Culture change is not about telling people about new values. It’s about getting them to live new values.
To evolve a new culture by doing things differently. Put ‘doing’ at the heart of a culture change strategy, and change can happen in seven weeks. Not seven years.