The Royal Commission into the Financial Services Industry shocked us all. Commissioner Hayne’s findings and recommendations make for difficult reading. Executives have the opportunity and, therefore, obligation to look into the mirror and ask ourselves what we can do to make this better.
Prior to 2018, people knew that corporate conduct in the financial services industry was far from ideal. The Royal Commission, however, exposed the full extent of this misconduct. We were forced to stare the consequences of organisational failure full in the face.
Of all the damning stories of greed, immorality and abuse of power, one thing stands out from an organisational mission perspective.
Hayne concluded that “providing a service to customers was relegated to second place.”
The Culture – Conduct Divide
The customer is at the foundation of everything we, as executive leaders, do. It is the essence of our organisation’s existence; we cannot thrive without our customers. I don’t think any executive should doubt that the customer is at the centre of the work we do.
This Royal Commission tells us that something has gone wrong.
Even the most customer-centric organisational missions have been pushed to one side. Other forces have rendered it redundant and fostered a corporate culture based on self-interest.
A cancerous workplace culture as emerged to which we have been blind. This manifests in the fact that, according to the 2019 Edelman Trust Barometer Survey, only 52% of Australian respondents trust business.
It is unfair for the media to place the entire blame at the executive level; most of the time, our personal conduct has not been at fault. However, it is our responsibility to make sure that the behaviour of other employees is grounded on the same customer-based organisational outlook that we want to possess.
The buck stops with us; we are at the forefront of Australia’s corporate rebuild.
A Top-Down Approach to Workplace Culture
If there is one thing to take from the Royal Commission, it is that the current approach to fostering customer-centric attitudes in employees is not working. This is clear from Gallup’s 2018 research into the ‘Real Future of Work’; only 33% of survey respondents said that compliance training had an impact on their conduct with customers. It takes more than telling someone what is good and what is bad to get them to change their behaviour.
Executives need to encourage an alignment between organisational goals – especially those related to customers – and the personal goals of employees. By doing this, normative standards will change. Employee conduct, naturally, will follow.
Here are three specific measures designed to create this organisation-wide engagement.
- Focus your team on a higher purpose
The problems outlined by the Royal Commission stem from employees focusing on their day-to-day responsibilities without considering the long-term impact of their work.
If structures facilitating transparency and accountability are developed across the organisation, employees will be constantly reminded of the connection between their work and customers.
This will ensure that the values you hold as an executive flow down through the organisation as a whole.
- Redefine your customer priorities
Traditionally, organisational missions have been based on customer experience (NPS). That is, if the customer leaves happy, the goal is achieved.
Instead, employees must be encouraged to act as guardians of customer interests. Rather than focusing on the customer’s mood at the end of their interaction, the employees should focus on the long-term impacts of their actions to ensure that the customer is not disadvantaged in the future.
- Reward conduct based on the process, not the result
An ultra-competitive workplace culture was pinpointed by Commissioner Hayne as directly responsible for much of this crisis. In particular, he highlights how remuneration policies rewarded employees based on the outcome of their work in terms of financial gain. This procured a ‘whatever it takes’ attitude among employees, whose conduct was guided by self-interest above all else.
If organisational structures are redesigned to privilege care for the customer, this dangerous attitude can be rendered null.
These steps illuminate the path towards change. It is up to you, as an executive leader, to take the first step. You might not be personally at fault for these problems but you certainly have the responsibility to help fix it.
We are currently at ground zero. You have the skills to make this rebuild a positive one.
Encouraging an alignment between organisational goals and employee conduct is an important element of facilitating engagement across your team. If you are interested in developing skills to foster this engagement in yourself and in others, please contact Melinda Fell.