Banking Royal Commission

The Royal Commission into banking failures says culture is a problem. I disagree. The problem lies with the behaviour of people which in turn creates the culture.

The final report by the Banking Royal Commission in Australia argued problems with the  banking and finance sector can be attributed to poor culture. But could the real cause of the issues have more to do with poor organisational purpose and a lack of sound character? Does a purpose which encourages risk taking foster a culture focused on profit and performance? Do your people know how to behave as leaders? Are they men and women of character?

The National Australia Bank announced their new purpose in 2017 (with much fanfare): we back the bold who move Australia forward. This got my attention and caused me to wonder firstly how that fit with the purpose of a bank and secondly whether it would encourage risk taking — a concern which Kenneth Hayne expressed at the Royal Commission. Events since indicate the purpose was not something new but essentially a statement of the prevailing culture — i.e. the bank may have already been encouraging boldness and risk taking. Your purpose tells people why you exist, and encourages them to act in a way to fulfil that purpose.

Furthermore, I believe culture is created by people in an organisation and reflects the character of the individuals in the organisation. Can you think of those companies or perhaps sporting teams that have a poor culture? You probably think of people rather than buildings and systems. Quite clearly organisations that encourage people to be good human beings who care for each other and who do the right thing by their customers and their community, become better organisations.

The organisation changes because people change. You cannot drive culture change by ‘telling’ people how they need to change. You drive culture change by having a noble purpose which is bigger than the organisation, which is directed toward service in some manner, and then by creating an environment where people can be their best selves: men and women of character.

What might be the elements of good character? Honesty, integrity, care, commitment seem like a good place to start. Pretty basic but fundamental. (And if you are anything like me, a lifetime’s work).

Contact me if you want to talk about teaching your people to behave as leaders, who role model the kind of behaviour you aspire to.