Even before the notion of “the global marketplace” became a buzzword, banking organizations of all varieties understood and recognized the role of culture and diversity in doing business overseas. But culture isn’t just an international phenomenon, nor is it one driven entirely by geographic and ethnic boundaries. And while banking leaders may recognize the importance of culture and diversity in the international marketplace, they frequently overlook the role these forces play in their own backyards.
Why is this so? It isn’t because the idea of corporate culture is strange or alien to them (it’s been around for decades now); rather, it’s typically because they may not understand: (1) the connection between culture and diversity, (2) that the true scope of culture and diversity goes far beyond traditional issues like race and gender, and (3) that both culture and diversity must be actively managed to maximize organizational effectiveness.
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Culture is Everything
Webster’s defines culture most generally as “the sum total of ways of living built up by a group of human beings and transmitted from one generation to another.” This is true of geographically based cultures, and it’s equally true of the firmly embedded corporate cultures one finds within today’s financial services organizations. Culture embodies virtually everything that defines a particular organization and the people within: their attitudes, goals, behavior, thinking styles, and their vision of what the organization is and where it’s going.
Even the internal markers for success are determined largely by culture. For example, who will be listened to and whose ideas will be taken most seriously? Which employees will be promoted most quickly? What types of attributes are valued most? Culture, for better or worse, provides unspoken answers to these important questions.
Corporate culture is much more pervasive than most people realize. Contrary to the opinion of some, it isn’t a fad or a business initiative that can simply be chosen or declined. Culture is a byproduct of human nature, and as such, it exists now, it will exist in the future, and it will exert powerful influences on the organization whether it’s “planned for” or not. The key lies in making sure those influences are positive rather than negative—making sure culture emerges as an asset rather than a liability. Indeed, fostering and supporting the right kind of culture is the true challenge facing leaders today.
Drawing Strength from Diversity
Differences, almost by definition, create complexity and tensions in the workplace. This too is part of human nature. But while these tensions can have negative results, they can also be an organization’s greatest strength—if the organization’s culture is one that values and encourages people to actively manage diversity as an asset. The problem in this equation is that the topic of diversity is all too often politicized and tends to focus on more obvious issues such as race and gender.
These differences are important, to be sure, but they do not represent the whole picture. Within the context of culture, diversity can in fact encompass any dimension or attribute that makes one employee different from another, whether it’s their thinking styles, work habits, their approach to solving problems, or anything else.
Another issue that often clouds the culture discussion is the flawed assumption that diversity and inclusiveness are only valuable to an organization’s culture on an emotional level— because they are “fair,” because the are “just,” because they are “the right thing to do.” While they may indeed be “the right thing to do” for reasons of fairness and equality, they also make good economic sense. A culture that embraces diversity and inclusiveness is one that can yield real fiscal benefits that have a direct impact on the organization’s bottom line. These benefits fall into three primary categories:
- Employee Performance
Diversity-conscious cultures recognize and capitalize on the differences among individual employees instead of trying to force them all into the same box. For example, consider that timehonored tradition of all businesses past, present, and future: the brainstorming session. Some individuals create and process ideas most effectively by talking them out in real time, others by listening and then taking time to reflect. Expecting both of these groups to reach their full potential under the same set of circumstances would be foolish.By contrast, when the organization’s culture values and recognizes diversity as an asset, the true potential of each and every employee can be realized, not just those who fit a particular mold or profile.
- Employee Recruitment and Retention
Talented, creative people have always been the most sought after (and always will be), but given the highly competitive job market within the financial services industry, financial institutions need to ask themselves if they’re really doing all they can to find and uncover that talent. After all, these existing cultures—many of which do not value diversity—can produce remarkably powerful images and stereotypes of what a “promising” candidate is like. Even though they may not be based in truth or reality, these images can be very difficult to overcome, especially if the culture responsible for them has been firmly embedded over many years.On the other hand, a diversityconscious culture is more likely to recruit, attract, and retain talent successfully because it is not hampered by such narrow preconceptions and stereotypes and recognizes that talent is often found in unfamiliar packaging.
- Employee Loyalty and Efficiency
Barriers and obstacles are an inevitable part of any business environment. How employees deal with those obstacles is largely determined by their perception of the culture around them. For example, if the culture is narrow and closed, one in which they feel that their concerns won’t be addressed, there is a good chance they will keep quiet and leave the obstacle or problem alone. If the culture is open and inclusive, they are much more likely to bring attention to the problem and get it solved.A diversity-conscious culture fosters loyalty and opportunity, both of which enhance employees’ feelings of personal connection to the organization.
The Process of Culture Management
Change is needed. Now what? More than a few wise men have observed that “change is hard,” and this axiom is especially true when it comes to shaping corporate culture. At least part of the reason for this difficulty is the fact that many leaders don’t realize just how entrenched their existing culture is or even how they may be personally contributing to it.
Because culture is constructed of beliefs, policies, and attitudes that are largely unwritten, there is no handbook to consult, no manual to read. Instead, culture is built and reinforced over time by a variety of much more subtle forces—actions, words, thoughts, behavior patterns. Changing these is inherently more difficult than rewriting a handbook. Key steps of this change process include the following:
- Identifying what the current culture is and how it can be improved
This step entails mapping the existing culture—acknowledging its strengths while surfacing the elements that may not support diversity—and engaging organizational leaders in a learning process that prepares them to proactively manage the culture. It also involves identifying and mapping the various subcultures that may exist. For example, the culture of the trust officers is most likely very different from that of the loan officers, and these differences need to be considered when planning the overall strategy.
- Implementing a coordinated ongoing effort, not a one-shot fix
Culture isn’t something that can be changed or managed by sending out a memo. It requires a commitment of time and resources to see it through to completion—and an active maintenance effort to make sure it stays on course.
- Making a personal commitment
This commitment should begin with an examination of how the leaders themselves may be contributing to the very culture they’re trying to change. Personal commitment establishes the effort as something more than a “fad of the month” and helps to overcome the resistance and skepticism of other less enthusiastic personnel. It also serves to carry the effort forward over time since culture management is almost always a long, involved process—one measured not in months but in years.
- Practicing what is being preached
Mixed signals are almost worse than no signals at all because they signify that the organization’s leadership isn’t serious. For example, if it is being openly said that technical skills are going to be valued just as much as people management skills—but nobody known for their people management skills is ever promoted—this is going to send a clear (and ultimately counterproductive) signal to observers.Effective culture management requires everyone to be on the same page, both in the spoken policies and the unspoken behaviors that give those policies meaning.
Putting It All Together
The momentum required to sustain a successful culture management effort may seem daunting, especially for financial services organizations where the collective focus often reaches no further than next quarter’s earnings. However, culture can be changed and managed successfully with the right approach and a sufficient level of commitment from key personnel. Once it has been acknowledged as an issue worth pursuing, both of these elements (the approach and the commitment) can more easily fall into place, and the organization can begin to reap the myriad benefits that a diversityconscious culture has to offer.