There has been a certain amount of schadenfreude as some of the most senior staff of our banking, insurance and superannuation institutions have copped a relentless grilling courtesy of the current Royal Commission. Yes, watching those highly paid individuals forced to publicly explain their employers’ more questionable business practices has been satisfying, but the process has raised some important points around business as a whole and the pitfalls that potentially await us all.
Amanda Hooten took a look at the cultural, procedural and systemic issues that gave rise to this sorry state of affairs in a recent SMH Good Weekend article. While there were some elements that might be unique to the finance industry (money and status as incentives attracting a certain personality type for instance) there were some more generally relevant lessons:
Defined in 1972 as “a mode of thinking that people engage in when they are deeply involved in a cohesive in-group,” Groupthink is a potential outcome of having a strong culture and can erode critical thinking and personal responsibility. This can result in financial representatives ripping off old ladies but it can also prevent innovation and perpetuate inefficient processes “because that’s how we do things”. If staff don’t feel comfortable questioning the status quo or are conversely too comfortable with current processes and see no need to stretch their thinking, the outcomes are indeed likely to be “sub-optimal”. Your Digital Workplace is a great place for open communication through layers of seniority about new ideas and process improvements.
2. Impacts of Leadership
The prevailing argument when questioned about responsibility in the various moral atrocities that have come to light has been “it’s not my fault, it’s the culture”. The fact is, the stated and implied goals of companies are driven from the top down and most of us are strongly influenced by the motivation to impress our boss.
“Leaders who turn a blind eye may encourage employees to discount potential damage, assume their behaviours will not be detected, hide behind ambiguity about the rules and assume that the organisation itself ‘doesn’t want to know’ how they meet their performance expectations.”
Dr Malcolm Sparrow, Harvard professor
The senior leadership team is responsible for developing and projecting company culture. It forms part of the DNA of the organisation and is why Executive Support is an essential element of any Digital Workplace project before and after launch.
3. Compliance is your friend
One of the contributing factors to our toxic banking culture has been identified as a sense of impunity. The confidence that one’s indiscretions will not come to light can make villains of us all. Working in an area with strong compliance requirements, it can sometimes seem like they are specifically designed to prevent progress. But as we have seen time and time again from the Obeids to Auburn Council to Uber: just because there is no immediate consequence to corner cutting or rule bending does not mean organisational actions will not have to be defended in the future. Proper procedure management requires effort and vigilance but has the added benefit of sleeping soundly at night without fear of affidavits after the next public and embarrassing data breach.
So while we enjoy Michael Hodge and Mark Costello’s merciless questioning of our financial institutions, let us all take the opportunity to learn some valuable lessons along with the entertainment.