Tag Archives: Financial Services

Rubbing Salz in the wound at Barclays?

4 Apr

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The Salz review of Barclay’s Business Practices was published yesterday, all 244 pages of it. And, kudos to the new brooms at the bank for publishing it online too.

So, hot off the press here is a set of excerpts, mostly from the front of the report (but not the headings, they are mine! Highlights are mine too). It all makes fascinating reading, essential text-book reading really for anyone involved in financial services, risk management, governance and organisational culture or simply fascinated by the sorry tale of a major UK bank brought low by toxic culture in one part – a dominant and super clever part – of the business.  

Multi silos = multi cultures

“The result of this growth was that Barclays became complex to manage, tending to develop silos with different values and cultures. (Turn to page 81 for Fig 8.2 for a great audit of the many differing value sets!). Despite some  attempts to establish Group-wide values, the culture that emerged tended to favour transactions over relationships, the short term over sustainability, and financial over  other business purposes”.

Void at the centre

“We believe that the business practices for which Barclays has rightly been criticised were shaped predominantly by its cultures, which rested on uncertain foundations. There was no sense of common purpose in a group that had grown and diversified significantly in less than two decades. And across the whole bank, there were no clearly articulated and understood shared values – so there could hardly be much consensus among employees as to what the values were and what should guide everyday behaviours. And as a result there was no consistency to the development of a desired culture”.

“However, culture exists regardless. If left to its own devices, it shapes itself, with the inherent risk that behaviours will not be those desired. Employees will work out for themselves what is valued by the leaders to whom they report. The developing cultures across Barclays were still less consistent as a result of a highly decentralised business model, that tended to give rise to silos. This left a cultural ambiguity at the heart of the bank”.

“The entire Group Guiding Principles had not percolated into the consciousness of the Group. Employees of all ranks were often unaware of the Guiding Principles. If they were aware, they could cite only one or two of them – often without much authority. They also told us that they were not a regular feature of induction processes, were rarely discussed as part of how they should work in practice, and were not embedded in training or performance management processes.”

“As Antony Jenkins (new CEO) said in the 2012 Annual Report: “For the past 30 years, banking has been progressively too aggressive, too focused on the short term, too disconnected from the needs of our customers and clients, and wider society and we lost our way.”

The unhappy voice of the Employee

“For the employees at Barclays this has been a difficult time. Our meetings with them and a survey we conducted made clear that the overwhelming majority are focused on the bank’s customers and doing their best for them. They are as disappointed as anyone by some of the behaviours”.

“Many employees told us directly about their sadness, disbelief and anger with what has gone wrong in terms of the much publicised poor behaviours”

You get the behaviours you reward

“There was an over-emphasis on short-term financial performance, reinforced by remuneration systems that tended to reward revenue generation rather than serving the interests of customers and clients”.

Kill the messenger?

“There was also in some parts of the Group a sense that senior management did not want to hear bad news and that employees should be capable of solving problems. This contributed to a reluctance to escalate issues of concern”.

HR powerless

“The HR function was accorded insufficient status to stand up to the business units on a variety of people issues, including pay. This undermined any efforts to promote correlation of pay to broader behaviours than those driving individual financial performance”

Customers 101 (!)

“In pursuit of its goal of being a leader among its peer institutions, Barclays should develop an understanding across its businesses of how to meet its customers’ needs and expectations while also meeting its own commercial objectives and those of its shareholders. It should seek to learn from customer feedback, and publish the measures by which it would judge performance in resolving complaints. Barclays should report periodically on progress against these measures by publishing the data both internally and externally so as to reinforce the seriousness Barclays places on continuous improvement.

And…so what?

“To address the trust issues and restore its reputation, we suggest that Barclays should communicate openly and transparently how, and to what extent, it will implement our recommendations.”

Barclays should be praised for publishing this report. Let’s hope too that this new spirit of openness and humility continues, and that this point above is also acted on. Fascinating times indeed, for the once great Barclays!   

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Using touchpoint measurement to drive business growth at Schwab

15 Nov

Good film, courtesy of Bain’s net promoter site, on how Schwab, a US financial services firm uses touchpoint NPS to embed the voice of the customer into the business and more importantly, how they ‘close the loop’ with unhappy customers and learn too. 

It’s great to hear that “there’s no question in my mind that NPS correlates extremely closely to financial performance”.

And, it’s also interesting to hear that 75% of customers are just surprised to be contacted! As Schwab say, a simple (and obvious) goodwill gesture, and it must help improve perceptions of the company!

Plus, it’s a good reminder not to ignore promoters, as it’s their promoters who are responsible for a large part of Schwab’s growth.  

http://www.netpromotersystem.com/system-processes/closed-loop.aspx

the retail store that is…. Umpqua bank

13 Nov

Interesting film interview with the CEO of Umpqua Bank in the US (think Metro Bank in the UK).

Some good material in here about the organisational culture and strategy, employee engagement and how they choose to compete. I find it interesting that they established their company culture as a key asset (never wanting to become a traditional ‘Bank’) and how he stresses the importance of open-ness and working hard to avoid uncertainty because of course, people fear the unknown.

I also like how he states that the hardest thing in business is to stay the same. Change is going to happen whether if you like it or not, so stop resisting so much.

http://www.youtube.com/watch?v=yKx_WyhP2lk

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