Salz Review - Wall Street Journal

177
Salz Review
An Independent Review of Barclays’ Business Practices
Appendix B – What is Culture and How Can it Go Wrong?
Introduction
In the body of this report we looked at the culture of Barclays and what we believe needs
to change. We commissioned this appendix to provide greater context – beyond that of
Barclays – of what culture is, why it matters, and how it can go wrong. The appendix draws
more broadly on the body of research addressing cultural issues. We hope it provides
useful background.
The financial crisis of 2008 has rocked trust and confidence in the industry at all levels of
society, including many of those who work within the industry itself. ‘Culture’ has been
mooted by many as a root cause of the damage done 258 and a programme of cultural
change has been proposed as the course of action to aid recovery.
The culture of banks, it is said, drove the wrong behaviours. The sector lost sight of its
sense of purpose and lost sight of the values that are needed to run a successful global
financial system. Leaders built banks that pursued profit at the expense of all else, failing to
see the systemic risks and forgetting the fundamental principles of the profession of
banking. 259
Leaders need a sense of purpose and integrity to redefine banking and restore trust with
customers and employees. These leaders need to be people who see themselves and others
as people first (not just employees or customers) and who recognise that creating
organisations with ‘good’ cultures isn’t a project or a short-term focus – rather it is the
leaders’ work. Work that requires a good grasp of people, culture and organisational
development, as well as business, strategy and structure; the latter without the former is
inadequate.
‘Culture’ and cultural change have become somewhat of buzz words amongst those faced
with delivering change in banking. The reality of course is that changing culture should not
be a goal. The goal should be to change the tangible things about what the service does for
customers and how people will do their work; gradually, this will change the culture.
Fundamentally changing how we work (beliefs, behaviours, structures and systems) is the
more challenging part and takes time.
Culture, Sub-culture and Leadership
Anthropologist Redfield 260 defined culture as “shared understandings made manifest in act
and artefact”. In an organisational context we might understand culture as the practices and
values, where practices are the acts or the way things are done and values are artefacts
which are human concepts and are the judgments about the way things should be done.
258 For example, Hector Sants, Chief Executive of the FSA, Sir David Walker, Chairman of Barclays and
Marcus Agius, former Chairman of Barclays.
259 Banking Standards Committee: Evidence from Douglas Flint, Chairman of HSBC PLC.
260 Robert Redfield, Introduction to Bronislaw Malinowski, Magic, science and religion, 1948.