Salz Review - Wall Street Journal

185
Salz Review
An Independent Review of Barclays’ Business Practices
cultures defined by overly commercial and competitive features at the expense of all else
are at the root of major corporate failure. Other research by Corporate Philosopher, Roger
Steare 274 , supports this hypothesis, pointing to cultures which lack the ethic of ‘care’.
In such cultures, research shows an increase in fear-driven compliant behaviour at the
expense of doing the right thing. Steare argues that the modern corporation is a relic of
feudal thinking in which power ultimately derives from wealth. His research points to
evidence that these pseudo-democratic organisations are prone to cultural dysfunction,
with profit pursued at the expense of a higher order purpose. This, he concludes, is a root
cause of corporate failure.
Regulators have also pointed the finger at culture, describing unacceptable culture as a root
cause of the recent financial crisis. 275 Regulators need healthy bank cultures to enable them
to do their work effectively. They can never have sufficient resources to monitor every bit
of the banks’ work, so culture is the crux to ensuring that organisations comply not just
with the law but with the spirit too. Markets rely on rules and laws, but those rules and laws
in turn depend on truth and trust. 276 Better cultures should require less regulation, fewer
laws and fewer regulators.
Culture takes time to create, is enduring and resistant to change and is almost impossible to
copy. It is this which can make culture an organisation’s most valuable (or value
depreciating) asset. For employees, culture can be a key component of the decision to stay
with one organisation instead of seeking work in another. It is the social glue that delivers
discretionary effort at work, and it is this which makes culture a valuable construct.
How Groups Carry Culture
To truly understand how culture is created through shared learning, it is necessary to
understand the basics of groups and how group norms are created through the processes
of group formation and shared learning. There are basic socio-psychological forces that
operate in all of us (need to achieve, need for affiliation/relationships and need for
influence). 277 These are the raw materials around which people organise to accomplish tasks
and to create viable, socially comfortable organised groups to which members feel aligned.
Groups typically develop in stages. Each stage requires the group to solve the questions of
purpose (what are we here to do); member identity (why am I/we part of this group and
how do we fit together); mechanisms of influence (what is my role); and how to manage
both feelings of frustration and caring through the norms of authority and intimacy (how
do we get things done and what does it feel like to be part of this group). Norms are
developed as these questions are answered. Values and associated behaviours and patterns
of interaction that work for the group, helping the group accomplish its tasks, gradually
over time become cultural assumptions. The stages that a group progresses through are not
exactly linear, but do typically follow a pattern, resolving matters of purpose, authority and
intimacy in this order.
274 www.MoralDNA.org.
275 Hector Sants speech, “Do regulators have a role to play in judging culture and ethics?”, 17 July 2010.
276 Charles Handy, What’s a Business For?, 2002.
277 David C. McCelland, Human Motivation, 1987.