Instead of looking for someone to blame for the risk industry’s woes, let’s do something about it – like fixing our culture.
“Culture is a little like dropping an Alka-Seltzer into a glass – you don’t see it, but somehow it does something” – Hans Magnus Enzensberger
As risk professionals, we all know that we work for an amazing industry, an industry that gives dignity and choice to clients during a time of need. But if over the past 12 months, you’ve called for an Alka-Seltzer for pain relief, you may not be alone.
Recently we have made the headlines for all the wrong reasons. Because of this, it has been tempting, even natural, to focus on the negatives – throwing stones at associations, product manufacturers, licensees and even individuals. Just read the headlines and the subsequent comments and you will know what I mean.
So we either drop a pain reliever, try to ignore, blame and hopefully have it fix itself OR we do something about it. But where do we start?
It is far less comfortable to ask whether the culture of the industry, or of a particular organisation, drives incorrect behaviour.
Addressing the Senate Estimates Committee earlier this month, ASIC chairman, Greg Medcraft, said culture was a big driver of conduct in the financial planning industry. Where the culture of an organisation is poor, this leads to poor behaviour by advisers and ultimately, poor outcomes for clients.
Put simply, ASIC says that if an organisation encourages or turns a blind eye to bad behaviour, it should be held responsible.
As risk professionals, we have already seen the damage – both financial and to our reputations – that comes from a culture focused too heavily on selling. Selling should not be a dirty word, but if it drives behaviour away from the responsibility we have to our clients, it becomes one.
Experience has shown that despite all the rules and regulations, despite high levels of education, it is the underpinning values of a company and that of an individual that determines a culture or belief system. Get it right and any ‘bad apples’ find it hard to survive in a culture that encourages true professionalism. Get it wrong, and advisers who may normally have acted professionally may feel pushed into questionable behaviour.
Culture is an easy word to say, but it takes time and commitment for a positive culture to be embedded in a business and that of an industry. It is not a tap that you can turn on overnight.
Every business (big or small) must have a clear vision and mission of why it exists. Underpinning this vision are two important building blocks.
The first is your strategy – the logical, rational, measurable plan for success. Without that, the business will fail. But just as important is your culture. This dictates your behaviour in achieving those goals. Culture is just as critical to your long term success as strategy, but unlike strategy – which is rational and easily communicated - culture is human and is lived and led through emotions.
When we launched Affinia over two years ago, we set up five “house rules” or principles that would encapsulate our culture. Everyone in the business, from the top down, is bound by these principles, and we try to provide an environment that nurtures them. The principles in themselves are simple:
But turning those principles from words into practice requires good communication and an understanding that everyone has a role to play.
No one can shy away and when you drop the ball, it’s called out. We hold each other accountable. Personally, I love these types of discussions as it shows that something is resonating, we are walking the talk and our culture is believed in.
Culture starts at the top. It is up to management to communicate the values of the business and to provide a working environment where those values are lived day in and day out. Culture needs to be embedded in the practical side of the business – in its goals and practices.
Ideally, we should be able to analyse and measure culture in the same way that we can measure financial and business objectives. But this is often hard to do. In many cases, you can sense the culture of a workplace simply by walking into the building and spending time with the people who work there. There is an indefinable buzz when everything is operating as it should be.
For those looking for more concrete measures, these may include things like collaboration, communication, support, innovation, and alignment with your company’s stated values.
We all need to build a culture where we not only have corporate and industry values, but we also provide an environment where everyone understands and lives by them.
Craig Parker is general manager of TAL-aligned licensee Affinia Financial Advisers
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