2020 has been a very strange year to say the least. No-one could have reasonably foreseen the changes of the last six months and it is hard to predict what the lasting impacts of this extraordinary period will be.
The changes to working life across the globe, precipitated by the Covid-19 pandemic, have arguably been the most radical and abrupt change to working life in generations. This came at a time when workplace culture has already been under intense scrutiny, in financial services and beyond. Firms have been encouraged to foster positive or ‘healthy’ organisational cultures due to the pressures of social change, together with new regulation such as the Senior Managers and Certification Regime (SM&CR) and the FCA’s Conduct Rules.
Covid-19 has forced organisations into change and, as many firms prepare to go back their offices following months of staff working from home, there is an opportunity to put organisational culture back on the agenda and reshape it to meet the demands and expectations of the society and the regulator in the 2020s and beyond.
Each organisation needs to develop its own understanding of what a healthy organisational culture looks like. To do this, a wide-ranging consultation needs to take place with staff at all levels, whether they are on the Board or they are a new trainee. Each organisation is different and, while the FCA does not prescribe or dictate what constitutes a ‘good’ organisational culture, it considers a financial services firm with a healthy, purposeful culture one that reduces the risk of harm within the market.
To help do this, firms need to be clear about their purpose and consider whether their culture is fit for that purpose. Firms need to be honest and be open to self-reflection and criticism. If there are cultural problems within the organisation, what are they, why do they exist, and what should be happening instead? It is not about finding excuses for poor behaviours; it is about being open to positive change. Everyone needs to know what is expected of them and how they fit into the bigger picture, no matter what their position is within the organisational structure.
Can the lessons of the Covid-19 pandemic help us embed healthier organisational cultures on a long-term basis or will the fragmentation of our working lives weaken organisational culture, leading to potential harm?
For example, Covid-19 has shown that flexible working on a large scale is possible. To some people this has been viewed as a positive, suggesting that remote working and flexible working arrangements can be implemented on a longer-term basis. Benefits may include a better work-life balance, reduced travel time and a reduced carbon footprint. However, this ‘utopia’ is not without its risks. Staff working in isolation brings with it risks to people’s mental wellbeing but it also, to an extent, breaks down the structures and hierarchies of office life that may reinforce positive behaviours.
The fragmentation of the workforce, for example, raises concerns about staff supervision, data security and confidentiality. The physical office has traditionally been the embodiment and symbol of an organisation’s culture. The loss of its centrality may have ethical implications as an ‘out of sight, out of mind’ culture may develop when staff are working away from the watchful eye of their managers and colleagues.
Our behaviours have had to alter because of Covid-19. What does this mean for the future of meetings held in restaurants and bars and the drinking culture that is often associated with the City of London? What impact will this have on how firms, and the individuals within them, see themselves and interact with clients and potential clients?
Social distancing will affect the relationships between colleagues. It now means that there is a public health reason for people to keep their distance from each other. This effectively does away with (at least for now) the handshakes and ‘pecks on the cheek’ that have long formed part of social interaction within business relationships. Colleagues must now keep apart. To some this may feel unnatural and cold but to others, it may be a welcome relief, offering additional protection from harassment or unwanted physical contact in the workplace.
Covid-19 has also been an event that should make us all more sensitive to the plight of others and to recognise the signs of vulnerability – whether that be emotional, physical, financial or a combination of these. By reflecting and being empathetic based on our own experiences during the pandemic, it can remind staff and firms to view customers as human beings and be more concerned to treat them fairly.
Once a firm’s senior management knows what sort of culture it wants to foster, it should commit to delivering it. To implement change successfully, there need to be a set of key performance indicators (KPIs) that can be monitored. Measuring an intangible concept such as culture can be difficult. Relevant management information (MI) should be collated that can show a firm’s senior management where progress is being made or where further attention is needed. If there is evidence of cultural failings, the firm should act to address it. This includes rewarding those who embrace the new culture and reproaching those whose conduct and behaviour fall short of expectation.
Cultural change usually takes a long time to take effect. Covid-19 has, to an extent, sped up the process of social, cultural and economic change. Firms and individuals should be alert to these changes and the benefits or detriment that such change can bring to an organisational culture. By aligning the positives with the wider efforts being made to improve culture, this can be beneficial to individual firms and the wider market.