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Authored by Chris Rowe, Leathwaite.

The recent Leathwaite Global HR leadership survey (January 2017), undertaken by CHROs and their direct reports, cited Cultural Change as the predominant business challenge for the coming year within financial services (FS), ahead even of regulatory change, business restructuring and talent acquisition. High-profile appointments at organisations such as Société Générale, where the head of the bank’s culture programme is a direct report of the CEO, appear to reinforce this.

So how should businesses prepare and adapt? And who should “own” culture – CEO? CHRO? Both? Neither? Should you create a Chief Culture Officer role? Below, we consider some of the most important areas shaping the debate.

Leathwaite Global HR Survey: Organisational Priorities in 2017

What is it then?

A Google search on the meaning of culture is as brilliantly bottomless an exercise as searching for a business analyst on LinkedIn; hours lost, plenty of results but you may still finish up none-the-wiser.

Indeed, there seems no universal accord on what exactly culture is, although some of the more credible academic definitions are offered by Schein (“A pattern of basic assumptions… to be taught to new members as the correct way to perceive, think, and feel“) and Buchanan & Huczynski (“The personality of the organisation”). However, a more digestible one-liner which seems to say all of the above and more as a definition is simply “the way we do things around here”.

One thing on which people do seem to agree, where culture is concerned, is that it is a “force-multiplier” – that is to say, get it right and it can lift an organisation to great heights of achievement. Get it wrong, and the reputational and financial damage incurred can push a company to the edge of, or in some cases directly into, the abyss.

Schein’s Model of Culture

Post-crisis post-mortem

Outputs of the deep, post-crisis period of self-reflection undertaken by the FS sector are many and varied, yet almost all point to a failing of culture and a realisation that “the way we do things around here” was not particularly good, when stakeholders including staff, clients and shareholders were considered. The most recent multi-billion dollar Department of Justice (DoJ) settlements relating to mortgage-backed securities sales by Credit Suisse and Deutsche Bank, as well as sector-wide issues relating to FX and LIBOR submissions among others, all cite a failing of culture, in some form, as contributory and that the pursuit of profit and bonuses was at the expense of the clients these organisations were serving.

The preceding paragraph is not particularly “new news” to most, but these cultural failings have significant present-day impacts on both financial capital, where banks are essentially giving back much of the pre-crisis profits they generated in the form of fines (as much as 75%, according to some analysts’ estimates), but also human capital, whereby working for a big global bank has simply lost its caché for many. With a number of universal banks facing an existential challenge in the form of FinTech and other disruptors, acquiring the best campus-level talent has never been more important. When your perceived culture acts as a deterrent to those entering the workforce for the first time (as has been widely reported in the media), you have a problem.

No quick fix

So if cultural change is an acknowledged priority, what should be done? In the same way that cultures take generations to build, they clearly cannot be unwound and changed in the click of a PowerPoint deck. There appears no quick fix and the work required goes far beyond picking five aspirational adjectives to form an acronym (memorably and somewhat ironically, Enron had “RICE”, where “Respect” and “Integrity” were the first two values), although a set of cultural values with which people can identify, is clearly a part of the process.

Who should “own” Cultural Change?

Human Resources:

  • The HR domain clearly has a role to play within driving cultural change, helping define the organisation’s cultural values, ensuring they are congruent with firm-wide strategy and developing the year-end performance frameworks to help stamp those values into the behaviour of the workforce.
  • In recent years, the industry trend has been to cluster culture with talent & learning, forming the neatly titled “TLC” group, typically headed by a direct report of the CHRO.
  • However, is this enough? Given the ongoing struggle HR faces in certain organisations to be truly accepted as a business enabler rather than a control function, some might argue not.

Risk & Compliance:

  • Organisations are also approaching the culture topic from the governance angle, in the form of conduct risk.
  • Typically a subset of the compliance function, or the risk organisation in some cases, there is no formal and finite definition of conduct risk (which is interesting in itself) although broadly conduct risk seems to be accepted as spanning the behaviour toward customer interaction, staff remuneration and conflicts of interest.
  • The links between conduct and culture seem clear to most, although attempting to put controls and frameworks around human behaviours is clearly no mean feat.

Front Office:

  • Having been widely pinpointed as the architects of much of the wrongdoing, the Business – the collective grouping for those generating the revenue – are also taking ownership of driving the solution.
  • Embedded culture officers, reporting to and paid by the business units, are beginning to appear out in the market and can act as an effective conduit between the business and other cultural agenda-shapers such as HR and Risk.
  • However, the same criticism levelled at “First Line of Defence” control groups embedded in the business, can also be applied here; is this a prudent approach to tackling the problem, or throwing money at it to let someone else make it go away?

Executive Committee:

  • The CEO and leadership team have ultimate accountability for performance of the organisation; both financial and reputational.
  • Given culture plays a role in both, leading by example in cultural transformation is paramount from the CEO down, if it is to ring true amongst the rest of the organisation.


  • ConnectOne bank in the US made headlines in 2012 by announcing the appointment of Maria Gendelman as Chief Culture Officer (CCO).
  • More recently in 2016, Ian Fisher was announced as head of the culture programme at Société Générale, reporting to CEO Frédéric Oudéa, and Isabelle Welton was appointed Chief Marketing, Communications and Culture Officer at Zürich Insurance.
  • The specifics of these roles are doubtless different in each case but one would hope the task of cultural change is not being placed on the shoulders of one individual, but rather marshalling and moderating the four groups above and the wider firm, to ensure all interests in cultural change are properly reflected.

Find your King-Pins

Having shaped the cultural direction of travel and factored in some of the core interest groups above, a key task for the CHRO and executive committee is to manage the diffusion of cultural change through the firm, via its “Cultural King-Pins”, as coined by Renée Mauborgne and W. Chan Kim in “Blue Ocean Strategy”– meaning the individuals of sufficient stature in the firm who exude disproportionate positive influence over direct reports, team-mates and colleagues when compared with others. Borrowing the bowling analogy, targeting these individuals should speed up the diffusion of culture through the organisation with direct knock-on effects.

This is based on similar principals to the “Role Modelling” component of McKinsey’s four step model of influence (alongside a “Compelling Story”, “Reinforcing Mechanisms” and the “Skills Needed for Change”), a simple yet widely endorsed model for changing organisational mind-sets and behaviour.

These culture-carriers should be those that best embody the chosen values of the organisation and are truly rounded – people who make Partner at Goldman Sachs or “Group Managing Director” at other institutions are more than just good at their job. For organisations considering implementing this type of banding, this should be seen as an aspirational level to attain and a place for people who make good things happen.


Clearly there is much work to be done for CHROs, CROs and other Executive Committee colleagues to achieve the degree of cultural change they believe is needed. A fundamental question should be, can you change and/or design culture? Or is a culture programme similar to attending lessons in authenticity – manufacturing something that should be natural? Also, in a hyper-competitive industry where quarterly results and shareholder value are paramount, should we be surprised that FS organisations wound-up where they did from a cultural standpoint?

However, anecdotal evidence suggests cultural change is happening within the FS sector. Possible areas for organisations to explore further could be as follows:

  • Start with the biggest King-Pin of all: Culture should be driven from the CEO and their leadership team downward, to make it buyable and believable among the broader workforce. The generation of post-crisis CEOs are markedly different from their pre-crisis counterparts in this regard, but must continue to “walk the walk” culturally.
  • Boost the “C” in “TLC” or make it a stand-alone report of CHRO: Dependant on the organisation, the Culture component of Talent, Learning & Culture, has probably been a minority partner in comparison with the more established domains of Learning and Talent. CHROs should decide whether “TLC” is a manageable portfolio or whether Culture warrants its own specialist.
  • Get HR, Risk & Compliance closer together: No single function should “own” cultural change. Given the mutual interest and conduct/culture intersection, there is an argument that HR does not work closely enough with these two groups on the topic in question. Additional input from Marketing and Communications is also valuable.
  • Give a Chief Culture Officer a true mandate: If going down the route of a Head of Culture Programme or a CCO, a true mandate with the correct reporting line and proper resource attached will avoid the “big hat no cattle” pitfall associated with some firm-wide change programmes.

Further Information:

Chris Rowe 
Chris Rowe is a Director of Leathwaite and leads the global HR practice, in addition to running the EMEA (ex-UK) business from Zürich. Chris has 15+ years` industry experience, having recruited into the financial services industry since 2000, including board and MD-level appointments.

Telephone: +414 4214 6642
LinkedIn: Chris Rowe