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Why Does Culture Matter? An organisation’s values, intentions and actions all work
Why Does Culture Matter?
An organisation’s values, intentions and actions all work together to form the company culture, which can have a great effect on levels of customer trust and the way in which the FCA perceives your organisation.
Since the financial crisis, we now know that a good culture is influential in every customer interaction and is key to ensuring that positive customer outcomes are consistently delivered. As a result, a customer-centric culture can create a clear point of differentiation against your competitors, providing a commercial advantage and delivering long-term sustainability for your business.
Equally, we also know that a poor culture can have a significant impact on a company’s reputation and customer satisfaction. It is often the underlying reason behind increased complaints and poor employee and customer retention, and can therefore have a negative economic impact on your business.
Culture has been a regulatory priority for a while now. However, there has been a renewed focus on this area over the previous few years, and the FCA continues to grow more astute to the signals of poor culture, and how it can negatively affect consumer confidence in the wider industry. The FCA expects all firms to keep the interests of their customers at the core of every business decision and customer interaction.
Can Culture Be Measured?
There are certain aspects of your organisation that can be examined to determine your culture. Ongoing monitoring is already a key part of many companies’ governance and compliance structure, and it is important that the management information gained from this is considered in relation to culture. The three key business areas that you should be looking at in order to assess culture include:
Leadership: governance structures, and ‘the tone from the top’, plays a significant role in driving the right behaviours across your company and ensuring adequate processes are established. This looks set to continue with the forthcoming roll-out of the Senior Managers Regime (SMR), which clearly signposts the regulators belief that responsibility ultimately lies with senior management. One way in which you can evidence a customer-centric culture is a commitment from senior management to actively seek feedback on your products and services from customers and staff, and use this to implement improvements.
Operations: if the tone from the top is committed to positive customer outcomes, this should be reflected in your operational practices. As such, established policies and procedures should all work to enable good outcomes for customers, and you should be able to provide practical examples of this. A closer examination of your company’s operational practices can reveal any disconnects between your leadership culture and the culture that company policies encourage.
Cultural Influencers: leadership culture and operational practices also need to be aligned with the aspects of your business that shape culture on the ground. These include performance management practices, incentives and remuneration structures, and training. All of these can have a significant effect on staff behaviour, how they interact with customers, and whether day-to-day decisions are made with the customer in mind.
Find out more about the author of this article, Jason Wintie, TCC’s Technical Director.