The word culture has gained a lot of prominence in the world of business over the past few months. Some recent events, from the sexual harassment revelations at Lloyds to the emission test scandal at Volkswagen, point towards culture. So it’s time for CEOs to step up and be the flag bearers of cultural change.
If you closely examine the proposed SM&CR for the insurance sector, the cultural change that the Financial Conduct Authority is promoting at the very heart of the new regime.
Whilst most CEOs and other Senior Managers are heavily involved in shaping organisation strategies surrounding the general business risks, technological disruptions and digital transformation, it is important to bear in mind the very famous Peter Drucker quote, “Culture eats strategy for breakfast”. If not enough time and effort are channelled into creating and implementing a culture that’s fit for the business, then all other efforts on strategy are carried out in vain.
I would encourage looking at the SM&CR as a well-presented opportunity to define and change your organisational culture. What is exciting about the SM&CR is that it encourages cultural alignment to help meet good consumer outcomes and stay connected to the core customer-centricity ethos; by aligning and encouraging collaboration and teamwork within the various internal functions.
A common mistake leaders make is trying to create a homogeneous culture that forces staff to follow it. This approach, in my opinion, is futile, as a pre-fabricated set of cultural identities comes across as artificial. It is best facilitated to be developed through people; by encouraging them to practice the intended organisation culture around key principles such as customer centricity, teamwork, collaborations etc.
The challenge
Driving an effective organisational culture is easier said than done. Most CXOs still perceive it as a slippery concept. From identifying existing culture to defining the intended culture, let alone improving it!
For the insurance sector, there is an even bigger challenge. The recent flurry of mergers and acquisitions makes cultural interweaving incredibly difficult. The key to successful cultural integration is for the senior leadership team to define and communicate clearly, the management objectives to both the entities. In an M&A situation, it is critical to define the expectations early on in the process, as the life span of the two new cultures to coexist is very short. With time, a new cultural identity will start to form, so the new identity should be one that you have control of and the one that you defined.
Shaping a good cultural identity by defining a strong leadership foundation is essential in managing the business’s reputation and meeting all the regulatory requirements. It is important that leaders acknowledge that leadership behaviours affect the culture you, your colleagues, and your teams work in. Whether you work directly with customers or not, you will realise what you do and how you behave will affect the experiences of your employees, your customers and the organisation’s reputation. By embedding the leadership principles within Wiser Academy’s suggested insurance leadership framework, you will positively impact your business, your employees and, most importantly, your clients.