Thursday 21 November 2013

How can the Banks change for the better?

Time MCG focuses on positive culture change in the financial sector. Why? For years now it has been hit by one scandal after the next. Recently we have had a group of banks fined for colluding with each other. JP Morgan which has just paid a record fine of $13Billion over the toxic mortgages. Not to mention the Co-op Bank in Britain and its disgraced CEO followed by the resignation of the Group Chairman. The continuous RBS debacle. Rabobank which has had one of its record fines for its libor rigging scandal and who has just lost its CEO. (Heavens forbid, I did not see that one coming!) Is this just the tip of the iceberg? The big questions remain. Do the Banks want to change? Or have they simply lost their sense of purpose? One answer is clear, they must change to redefine their sense of purpose, otherwise the public might have to make that change for them. History has taught us many lessons or examples where in many such circumstances, the ‘lynch mob’ tend to take over causing all sorts of frightening scenarios.
As a former banker and headhunter, I can relate to many of the problems in the banks as they are similar to many of the problems I had experienced even personally which caused me at the time a lot of pain. I had to change my mind set aswell as my attitude and as a result I believe in change. Looking back to that time that pain seems so insignificant and it happened presumably for a reason. We all know that change is hard as it can instill our greatest fear which is fear itself. Change will mean sacrifice as somewhere along the line someone out there might lose. It might mean moving out of our comfort zone or perhaps a change in our lifestyle. Hey, is this not how we can expand our horizon and create a better future? Between you and I, this has to be a darn site better than the whole system collapsing in its current form.
An identity issue is clearly apparent with many of the banks. It is also clear that some Bankers behaviour is not upto the higher ethical standard that the public expects of them to run our money responsibly. It is evident too there has been a lack of individual punishment for those who have behaved poorly where a clear example must be set particularly of those few at the top. Note many of those who instigated the financial crisis have got away scot free with millions, running around our economies continuing by doing harm and God knows what else. A senior banker mentioned to me once 'we are simply a mirror of what our investors want.' Instead of turning the ‘mob’ onto the Banks which noone wants, and regulation has to be a double edged sword; there must be a better solution. Let’s see how Time MCG can offer a few ideas.

We see two inevitable choices. Either the Banks become a public service which most bankers don’t want or their work must carry a meaning.
Let’s look at the latter and grab the bull on Wall Street by its horns which is far more enterprising and analyse the nuts and bolts of the problem. Identity. What is it? At human level an identity is not just about what you do nor is it about describing yourself, your personality or your hobbies. It is about who you are and why you do what you do at the given time and place. Thus having a purpose or meaning coherent to our very own inner value system which becomes increasingly clear in time through our ability to create, serve, teach or encourage and contribute to where there is a need thus benefiting others. It is by this that we can further develop our talent, knowledge and skill set thus increasing our confidence, self-belief and thus discovering our very own identity and sense of purpose.
This is the same at a corporate level or in a business. They are organisations created by human beings as often they are simply a mirror of their very own identities of the very person or people who created them in the first place. An identity of a business is not just about describing what you do nor how you do it. Again it is also about who you are and why you do what you do. They are adapted and changed not just according to the needs of the market place but also to the times of today. In the financial organisations or banks which is linked to money, investments, assets or wealth, it has often proved challenging to create an identity and certainly in more modern times.

To help the banks create an identity it has to start with a purpose, vision or a mission statement. This is where the banks have a great difficulty and understandably so as this would come into direct conflict with the enrichment of themselves, their shareholders or their clients. It is this conflict that must be resolved and it must be done very soon to bring back our inner belief, courage, confidence and identity. If this enrichement is for the purpose of a bubble that will eventually burst, then it carries no purpose.  Wake up! The world is shaking, and tilting to breaking point. It wants change. Somewhere along the line something has to give.
Profits aside. Anybody with any common sense will know that money in itself carries little higher meaning in our lives. It is simply important and a necessary tool for our bread and butter. I suppose one could say it serves the following, firstly it is simply the common denominator used as an exchange for goods and services and if you like it is a recognition for our hard work and contribution which again must carry a benefit. A mission therefore, can be something more tangible, something that their employees and even the public can relate to. Again it must relate to our work that carries a benefit, which could be described as a gap out there that requires filling, or to something that needs improving or to where there is a straight forward need that in itself might require changing. Everybody out there will be interested in something. This is the case either at individual, group or at corporate level. Profit and income streams are the positive result of getting the nuts and bolts right, not the other round how hard this may seem for a banker.
JP Morgan for example does not appear to have a mission statement, although their CEO has come out with a statement on the website which could be determined as a vision. ‘Our aim is to be the world's most trusted and respected financial services institution.’ With all due repect, this phrase is abstract and carries little meaning and very little is given away when talking about the much needed transparency required in the sector. JP Morgan may aswell become a public service. To many this will seem laughable after their record fines. On top of this how are they going to measure each employee on trust and respect? These are extremely difficult values to measure and might take a life time to bear fruit. No, we might have to go further than this. I saw a mission statement that struck me in another bank I had visited. ‘Our mission is to make money work for positive social, environmental and cultural change.’ Now that has meaning!

All we need now is a new breed of courageous leaders to take over the reigns that understand the cultural change that is required in our desperate world. To lead us into a new direction and the rest will follow suit. Yes. There is such a thing as hope.
‘With identity involvement will function’

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