As a young manager back in the early 2000s, I was fascinated by what happened when the Halifax merged with the Bank of Scotland to form HBOS. At the time, I was working for the Halifax, managing the North East region which spanned Leeds, Yorkshire, Newcastle and everything as far as the Scottish border.
The planned merge certainly looked good on paper and analysts in the city were content, however, as I settled into my front-row seat to watch the two organisations come together, I couldn’t help but notice just how differently their respective teams behaved.
At the Halifax, only a few years on from being a traditional, albeit enormous building society, there was a down-to-earth honesty about things. No-one really cared which school you went to or how many stripes you had on your shoulder, it was all about what you could do in your job. There was a humility, a sense of humour and a genuine desire to give your best to achieve common goals. Everyone was focused on customers and results and there was a real sense of camaraderie within the teams and a healthy competition between the branches.
The folks from the Bank of Scotland were cut from a much different cloth. I didn’t see much of the people in the branches, who were probably similar to the Halifax teams, but the investment advisers tended to conform to a certain type. Pale, male and stale, they typically came from military or public school backgrounds; wore bold, striped suits; cygnet rings on their pinkies and had their initials embroidered into their cuffs. Our differences certainly made for some interesting discussions in those first few meetings.
And so it was that my interest in culture began. What were the executives thinking when they decided to merge these two businesses? Hadn’t they thought about whether the people would get on and be able to work together?
My curiosity in organisational culture was developed further at Henley Business School during my MBA and I ultimately selected culture as the topic of research for my dissertation. It’s a word you hear often, culture, but how should you define it? There are a multitude of definitions, but my favourite for its simplicity is: ‘the way it is around here’. Look at your business. Ask yourself: how is it around here? What do you see? What do you hear? How do people behave and interact? How do they dress? What are the rituals around birthdays, weddings and other celebrations? What are the common understandings of what is expected, the jokes that are OK for people to tell, the stories that continue to define the place year after year? Getting a sense of all of that gives you an indication of an organisation’s culture but even then you’ve only just scratched the surface. Culture isn’t just about the staff, you need to talk to customers (as they were known in the Halifax) or clients (as they were known in the Bank of Scotland), suppliers and employees amongst others to truly build a clear picture.
If the culture’s not right, changing it culture is notoriously difficult and can take 3-5 years or longer depending on the size of the organisation and the urgency and motivation to change. For the past few years at Capital, we’ve been very focused on developing our culture of excellence. We’ve made it one of the six key objectives in our strategic plan and have invested a lot of time, money and energy into developing it. So does culture matter? 100%. I tell my teams that culture beats strategy every time. You can have the best plan in the world, the best products out of all your competitors, offices in every key jurisdiction but if your teams don’t answer a ringing phone on someone else’s desk because it’s not theirs – it all falls apart. If your organisation doesn’t stand for something and the work isn’t meaningful to your people, then you won’t hold onto them for very long, again to the detriment of your customers. So yes, culture matters – big time.
How would I describe the ‘way it is’ at Capital? The words I would use are dynamic, fast-paced, innovative, ambitious, caring and fun. As a family-owned business, there’s a real sense of care for our people and that’s seen not only in the many colleagues who’ve stayed with us for a decade or longer but also more recently in the few who have left to explore different careers and returned to us within a year or so.
We focus on high levels of communication through monthly staff updates from the executive to the troops so that everyone knows where we’re going, how we’re getting on and the role that our colleagues play in getting us there. At times we challenge the teams to push the bar even higher or make sense of where things didn’t quite go to plan. I emphasise to my senior team to always ‘deal in truth’ in order to get to the real detail of any issues and make sure we’re dealing with the core of a problem and not the noise that surrounds it.
We invest heavily in video-conferencing facilities so that it’s easy for our colleagues to communicate ‘face to face’ with each other in the Douglas, Castletown, Cape Town or Johannesburg offices. More and more of our meetings with clients are now taking place on Skype or FaceTime or through Microsoft Teams, thereby saving time, money and the environment by avoiding unnecessary flights.
We engage regularly with our customers and the people that introduce business to us to learn what’s going well and what we can do to improve things. We take intelligent risks, once we’ve weighed up the opportunity, considered the challenges and our ability to deliver. We push our people to develop, to improve, to have more impact, rewarding them well and socialising with them as often as we can. On the whole, it’s working. We’ve made great strides in the past few years and we’ve got some truly ground-breaking initiatives in the pipeline in the next few months. We’ve attracted great talent to our business, brought in new ideas but never lost sight of who we are, where we’re going or our enduring values of innovation, integrity and excellence.
When times are tough, investment in people and developing culture are often the first things to go. But in a service business, fostering and instilling a strong and positive culture is essential if you want to do anything with your strategy.