This article was also featured in the Starling 2021 Compendium.
After a year in which ‘unprecedented’ became one of the most overused words in our vocabulary, resilience is a characteristic that remains at a premium for both individuals and firms. The sources of uncertainty, unpredictability and change have been multiple; economic, political, regulatory, technological, societal (including Black Lives Matter) and, of course, Covid-19, which continues to shape our daily lives in both its direct and indirect effects.
As became quickly apparent, this is a pandemic that is at once unifying and divisive; affecting all of us but each of us differently, and with longer term consequences that are still emerging. More immediately, however, we are all working, acting and interacting in different ways to only twelve months ago. Some of these changes may last only as long as the social distancing they are a response to. Others, however, will be less readily unwound. We have invested in skills, IT, processes and structures, and have developed new habits, preferences and expectations. Whether as individuals or organisations, our ways-of-working ‘toolkit’ is heavier now than the one we carried with us into early 2020.
Surviving and thriving in an environment where the only constant is change, requires resilience; the capacity to learn, respond, adapt, anticipate and maintain perspective. Personal resilience is sometimes described as a combination of optimism and realism (to which we might also add getting enough sleep and knowing when to ask for help). But organisational resilience is not achieved simply through hiring individually resilient employees. Tolerate a working environment in which people are routinely tired; keep them out of the loop on decisions or changes until the last minute; encourage group think; reward favourites; behave unpredictably or tolerate a blame culture, and you will quickly ensure that any resilience your employees still possess will be left outside the door every time they enter the (real or virtual) office.
An organisational culture that fosters collective resilience and enables a firm not just to cope with unexpected setbacks but to learn from and build on them, does not happen by accident or because the firm hired optimistic and realistic employees. It requires leadership.
The Financial Services Culture Board (FSCB) – or as we were known until April of this year, the Banking Standards Board (BSB) – is now in its sixth year of working with member firms to help them assess their own unique workplace cultures and collectively raise standards of behaviour and competence. Given our initial focus, these firms have to date been primarily in the UK banking sector. We have also, however, been working with a growing number of firms and other organisations from outside banking and outside the UK. Responding to this wider interest, we have now expanded our scope to enable firms from across financial services to work with us individually and collectively as members, and amended our name accordingly.
Our core information-gathering exercise, the FSCB Employee Survey, received in 2020 (and in the UK alone) more than 73,000 responses across 31 firms. This Survey does not set out to ‘measure’ culture. Each firm’s culture will be unique; a product of its leadership, its mix of employees, its history and its environment. There is no single template for a ‘good’ culture and multiple ways of having a bad one. The value of attempting to measure culture and to compare and aggregate the results across firms would, in this context, appear questionable.
If we cannot sensibly measure organisational culture we can however judge it, and there are things that we can measure to help inform that judgement. The FSCB Assessment framework defines a ‘good’ culture as one that produces good outcomes for customers and clients. It identifies a set of organisational characteristics that we would expect to be associated with good outcomes, and prevalent in an environment in which employees are equipped and motivated to serve their customers or clients well, i.e. honesty, reliability, competence, resilience, respect, responsiveness, openness, accountability and shared purpose. The questions that we ask in the FSCB Survey are designed to explore how far employees see these characteristics demonstrated within their firm. The results can be tracked both over time and relative to other firms and analysed by business area and demographics. We also ask a small number of one-off additional questions in any year to explore specific issues in more detail; in 2020, this included questions relating to inclusion and to the firm’s treatment of its employees during the pandemic.
Drawing on this unique and extensive data set, the FSCB can identify common or emerging themes that inform its ongoing practical work with members. This work may involve utilising the FSCB’s own data science and behavioural science teams, facilitating peer learning and the sharing of experience between members, learning from experience from other sectors, working with academics and subject matter experts, or partnering with or supporting other organisations and networks. Among the themes, however, organisational and personal resilience has been a consistent feature, its importance only reinforced over the past year.
Looking across the FSCB’s findings as a whole – and while these draw on the banking sector, they relate to how people behave in groups rather than in a specific sectoral context, so have we hope applicability well beyond banking and financial services – and drawing also on wider research, what can we say about what matters for organisational resilience? Three points in particular emerge for leaders and managers.
A sense of fairness is deeply rooted in us, even as very young children. Unsurprisingly, therefore, whether people feel that they (or their colleagues) are being treated fairly by their employer, has fundamental implications for the culture of the organisation and its resilience.
In all walks of life, acts of fairness and kindness tend to be reciprocated. Unfairness also produces a reaction; behaviour that would be viewed as unethical by employees in one firm, may be regarded by those in another as an acceptable way of ‘righting the balance’. If some teams or groups of people are seen as more favoured than others, collaboration may be stymied, effort diverted to competing for status or recognition, and/or employees disengage or leave. Unfair hiring or promotion practices, meanwhile, will limit the availability of talent to the firm and the range of views and experience it has available to draw on, reinforcing a tendency to groupthink and undermining its resilience.
Our sense of fairness also affects our health and wellbeing. In a longitudinal study of UK senior civil servants, the question most closely correlated with subsequent ill health was whether the respondent felt they had been unfairly treated. In our own work with member firms, we have found that employees from business areas that score poorly in the FSCB Survey on personal resilience questions, are more likely to refer in focus group discussions to unfair treatment than are employees from business areas in the same firm with stronger personal resilience scores.
The shift in 2020 to working from home brought for many firms sometimes unexpected benefits in terms of faster decision making, more flexibility and greater autonomy for employees. New working arrangements, however (and especially as and when some staff return to the office for at least some of the time), bring new challenges of their own, including around fairness. More autonomy may mean less consistency in the way that things are done around the firm; some individuals or teams may also have more flexibility than others, or be perceived as having better working environments, greater influence or more opportunities to be recognised and rewarded. Fairness and autonomy are not opposites. Neither, however, are they unrelated. Striking the right balance will be central to the success of post-Covid 19 workplace arrangements. How to tell whether the working environment is seen as fair or not from perspectives other than our own, takes us to our second point.
The principle that other people matter and are worth listening to – whatever the status of the speaker or the listener – is a second key attribute of a resilient culture. Employees will not share learning, ideas or (even more importantly) mistakes, or ask questions or challenge something they are not comfortable with, if they think no-one is listening; nor will they do so if they think that the listener will as a consequence make them feel small, or even worse. If diversity is about the breadth of knowledge and experience available to the firm, inclusion determines how far this knowledge and experience is actually utilised; the wisdom of crowds only works when everyone has an independent view that they want to express and feel safe to do so. Speaking out or going against the norm is always a challenge, and creating an environment of psychological safety can be as difficult in a small, family-like organisation as in a large and complex one.
The extent to which people feel included, listened to and respected can vary considerably not only between organisations but within them. People in under-represented groups may face particular challenges, as our Survey findings illustrate.
- In 2020 we asked employees across the UK banking sector whether they felt accepted at work and able to be themselves at work.
- 91% of respondents who identified as White British answered yes to both questions. This fell to 84% among respondents identifying as being of mixed/ multiple ethnicity, 83% among those identifying as Asian/ Asian British, and 78% of Black/ Black British respondents.
- 90% of respondents who said that they did not have a disability felt both accepted and able to be themselves. Among those who said that they did have a disability, this fell to 77%.
- As in 2019, employees who identified as White British answered most of our Survey questions more positively than those who identified as being of any other ethnicity. The largest differences came on questions relating to ethical behaviour and speaking up.
- 9% of White British employees said that it was difficult to make progress in their firm without flexing their ethical standards, compared with 23% of Black/Black British or Asian/ Asian British respondents.
- Employees identifying as Black/ Black British or Asian/ Asian British were more likely than White British respondents to be worried about the negative consequences of speaking up, and less likely to feel comfortable about challenging a decision made by their manager.
- Employees with a disability answered our core Survey questions more negatively than those without. This characteristic had a greater explanatory effect in several questions than any other demographic factor we collected. The gap was particularly marked on questions relating to personal
- 36% of employees without a disability said that they often felt under excessive pressure at work. This compared with 54% of employees who said that they did have a disability.
- 15% of respondents without a disability said that work had a negative impact on their health and wellbeing. Among employees with a disability, this proportion was two and a half times higher, at 39%.
Research suggests that a sense of not being listened to is also associated with higher staff turnover and exhaustion. Our own FSCB Survey finds a close correlation between questions about being treated with respect, and those relating to both wellbeing and speaking up.
The much greater use now of video calls into people’s homes has opened up new channels of communication, especially in terms of senior leaders engaging directly with staff. It can, however, make some aspects of listening harder; in particular, picking up non-verbal cues or having unscheduled conversations. Creating new informal channels of communication, ensuring that line managers have the skills and confidence to ask questions and to listen in a very different working environment, and leading by example when it comes to asking questions, admitting mistakes and accepting challenge, becomes all the more important in an on-screen world – and even more so, going back to our first point, when some people may be in the office and others not. And as ever, what matters is not only doing something, but being seen to keep on doing it; which brings us on to our third point.
What leaders and managers do matters more for the culture of the organisation than what they say. The behaviour of those in positions of influence needs to be consistent with the firm’s values if the latter are to mean anything. From a resilience perspective, however, consistency matters not only in terms of what is said and what is done, but also in what is said and done from day to day.
Unpredictable genius can achieve great things. Most of us, however, are not geniuses, and unpredictability on the part of a leader or manager comes at a cost to those around them. When the mood or response of someone with authority cannot be anticipated on a day to day or even hourly basis, time is spent trying to guess what they might want, interpreting their words and actions (however unintentional), avoiding risk and responsibility, hiding mistakes, building alliances, preparing for multiple scenarios and generally worrying, rather than being productive, innovative and collaborative. Leaders can be geniuses! But for a genius organisation that learns, adapts and continuously improves, they need also to be consistent, reliable and predictable in their values and behaviour – and especially at a time when every other aspect of their employees’ lives may feel particularly uncertain and unpredictable.
Navigating the past year has, for many organisations, been like learning to walk in a different way; putting the weight on different muscles, continuously rebalancing in response to external and internal information, and trying to stay upright while retaining a sense of direction and momentum. The pace may sometimes have been erratic, but many firms have also surprised themselves at how fast in places they have been able to run. This is, however, a marathon rather than a sprint. Sustainable performance requires resilience, and organisational resilience demands a culture in which fairness and respect are consistently displayed by those in positions of influence. Building and maintaining a good organisational culture is a core responsibility of boards and leadership teams, and one that they owe to their customers, clients, investors, stakeholders and employees. It is also a challenge. And in 2021, it is also an opportunity.