Many people and organizations are still recovering from the credit crunch. The wicked ones : banks and other financial organizations.
What would the general organizational culture be in financial organizations? We calculated the profiles for the Dutch financial sector: a results-oriented business indeed with more focus on people than assumed and a strongwish for a smaller amount of performance and more innovation. The question is: should we endorse that ?
About the Organizational Cultural Assessment
The Organizational Cultural Assessment Instrument (OCAI) was completed around September 2009 by more than 130 respondents. They all work in the industry group Financial and insurance activities.
The OCAI determines the scores on four culture types: Clan culture, Adhocracy culture, Market culture, and Hierarchy culture. Check out the OCAI model for more information or take the test yourself: OCAI One.
Profits and productivity
In the present financial culture, the results-oriented market culture comes first (27,68 out of 100 points) . This culture values winning, reputation, competition, and achieving goals and targets.
Most people who commented on the assessment recognize this: a “work hard, play hard” culture with gigantic bonuses and a board of directors consisting of successful males that are all very determined and dominant. Indeed, earnings and productivity rule. It’s this part that obtained a lot of media attention and that is assessed as having caused the credit crunch.
Concern for people and procedures
But there is more . The actual profile is way more balanced with hierarchy culture counting for 27,30 points. This culture type cares for control, structure, careful planning, clear procedures and efficiency, standardized rules, and stability.
Also, clan culture scores 25,23 points. This people-oriented culture is flexible and welcoming .
Least prominent in the present culture is adhocracy: 19,78 points. The financial sector is least a dynamic, entrepreneurial, and creative workplace right now. Though some top bankers have been proven to be very creative with numbers.
Less performance and more innovation please
As you can see in the profiles below, the red current profile shows a pattern focused on results and structure.
Compare this profile with the blue preferred profile and we find an interesting discrepancy.
Financials desire an upward shift to more flexibility. Adhocracy culture increases 11.7 points and hierarchy culture decreases 9 points.
With a difference of 10 points or more, it’s often vital to take action. These scores illustrate dissatisfaction or willingness to change, and they can be seen as a call to action.
More innovation: desirable?
Both managers and employees desire the flexibility and dynamics of adhocracy culture that values initiatives, professional freedom, experimenting, and so on. As long as you innovate and bring quality, it’s acceptable .
It may be reasonable that they like this. But should we favor this culture type for our financial institutions? It seems that banks have been too innovative already, creating financial constructions that no one could control , and taking too much risk.
We could also argue that a new method of working is needed in the financial sector. Another culture type could become a strong focus point for the future with less concentration on profits and money. Some European Banks began working on a culture that takes ethical issues into account, a working climate that enhances dialogue and allows critical thinking.
It’s an appealing process. The financial professionals that we interviewed in the Netherlands acknowledge the current and preferred culture. They see the call for more adhocracy culture coming from employees who have little space to breathe and feel crushed at times by their production targets and a flood of procedures. All say that the sector is very conservative and lacks good, let alone inspiring leadership in many places. So, perhaps, it’s time for innovation indeed.
