Creating workplaces cultures
18 February 2021
18 February 2021
Recommendations from the Financial Conduct Authority (FCA) about how to create a purposeful workplace culture.
The ongoing pandemic is transforming the ways insurers are working while simultaneously presenting them with an opportunity to drive cultural change. Leaders at all levels play a vital role in shaping the culture of an organisation, providing behavioural cues to their teams and wider organisations. Leaders should consider how the way they lead may have changed and what skills are needed to successfully lead in these uncertain times.
The insurance sector needs to repair its poor reputation. Whether this sense of mistrust has arisen from the banking crisis, the business interruption test case or media reports of unfairly rejected claims, there are things that must be collectively addressed. But for there to be any meaningful change across the sector, first it must come from within.
Last year the FCA published DP18/2, a discussion paper on “Transforming culture in financial services” that was supported by a series of lectures and webinars. Talking about the need for purpose, Jonathan Davidson, Executive Director of Supervision (Retail and Authorisations) at the FCA, said:
“Purpose is a key reason people come to work. While financial reward clearly plays a role, people also work to achieve individual fulfilment and a sense of personal satisfaction. If organisational purpose resonates with individual purpose, then employees will be more engaged, and teamwork and performance will be stronger. Individual purpose and a sense of identity (how I define who I am) are overlapping and it was interesting that this also came through strongly in the work we have been doing on the power of nonfinancial incentives. Recognition of our identity/purpose is a very powerful motivator. Empowerment of an individual to fulfil their sense of identity/purpose is even stronger. So, purpose is also important for business. It can attract future talent, help businesses identify and manage risks, and help firms focus on their longer-term goals over short-term pressures.”
But what does a healthy culture look like? Each workplace is different, made up of people from different backgrounds, skills and experiences. Therefore a culture should reflect the entire workforce, not just from the top level down. Culture needs to be purposeful with a meaning behind it. It should also be inclusive and worthwhile. This means listening to employees from all levels and allowing them safe opportunities to speak out and their opinions feel valued.
Office environments were traditionally a collaborative space where people could meet, raise their profile and be seen to be getting the job done. Remote working has changed working styles overnight, meaning that it’s not enough to be seen to be doing something - it actually has to be done. Greater flexibility to people’s individual circumstances and schedules has now taken greater priority over restricting everything within a fixed number of working hours. This has hopefully encouraged people to identify what suits them best to create a better working day.
But how are these changes identified and implemented? Purpose is not just something that’s a whim by the CEO. They need to be able to trust employees to have and know the purpose of the company and do the right thing. How solutions are developed to local problems can lead to higher levels of engagement. DP18/2 highlights the following areas to consider:
- using behavioural science to guide incentives and cultural change
- looking beyond the role of leadership in effecting change
- applying strategic focus to the continuous process for adapting culture
- fostering environments of trust to encourage openness and learning
- applying a systems perspective in assessing both internal culture and external influencers
Change for the better
Lockdown has provided some employees with greater visibility of their leaders and CEOs who have communicated more regularly through videocalls, intranet posts or company updates. Establishing better communication across staff levels has demonstrated a commitment to customers and people internally, meaning that the voice from the top comes from a more authentic place.
But how can leaders create that culture and make it sustainable? Lockdown restrictions accelerated the change of working styles and patterns overnight. Many adapted well, acknowledging that fixed and rigid process that were usual practice within an office were arbitrary. By recognising the individual capabilities and resourcefulness of employees, this organisational shift allowed employees to influence their own working styles in a more collective way.
Marc Teasdale, the FCA’s Director of Wholesale Supervision, gave a speech on the drivers of culture and the role of purpose and governance, identifying four drivers of culture:
- People policies
The shift from the leader, not just as command and control, but to understanding their workforce has created a new managerial style that is both relevant and progressive. Leadership must prioritise understanding people and themselves – not just running a company and keeping it afloat. By recognising the diversity of experience and the response to experience, leaders are better able to identify the worries workers have and how to action them. People have become more self-reflective, challenging cultures prior to COVID by identifying what worked and what hasn’t. Innovation and emotionality have developed mutually so that workplaces are now more flexible and intuitive.
But will leadership revert back to what we had before? We can’t go ‘back to normal’ because leadership has demonstrated they’re not detached from the current emotional and political context. Plus leadership has been redefined beyond roles and titles to actions and activities. Most informative innovation has emerged by moving away from old models of leadership that were perceived as ‘all powerful and all knowing’ rather than reflective and inclusive of the entire workforce.
By learning from failures as well as successes there will be a move towards a people-shaped culture. This can then be reflected in the diverse make-up of a company that will influence the decisions made in processes that customers want to feel truly acknowledge them. Remote working could be a catalyst event in allowing a more democratic way to create a new organisational culture - one that can be continuously adapted to suit the ever-changing workforce.
- DP18/2: Transforming culture in financial services
- Professional Focus: SM&CR and regulation
- Senior Managers & Certification Regime (SM&CR) Good Practice Guide for Claims Professionals
- Senior Managers & Certification Regime (SM&CR) - A Good Practice Guide for Insurance Brokers
- Speech: The business of social purpose by Jonathan Davidson
- Speech: A regulatory perspective: the drivers of culture and the role of purpose and governance by Marc Teasdale
- Speech: Why does the FCA care about diversity and inclusion? By Georgina Philippou
- Webinar: Leading healthy cultures in a post-Covid world
- Webinar: using assessment as a tool to understand culture
This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), Society of Claims Professionals or Chartered Insurance Institute, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the Society or Chartered Insurance Institute.