The Financial Times headline read ‘City bankers battle with quandary of ethics versus career’ and described how:

“Mr Carney has faced criticism over the BoE’s own behaviour after Charlotte Hogg, its newly appointed deputy governor, admitted to giving false information to a parliamentary committee.” (1)

Our experience with organisational culture and rule breaking tells us that it is unlikely that Ms Hogg told a deliberate lie. It is much more likely that she just didn’t notice that she hadn’t complied with the rules. In industries with high physical safety risks, people talk about situational awareness – you look at a working environment and either you see the danger or you don’t. Lord Cullen, in his report on the Piper Alpha disaster, from where so much of the learning around what people do in risk situations comes, stressed that attitudes to rules are as important and sometimes even more important than the rules themselves. He described a strong safety or risk culture as having a “chronic sense of unease”.

So where was Ms Hogg’s chronic sense of unease and why did she not sense that she was stepping over the line? What does this say about the Bank of England’s culture? In situations like this, the media so often focus on what a “wrong-un” an individual is. This may simply be the wrong place to look. What if the individual is little more than a cypher for the culture of the organisation of which they are a part? From this perspective, the organisation would have to look much deeper into its own set up and need to understand much more clearly whether its operating culture really is working for it.

There are no short cuts here. Culture is like the operating system running in the background on your computer – you tend not to work on it, but it governs precisely how the computer operates. Managing your organisational culture is an adaptive, as opposed to a technical, challenge. A technical challenge is defined as one that can be solved by the knowledge of experts, whereas an adaptive challenge requires new organisational learning, which is best facilitated and drawn out of the organisation, not externally drummed into it.

Managing culture is a painstaking business, where management teams are frequently making qualitative judgements about how the organisation’s culture is functioning. Applying metrics to culture helps to make it feel less threatening, but doesn’t necessarily help us understand or change it. Metrics offer the illusion of precision, a supposed certainty, and people feel comfortable with numbers because they provide a universal language that allows comparison and are felt to be objective. But “objectivity” is not enough when it comes to your organisational culture. Metrics will give you a certain type of understanding, but a rich qualitative analysis will provide the feel and insights on which you can act.

There is no single universally good organisational culture. But there is the culture that suits the way your organisation functions and can help it deliver its organisational goals. In the area of culture, comparisons may indeed be odious. Probably the best advice, is “to thine own self be true” – and that applies both organisationally and individually.

As you think about these issues, you might want to ask yourself some questions:

  • How would you know if your culture is getting in the way of your business objectives?
  • How often do you discuss your culture at Executive Committee?
  • As a management team, do you see a direct link between your culture and the bottom line?

If you would like to talk about the ideas in this piece and the steps that could work for you, just contact us.

(1) Financial Times (14/3/2017)

Authors: Ian McDermott and Richard Lewis