A strong corporate culture mobilizes all resources in one direction. This is of critical importance to decentralized organizations in general and to super community banks in particular.
The banking business is ever-changing. The pace, rate, and speed of change are exhilarating. Therefore, the ability to manage change is a critical success factor. Building corporate culture is an excellent tool in managing and incorporating change. It requires the following ingredients:
Direction from the top. Vision is the chief executive's main job. Senior management must create a clear and cohesive vision that can unify the company.
Be single-minded about cultural change; forget the scars, just keep going.
Common, unifying culture enhances organizational stability and the ability to deal with change, hence its critical importance.
The bottom line is that unified culture enhances profitability, because it gets the most out of people and assures that everyone is moving in the same direction and not at cross-purposes.
Emphasis on incremental change. We do not to leap a tall building in a single bound. Corporate culture is a series of incremental changes to people's behavior that ultimately achieves critical mass. We must be patient yet tenacious.
Communicate, communicate, communicate. Even though it seems to you, the chief executive, that communication has been clear and complete, the troops are thirsty for more. You cannot over-communicate.
The chief executive's commitment must be clear. Without senior management's unwavering support to the corporate culture and without them walking the talk, corporate culture will not run.
Implementing cultural change smoothly. Cultural change is easier when your back is against the wall. People are much more receptive to drastic changes and learning new things when they feel they have no choice. Utilize change points and trigger opportunities to bring about cultural change in a smoother fashion.
Leading by example. To make corporate culture work, behavior and message must be consistent. Don't talk about flattening the organization when you make all the decisions. Don't talk about entrepreneurial spirit when people are penalized for any risk, even those taken within corporate guidelines. Make sure you walk the walk and act according to the values you would like to instill in the troops.
Rewards and incentives. Reward non-negotiable performance first, to send a clear message.
To some, bonuses are less important than corporatewide recognition. Customize the incentive to the appropriate motivator. Your best salespeople do not need more money - they need more recognition. On the other hand, tellers would prefer cash to a nice plaque.
Overall corporate performance becomes increasingly important in bonus programs as you go up the corporate ladder. Make sure people do not build silos that are supported by bonuses. In other words, if their business unit does well and the company does poorly, people shouldn't get a significant bonus. Corporate performance, individual performance, and unit performance must be aligned, and the rewards must reflect that alignment.
Communications. Senior management must lead communication of corporate culture and repeat, repeat, repeat. All managers have to be involved. A single person cannot possibly transmit the message effectively. One needs to start with the trainees in the orientation program and end with the board.
The non-negotiables. Clearly identify those corporate values that are the backbone of the company. Clearly signal to all employees what really counts. Nonperformance of these key values could be grounds for dismissal.
Vision statement. Have a vision statement that clearly distinguishes your bank from others. Make it as brief and as specific as possible. When your people read it, they should be positive that this is their bank you're talking about.
Living with change is a way of life for financial institutions. Corporate culture provides an anchor and direction for dealing with change. Dealing with continuous change is all about anticipating problems.
Corporate culture helps you anticipate problems and deal with those problems in a consistent manner. It cannot be turned on and off. It must be ever-present, a core of values that are truly held throughout the company and provide the backdrop to its direction, decision-making, and resource allocation.
