Is Corporate Culture the Key to Restoring Trust in Financial Services?
In a recent article from Pensions and Investments, Pacific Investment Management’s COO, Douglas Hodge, argues that in order to restore trust, financial services must begin with culture. A strong culture is a corporate asset and in order to maintain a strong culture, values and initiatives must be consistent across an organization. Hodge explains that finance is meant to “serve the broader interests of society,” and with this in mind culture must be based on serving client needs, sound risk management, and a sense of responsibility and commitment, therefore fortifying trust and leading to positive business results.
This article piqued our interest because we are big believers in the power of consistent brand messaging, employee engagement, and active communication in building an effective and long lasting corporate culture. Building off of Hodge’s convincing argument about culture, we have curated four articles that we think most effectively outline and examine the meaning of corporate culture and pinpoint the best practices.
This article from McKinsey Quarterly brings about a pertinent issue that we’ve examined in recent months. During these tough economic times, business leaders should seize a key opportunity to motivate employees via nonfinancial incentives rather than through traditional bonuses, increased pay, and stock options. McKinsey’s study shows that praise from managers, one on one conversations, and opportunities to take on leadership roles are just as effective motivators, and help with employee engagement. Although some companies are reluctant to adopt nonfinancial incentives due to the fact that ‘money talks,’ other companies are doing the research to understand what motivates their employees and acting on those findings. An HR director at a mining company stated of their newly implemented incentive, “one on one meetings between staff and leaders are hugely motivational…they make people feel valued during these difficult times.” Do nonfinancial incentives have a more valuable impact on employee engagement and achieving company goals in the long run? Read the article.
Finding the best talent is a top concern for companies these days, however in addition to that, motivating and keeping current employees interested is an entirely separate initiative. As the previous article mentions, nonfinancial incentives are effective and as Tony Hsieh, CEO of Zappos, says “is it going to be the companies that make their employees happiest that will attract the best people.” With talent and incentivizing being the key to corporate success, companies like Google are allowing their employees to devote 20% of their paid-for time to work on whatever they want. Google believed this incentive would promote creativity and inventiveness among the workforce, therefore increasing the likelihood that talented employees will stay on board because they are actively engaged. “Work, rest, and play” are the keys to motivating employees, and more and more companies are finding innovative ways to keep their employees from being burnt-out. Read the article.
This article outlines the findings from a survey conducted by Burson-Marsteller, a PR firm, and Great Place to Work Institute, which asked senior executives from top ranked companies about the value of a positive work environment. Unsurprisingly, companies ranked culture at 80% when asked which elements of a workplace most benefit daily tasks. In this unstable business environment, investing in employees is the key to positive results. This article outlines what top companies have in common when it comes to a strong culture: knowing your audience (and ensuring they know you), improving work-life, and career development are just a few of the tactics explained here. Read the article.
There’s a lot of talk about the importance of culture, but at the end of the day companies must ask themselves, what is culture? This article from HBR explains culture in the context of business and identifies the “3Cs” of culture: clarity, communication, and consistency. The article states of business culture, “culture guides discretionary behavior and picks up where the employee handbook leaves off…culture tells employees what to do when the CEO isn’t in the room which is of course most of the time.” Culture need not be a fixed notion, but rather something that is built, defined, and facilitated by strong leaders. How can top companies create a culture that is all their own? Read the article.
Clearly culture is just as essential to business success as talented employees, enthusiastic investors, and loyal customers. Recognizing the importance of culture and committing the time to building it internally is what makes for fluidity and consistency throughout a business community. It is no longer enough to provide monetary incentives; keeping employees at their best performance is about building an environment that allows freedom to create and innovate, therefore creating a culture that is worth investing in. In the B2B world, employees represent a company’s most significant communication channel to external audiences. Employees must feel a sense of shared purpose, a fundamental connection to the company’s mission, vision and values, and an understanding of how they contribute to the company’s success—in other words, a strong corporate culture.