When the FCA originally communicated its four key drivers of culture a few eyebrows were raised when one of them was defined as ‘purpose’.
All firms understand their purpose, right?
Win sufficient customers to generate income to pay salaries, cover the office rental and fund future marketing and promotion to keep the cycle going. Oh, and stay compliant to please the Regulator. What’s the problem?
In the first instance, a firm that’s confident in its purpose will have every employee knowing what it is and living by it. Leaders of firms will show us every day what purpose means to them.
Other than ticking a few boxes there’s no indication with that attitude of an authentic purpose or a firm run on values that matter – and certainly not the sort of authorised company the FCA wants on its books.
Reckon I’m being a bit mean? Not really.
Look, I’m not a utopian. I realise every business needs to make a profit and if you’re leading a firm then it’s pretty much your duty to do so.
The challenge comes when that becomes your sole goal. Almost every non-financial misconduct case I have seen as a compliance consultant has been against firms that lack – or have lost – their purpose.
Conversely, the ones who do well in business and look good in the Regulator’s eyes are those that have a clear sense of purpose. They have a vision of what they want to achieve and how they aim to get there. They make sure everyone is on board to make the mission happen.
‘Purpose’ to the FCA is even simpler. It’s about understanding how your firm’s products and services work for the benefit of everyone – customers (most obviously) but also employees, business associates, appointed representatives and so on.
Trouble is, too many firms freewheel in a comfort zone. ‘We haven’t had any complaints’ is a frequent comment you hear from firms that plod along. Some become tone deaf. They don’t actively encourage feedback. At best, they’re ambivalent about countenancing opinion.
The same approach will often apply to employees. Psychological safety is so low they dare not raise they head above the parapet for fear of being shot down. This can become deeply ingrained behaviour. Compliance over culture. Change only happens to meet regulation – and if there are no changes or tightening of regulation required, little happens to alter the culture of the business.
Failure to devise and communicate a sense of purpose and plan to maintain it can often leave employees uncertain about the firm’s values and where they fit in, not least if there are no plans for training, career development and Continuous Personal Development (CPD). Such rudderless values can lead to a high turnover of staff – with undervalued employees leaving at the first given opportunity.
Firms with a clear sense of purpose readily generate ideas. They actively encourage employees to provide thoughts on how to improve things. They realise the purpose of the firm is to function better and recognise their role as players in their communities. These firms view the FCA’s Consumer Duty as an opportunity to not just meet, but exceed, the requirements.
To firms with purpose, the future is boundless. Who wouldn’t want to work for someone like that?
If you would like to leave a comment, observations, pose a question or request further information about how to embed a good culture into your business feel free to contact me.
OTHER BLOGS IN THIS SERIES
Driving cultural change – the case for culture
Driving cultural change – leadership
Driving cultural change – governance
Driving cultural change – people
Psychological safety – is it for real?
ABOUT THE AUTHOR
Julie Ampadu is the current chair of The Association of Professional Compliance Consultants (APCC), a member of the Reporting & Data Standards Transformation Board for the Bank of England (BoE) and Financial Conduct Authority (FCA) as a representative of the APCC and the founder of Chameleon Compliance Ltd and Business Chameleon Ltd.