The recommendations in the Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (the Hayne Report) will no doubt lead to those organisations searching for ways to measure their cultures that meet the requirements set out in the report.

A few comments deserve consideration during this process:

1. The report states that culture is “the shared values and norms that shape behaviours and mindsets within the entity’ (page 375). But such a definition does not recognise that mindsets, particularly at the top of the organisation, in turn contribute to creating the culture. Mindset and culture are mutually reinforcing (upwards spiral or downwards spiral) factors – the culture is influenced by mindsets, and mindsets are influenced by culture.

    

   A better definition might be “the shared beliefs, norms and expectations that guide the way people approach their work and interact with each other” (Robert A. Cooke Ph.D. Professor Emeritus University of Illinois) Such a definition captures the essence of ‘how people believe they are expected to behave in order to fit in, get ahead and in some cases simply survive’.

    

2. The Hayne report also states that culture can be assessed (page 376) but then repeats the G30 Banking report statement that “while cultural norms and beliefs cannot be explicitly measured..” (page 391). This latter statement is quite incorrect. The Human Synergistics Organisational Culture Inventory® (OCI®) has been specifically designed to do just that – measure norms and beliefs and has been doing so for over 20 years. It’s been used by organisations all around the world, by thousands of organisations from assessing risk in nuclear power stations to helping build profitability in FMCGs to developing constructive cultures in the financial services industry.

    

3. The case studies in the report include several references by CEOs to the ‘culture surveys’ they have used in their companies. They have referred to various engagement surveys and ‘voice of the employee’ type surveys. The problem here is that these measure climate, not culture. There is an incorrect assumption that if these surveys show positive results, then the culture must be ok. Whilst there is a link between climate and culture, it’s not always what one might expect. Enron was a classic example of a company with a great climate (people loved working there) but a terrible culture, which ultimately led to their downfall.

    

4. By focusing on climate, these companies are addressing symptoms. Not causes of culture. They are measuring what people think they see going on and how they feel about it, not the shared values and norms.

    

5. In some case the surveys referred to by these CEOs were ‘in-house’ surveys developed by audit or HR groups. In-house surveys offer no benchmarks and are inevitably lead to inaccurate conclusions with assumptions about what might be considered a ‘good’ or a ‘bad’ core.

    

6. The Hayne report focused very much upon remuneration practices as, if not a driver of culture, at least an indicator of it. Whilst remuneration systems are drivers of culture they are not the only ones. Structures, systems, goal setting, selection, training, reinforcement systems, job design, communication systems and leadership are but a few others.