Barclays and cultural change

For my first post I want to talk about the major business story of the last week...Barclays.

I am not a banking expert, so I'm not going to focus on the technical aspects of what Barclays did to allegedly "fix" LIBOR...I'd rather leave that to MPs and journalists who claim to know more about it.
BUT, first things first, the photo above is a joke and has been photo-shopped. I do not want to be part of propagating the misinformation that this is real...
The one observation I do have about the technicalities: the fact that Barclays' submissions were always at the top of the range of the views on LIBOR from all the banks that submit, suggests to me that they were a) consistent and b) that they were often excluded from the calculation as an outlier. Therefore the actual influence on the LIBOR was minimal, if not non-existent.

What I find interesting from my point of view as someone engaged in business transformations is the expectations we can all reasonably have on the cultural changes that are (almost) universally acknowledged to be necessary within Barclays...and likely within other banks once the full story comes out.

Cultural change is hard.
For an individual to overcome a "cultural change" takes dedication, consistency, perseverance and a lot of will. My favourite examples of this relate to nutrition, a subject I have researched a lot about over the last few years. Every person has a nutritional culture, developed over many years from family influences, experiences, beliefs and habits. Whether you eat lots of carbohydrates, if you are vegetarian, if you follow the Paleo or Primal diet and lifestyle (as I do) - all of this stems from a wide variety of influences. My personal journey of cultural change over the last 2 years, from a classic SUKD (Standard UK Diet - credit to Simon of @Primalliving) of cereals for breakfast, sandwiches for lunch and ready meals or fast food for dinner to a Primal diet (with appropriate credit to Mark Sisson and The Primal Blueprint), there have been many challenges, stumbles, back-slidings. I am still tempted by croissants and tortilla wraps - and give in to them albeit less often than I used to. It's hard. I keep going largely because I have control over what I eat, I am convinced by the science and the experiences of myself and others that the Primal approach works and is healthy for me. In simple business terms; I have a vision, I have a strategy, I have accountability, and I have power.


For a company, cultural change can be even harder to achieve. The sheer numbers of people involved, each with their own views, beliefs, principles and experiences make consensus hard. Usually, the task of shaping the vision and strategy fall to the Board or the CEO.
And here we already see the largest problem Barclays faces. It would likely have been speedier, and possibly more effective, for Bob Diamond to have led the cultural change. Being already accepted by the Barclays people as their de facto leader already gives him a massive head start vis a vis his successor. But, the vast majority of people, both inside and outside Barclays, now agree that he had to go and his position had become untenable

In companies, when a new CEO takes office, there is an inevitable period of "storming", when people will air their differing views on the suitability of the leader. In summary these will fall into 4 groups:

• We should never have got rid of the old CEO
• This new CEO is the right person for the job and I'm fully behind them
• We should have appointed Person X (a specific other person)
• The most difficult group, for whom no CEO would be good enough

In order for the new CEO to effect cultural change, they must first recognise that the needs of these groups are very different. And while the vision for the new culture will be, indeed must be, the same for everyone, the strategies of engagement for these groups have to be assessed individually.

The storming and norming phases may proceed at different speeds and with a different focus.

In one transformation I was involved with, I was "injected" as the new COO, along with a new MD. This was in a country that was not native to either of us, nor did we speak the primary language. The business was declining, and quite rapidly...business changes (like pricing, structures, people, policies) were all needed, but so was a cultural change. This particular country had a bit of an insular reputation for rejecting anything from outside as irrelevant to them. So the struggle was for the team to accept direction from these "outsiders", while not giving up on certain aspects important to their national and corporate cultural identity.

Now I don't claim to have been 100% successful in the task, but certain changes were made. Some members of the team were thought-leaders, accepting us as a new management team immediately, and ready and willing to go with us in the new direction we wanted to take the business. Some of these knew we had it "right" and had been longing for the change. Other colleagues trusted these thought-leaders and followed them more than us. But that was still a big tick in the box. As long as people were going in the right direction, I knew the cultural change would come in time.

But there were some big issues. Interestingly in my case, these were some other members of the management team, in particular 2 guys that had been around the longest, and were partly responsible for the previous poor performance that we were trying to recover from. After months of cajoling, inclusion, consultation, we finally gave up and just started directing. When our efforts were still undermined and ignored, the door was the only thing left to show them. If I had my time again, the one thing I would do differently is to have shown them the door much sooner.

And so back to Barclays and the learning for them...there will no doubt be a number of others, some of them in senior positions, that need to be shown the door. My view is to determine who is critical, analyse which of the 4 groups they belong to, and then deal with them appropriately. And that means quickly.