We know it’s extremely important; we know it’s difficult to measure. There is no simple definition. We know we can’t just hit a switch to change it.
"Internal culture reviews are a critical element in shaping a better culture.”
But culture is about what we believe and value, how we do things and how we behave. At ANZ, for example, we’re striving to encourage a “speak up” culture to alert us to when things are not quite right.
Internal culture reviews are another critical element in shaping a better culture. We have a team of specialist people in our Internal Audit (IA) area, led by Emma Walch, who undertake cultural audits (or, properly put, cultural assessments) of our organisation. They highlight themes and areas on which we can focus.
Internal Audit’s overarching aim is to support the executive committee and board by providing independent insights as the bank undertakes a values-led cultural transformation. The work will also support the board in meeting regulatory requirements such as BEAR (the Banking Executive Accountability Regime) and the CPS 220 risk management prudential standard.
Themes and factors
Our approach focuses on identifying themes and underlying factors and their impact to help the business drive sustainable change toward ANZ’s aspirational culture. To ensure we continue to be relevant we have:
- Evolved our methodology and approach (including bringing the survey in house, building our own data analytics capability and piloting action effectiveness pulse checks) to enhance insights relating to cultural change.
- Developed stronger alignment with internal stakeholders (including Risk and Talent & Culture) to draw on additional data points to strengthen insights and support the business in developing actions to drive positive change.
- Engaged internally and externally, including with industry peers, on leading and evolving industry practices, seeking to test, learn and evolve our approach and methodology.
This is not a blue-sky project. We piloted it in Singapore in 2016 and the business was sceptical. But they came back after the first one and said the process was really useful.
These assessments are not like a classical audit. We use surveys and follow up with focus groups to understand the context. It is robust process where we’ve engaged with the academic literature and submitted to scrutiny by external consultants and regulators.
To date the audits have involved more than 20,000 of our 40,000 people; quite significant. The themes we surface get shared with the board and management.
The challenge of a “speak-up” culture is a good case study. We haven't had the greatest scores when we ask about how people feel in raising issues. Historically, the number of people who feel safe to do that has been about two thirds. As a benchmark that's not horrible but it's obviously not where you'd prefer it to be.
What we found in our cultural audit though was really interesting. When we delved into why people felt they didn't want to put their hand up and raise an issue we found an unexpected - although with hindsight, not surprising - result.
With the ANZ culture - which was well intentioned - when you raised an issue we'd say: "That's really terrific, great you've raised it. Why don't you lead a team and go away and do the work and fix it? We're going to empower you to do that."
So of course people sit there and think: "Well I'm already busy, so I'm not going to put my hand up. I'll just end up with more work."
We wouldn’t have learned that through a survey. But this is a practical problem we have to sort out. And let me add, the board's been really interested in this cultural work.
There is an overlap with the more traditional internal audits. The work from there does inform us about where we should focus our cultural reviews. Additionally, the board can direct the audit team to undertake specific work. Just as with any emerging issue, the board can require an audit plan.
After an audit there will be a report, it will contain recommendations. And business leaders will be held to account to develop and deliver a culture plan. Actions addressing problems identified in the cultural reviews by Internal Audit are formally documented and tracked to completion.