Banking on change for the better

In an ideal world, companies change in anticipation of the future, rather than having change forced upon them by events.

However, the events following the financial crisis raised profound questions about the way in which the financial services industry operated. Following the Libor scandal in 2012, along with related industry issues like the mis-selling of Payment Protection Insurance and interest rate swaps, the entire sector’s reputation was left severely damaged.

Barclays has not shied away from the challenge of rebuilding that most precious of business assets, the trust of its customers, clients and stakeholders. One of the first actions Antony Jenkins took when he became Chief Executive of Barclays was to launch a programme of cultural change within the bank, while establishing a new set of Values and Behaviours for all staff.

As a direct result, the company launched a significant and complex change programme, focused on values and behaviours, throughout its business, which is being embedded in day-to-day management processes. This programme is part of a broader initiative called Transform. Its ultimate aim is to make Barclays the partner of choice for all its stakeholders, or what it terms the ‘Go-To’ bank. That means it wants all of its customers to be advocates of Barclays. And that’s a big ask.

The Transform programme is underpinned by a Purpose, Values and Behaviours approach which is key to the Transform ethos. Barclays’ new Purpose and Values launched in January 2013. They represent the set of standards under which all the bank employees work, and against which performance is assessed and rewarded. The newly defined purpose is to “help people achieve their ambitions – in the right way” and is supported by five core values:
• Respect: we respect and value those we work with, and the contribution that they make
• Integrity: we act fairly, ethically and openly in all we do
• Service: we put our clients and customers at the centre of what we do
• Excellence: we use our energy, skills and resources to deliver the best, sustainable results
• Stewardship: we are passionate about leaving things better than we found them.

For these values to have true meaning, employees need to live and breathe them, not just most of the time, but all of the time, the bank insists. “All our colleagues will need to understand and embrace these values, and most importantly understand how to apply them in their day to day work,” explains Jon Harding, Barclays’ Global Head of Senior Leadership Group Talent and Development

To help support the embedding of the Values, Barclays recruited more than 1,500 colleagues as ‘values leaders’, to act as ambassadors and help to explain their importance to every employee within the bank. The entire global workforce has now been on a values training course, to understand their importance and how they apply them in their individual roles. This training is now an integral part of the induction process for all new joiners at the bank too.

To further unite employees around these Values and Behaviours, the bank published ‘The Barclays Way’, a global code of conduct to govern its way of working across its business. This replaced a number of individual business division codes of conduct and aims to encourage a consistent way of doing business, aligned to the Values. It encourages colleagues to speak up if they witness actions that are not in accordance with the behaviours. Employees are also required to attest to The Barclays Way on an annual basis.

To assist employees with values-based decision making Barclays has developed tools and guidance, including a Reputation Risk Framework and a ‘Citizenship Lens’. The Reputation Risk Framework helps assess the reputation risk associated with business decisions and how these risks should be mitigated. It encourages ethical conduct and underpins the governance changes outlined in Transform. “This Framework is designed to ensure that reputation risks in our business are reviewed at the right time, at the right level and managed to the same standard across Barclays globally,” says Philippa Birtwell, Head of Reputation Risk Management.

The Citizenship Lens is applied alongside other decision-making tools to help Barclays move beyond legal, regulatory and compliance concerns, to consider broader societal impacts and opportunities. Training programmes for employees on using these tools are currently underway. In applying this Lens, the bank is looking to ensure that it is taking into account the interests of its customers, clients, shareholders and the communities in which it operates, in the decisions it makes every day.

The Citizenship Lens covers five questions:
• How are we making a profit?
• How are we being transparent and clear in
our communications
• How are we creating long-term value
• How are we creating shared value
• Is this the right thing to do?

To measure and report on progress, Barclays introduced a Balanced Scorecard, which the bank describes as ‘the final crucial piece of our plan to embed the right culture in our business and become the ‘Go-To’ bank’. This Scorecard defines what the bank needs to achieve over the next five years to achieve its goal. It also defines the five areas of focus; Customer & Client, Colleague, Citizenship, Conduct and Company. In 2013 under ‘Colleague’ it achieved 21% of women in senior leadership. The target set for 2018 is 26%. With regard to ‘Customer & Client’, it is currently ranked fourth in one of its measures of success (‘Retail and Business Banking, Barclaycard and Wealth and Investment Management: Weighted average ranking of Relationship Net Promoter Score®1 vs. peer sets’) and has the target of reaching top spot by 2018. The bank emphasises that it is committed to monitoring and reporting its progress on all of these metrics annually.

When it comes to performance management Barclays has instigated a new process whereby all employees’ performance is measured against not only what they do, but also how they do it. Employees’ objectives align with the Balanced Scorecard areas of focus (Customer & Client, Colleague, Citizenship, Conduct and Company) and they are judged against these measures. As such, remuneration will align with Barclays’ Purpose, Values and Behaviours as well as the Balanced Scorecard.

This approach to performance was implemented for senior management in 2013 and will be implemented for all employees this year. Barclays believes that this will also help employees understand how their day-to-day activities contribute to the overall performance of the business or function in which they work and, ultimately, the overall performance of Barclays – as represented by the Balanced Scorecard.

The last couple of years have been a time of enormous change for Barclays. And real, fundamental change takes time. While the financial services sector will continue to be a challenging environment, the next couple of years are critical to the bank in proving that progress is being made. As Antony Jenkins, Barclays Chief Executive, commented in its Citizenship Report: “Barclays is changing. We know that from lots of different data sources. We still don’t get it right every day. But we are absolutely committed to getting it right.”

1 Net Promoter, Net Promoter Score, and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld