What motivated Old Mutual to start working with values?
In 2010, post the Financial crisis, we articulated a new vision which was a customer-centric vision, putting the customer back into the centre of our reason for being as a financial services organisation. That caused us to revisit our values that had been around for probably five years or so by then.
What drove you to the initial decision to revisit your values?
At the time, our values were, and still are, accountability, integrity, respect and pushing beyond boundaries. We articulated our customer-centric vision as: to become our customers’ most trusted partner, passionate about helping them achieve their lifelong financial goals. This raised the question within our organisation whether we should have a value that says something about the customer.
We did an extensive exercise to talk to the leaders throughout the group, and engaging employees at different levels, to ask how they felt about our values, how they experienced the organisation, and what they felt needed to shift in the light of that new vision.
It turned out our values were still very important our people. There was quite a strong feeling that our values did not need to change, but that they needed to become clearer on what they look like in behavioural terms.
They are quite generic words and a lot of companies use them. But what do we mean by accountability, by integrity etc in light of the vision we had set; what do people need to be doing. So instead of changing our values, we focused on our actions and behaviours.
What are the practical implications of working with values?
We came up with six “leadership actions” that describe our values in practice. These are much more clearly articulated in behavioural terms. And we used the language of our own people who had said this is what we need to see more of, if we are to achieve our vision as an organisation working from our values.
Do employees need to be part of the process?
It is very important for employees to engage in the process. But I also feel that there is a top down direction to be given by leaders. It really needs to come in from both directions. I don’t think that an entirely bottom up process is an appropriate way to define values. Nor can it be a top down process. We started top down – what did our leaders feel passionately about that they could stand for? Then we tested them out with a wider group of employees and fed that back to the senior leadership.
It was an iterative process, so that by the end, it had involved the whole of the organisation.
Have you noticed any impact since clarifying your values? Are values worth bringing in and why?
We have certainly seen engagement in our leadership group, and in our wider employees, increase. We measure culture and engagement on an annual basis, in all our operations. We have seen engagement levels increase. And we know from research that this results in improved business performance.
We have certainly seen our culture improve, particularly in the leadership group. And that has been flowing down the organisation too. And our financial performance first stabilised, and we have now entered a new growth and expansion phase. It is difficult to make a really clear causal link, but a part of the process of restoring confidence in our organisation, has been a very clear focus on not just our performance and what we deliver, but our culture and values from which we deliver our results. And that means we consider those results to be sustainable over a longer term.
Has your shift in culture impacted the level of trust in you?
That has been a big thing for us. And part of the shift we have made is how we think about our vision and purpose. We had a vision statement going back pre-2008 [the start of the financial crisis] which spoke to our ambition to be in the top 10 companies in the sector by assets under management. We shifted that focus to become our customers most trusted partner, passionate about helping them to achieve their lifetime goals.
So for example, in our product areas, we have turned the process around from designing very clever actuarial products that can be profitable, to really understanding the needs of our customers, understanding their lifestyles, their financial needs, and then developing products that really service those needs. So a much more customer-centric approach. We do a lot in our organisation to bring customers in to our meetings, either in person or through focus groups, or through cardboard cut-outs of customer personas, so we are always clear that we are here to serve the needs of our customer in the first instance.
Do you have evidence of whether that is yet impacting your customers?
We have lots of great stories, where customers have put confidence in us. And that goes from wealthy individuals who are looking to protect their money in the long run, to smaller entrepreneurs in emerging markets who trust the future of their business with us. These are important stories that reinforce, to all of us working in the front line right the way back to the support functions, that this is why we exist – to help our customers with their long term financial needs.
Have values been a component in developing your consistent understanding of objectives throughout Old Mutual?
Values have been critical in this work. One of the behaviours we have defined, is customer first. We use this throughout all parts of the organisation. We measure leadership behaviours as part of performance management in line with our values. We include them in our leadership development programs. We are continually reminding our people throughout our organisation of what really matters to us.
Can you illustrate where working with values has been a worthwhile exercise?
There are so many diverse areas of improvement within our businesses, it is difficult to encapsulate them in a couple of sentences. But let me give you and example of how fundamental the effect can be. We are a service industry, the whole of our business revolves around the talent of our people. Since we introduced the focus on values and culture, we have been attracting some of the best people in the industry. They tell us they can relate to what we do at a personal level and they want to be part of it. Doing something meaningful is more important to them than simply earning a great salary. The impact of a very highly motivated workforce, working in a consistent direction, with high levels of engagement and low levels of ‘cultural entropy’ have started showing up in our bottom line. And we don’t see that changing any time soon.
In summary, why do you think organisations should engage in values?
There are lots of reasons. One is a quote that stands out in my mind. The strategy of your organisation is executed by the thousands of actions and decisions taken by all the people in your organisation on a day to day basis.
So really knowing what is important, what matters to us – and that is our values – making sure that everyone in the organisation is clear on those things. It helps to make sure that the day to day decisions and actions by the people in your organisation are the right ones. So getting rid of the grit in the gears. We measure the values in our organisation each year. And one of the metrics it highlights is Cultural Entropy. This is the amount of unproductive effort that is wasted, the amount of friction in the organisation caused by all sorts of things. Cultural Entropy is absolutely related to employee engagement.
We have seen this in our own organisation, how as cultural entropy has declined, the level of employee engagement has increased. There are so many studies showing the relationship between employee engagement and business performance.
Some people see values as the “soft stuff”. That certainly is not the case. One of our values is accountability. And this is a hard value. It is being able to have a common language to talk about what accountability looks like in our organisation, and identifying where things are getting in the way of taking real accountability. That makes a real difference to our business performance and the way we work together.