Tuesday, July 03, 2012
Master of the Universe crashes to earth
Being in a completely different division to Bob Diamond, I had little exposure to him. I attended a couple of staff conferences that he spoke at; he came to one group communicators meeting that I was part of and he was a 'client' during a couple of our Y2K (remember that?) presentations.
He was smooth, incredibly assured - and the people I knew who'd inherited him as a boss were scared of him. He brought in a raft of new people, new methods and new ways of working. The slightly clubbable BZW disappeared; replaced by a harder edge. He made money for the bank: lots of it. And the investors loved him.
I next crossed Barclays' path in about 2005, when asked to work on a project in Barclaycard. I'd known the cards business quite well during my spell in the operations side of the bank. Barclaycard was the industry leader in the UK - first into many markets and with an enviable customer base. But it faced the problem that many pioneers have to live with: younger, nimbler competitors were coming into the market and chipping away at Barclaycard's dominance. Good customers were defecting and that presented a huge issue for Barclaycard. They were the cash cow for the Group and suddenly that cash wasn't quite so forthcoming. Barclaycard had prided itself on never having to take on risky business, but now they were having to trawl the murkier card waters, offering cards to customers who never before would have fitted the profile, and having to work harder to claw back bad debt and make money from interest on outstanding borrowings.
It was a time when the business had reissued its Values - the usual stuff: we put our customers at the heart of everything we do; we value our staff highly......it felt 'motherhood and apple pie'. I was brought in on the back of the staff survey as morale had dipped. The view of the HR team was that they needed some communication to get staff back on board and feeling more positive.
For me, the next few weeks were a culture shock. Barclaycard had changed a lot between 1998 and 2005. The management team was very different with a strong BarCap presence and even stronger BarCap mentality. What was most noticeable was the divide between the long-serving, generally more junior staff and those managers parachuted in from elsewhere in the business or recruited to fit the new mould.
Generalising, for those who'd grown up in the Northampton HQ, the values mattered; customers mattered; relationships across the business mattered. For the new breed, profit mattered. End of.
Having spent several weeks interviewing around three dozen people (on both sides of an increasingly obvious divide), for my diagnostic, I fed back my findings to HR as preparation for presenting a plan to the Barclaycard Board. My simple conclusion was that no amount of tactical communication would change anything at this stage. Quite simply, the management culture bore no relation to the espoused Values. All the nice words about customers and colleagues were just posters on the wall.
The real work needed to be about deep cultural change - to move management into a more truly customer and employee-focused mode of operation or, more likely, to move staff towards the emerging management model.
My 'killer' line was on values and had been given to me by a senior Barclaycard exec in the interviews. He'd said: "Those values on the wall mean nothing. If I was really to sum us up I'd say: 'We're short-termist; a bunch of hard-nosed bastards who are ruthless on costs and entirely focused on delivering our profit targets. No-one stands in our way."
I told my clients that there was no benefit whatsoever in running a series of events with supporting whistles and bells advocating a set of values that the senior management team clearly weren't living and had no intention of buying into. They'd be better off being honest and putting the 'short-termist bastards' message on the walls.
I never got to present to the Barclaycard Board (and was never invited to become a diplomat) but did get to send my report to the CEO - Gary Hoffman (who's currently being touted as a potential replacement for Bob Diamond.). I have no idea if he ever read it, since the comms project was quietly cancelled soon afterwards.
I've subsequently done work for the European retail banking business and enjoyed the experience much more. But what struck me most thinking back to my 2005 involvement was how BarCap's tentacles were stretching out, creating a culture where the ruthless pursuit of profit - no matter who was struck down along the way - had become endemic in large chunks of the bank.
Yesterday, Bob Diamond delivered a long and seemingly passionate promise of intent to staff a triumph of corporate communication at odds with corporate actuality. But he was too late.
The culture he has created in the bank has come back to bite him. There's a point where greed is no longer good - even to investors. Bob Diamond has gone because of one thing: shareholder value. Rather than boosting the share price, his association with Barclays caused it to plunge. However good an operator you are, as soon as that happens, you're out. End of.