The Renaissance of the Mighty Mutuals

There was a time, not so very long ago, when the mutual societies were seen as deeply unfashionable and treated with the same disdain as a flat cap at Royal Ascot.

Well, the day of the mutual has dawned once again.

In 19^th century England, the Industrial Revolution erupted into massive social change and, as a by-product of the rive for prosperity it threatened to tear village communities apart as generations headed into towns and cities to service heavy industry.

Building societies emerged as financial mutual help organizations for workers who had been uprooted from village communities. They offered a way for workers to pool resources and fund and build their own housing in spite of the sometimes scandalous and always difficult economic conditions of the new cities.

Mutual societies, of which the Yorkshire Building Society and Nationwide and, of course, Co-Operative Finance are examples can trace their roots back a couple of hundred years and several generations. Unlike most financial services organisations, they are run for the benefit of members rather than shareholders and take their foundation values very seriously. To this day they are one of the few types of organisation where several generations of the same family are happy to till work hand in hand.

As I very much respect this link between values, communication and brand I wrote about the YBS in Brand Engagement and will be featuring a major case study on the Co-Operative Financial Services in the sequel Brand Champions, not least because, despite these dark days, they are not only surviving but are thriving.

While their competitors resort to lawyers and due process to defend their much depleted positions from the wolf packs at the gate, which sadly includes a growing mob of disgruntled employees who are increasingly joining with shareholders baying for the blood of the board; Nationwide has announced further expansion plans, as has CFS and most mutuals are experiencing a flood of deposits and new accounts.

Cynics may claim that this simply represents a triumph of inertia over innovation and, yes, it’s true the mutuals have taken care with depositor’s money, but they have also been significant innovators in their own right. 

Did you know that there are more Co-op outlets than McDonalds stores in the UK? Were you aware that CFS was one of the most significant investors in Employer Branding and Brand Engagement across sectors and that their state of the art brand engagement experience regularly attracts international visitors desperate to transfer best practices into their own organisations?

This all goes to show that we shouldn’t blindly lust for Disney’s magic dust when seeking the employee engagement nirvana. 

The time has come to re-consider the humble mutual, organisations in the truest sense who treasure their legacy and who position their values at the very forefront of their brand. After all, what is a brand if it isn’t about keeping the promises you make to the market? What wouldn’t shareholders, both internal and external, give for that kind of authenticity right now?

 These are complex corporate times but as the finger of blame for the global economic downturn is pointed at various external stakeholders like the regulators and even the customers themselves, it’s interesting to hear the term “corporate culture” finally surfacing in banking post mortems.

The term performance culture has been increasingly abused within performance management parlance.  It has become inextricably linked with the drive for delivering shareholder value in quarterly increments and the “up or out” mentality which has spilled over from investment banking.

But now that almost every investment banking super-tanker has holed itself on the reefs of greed, selfishness, arrogance and some fairly suspect practice it’s time to reclaim the phrase. This is why leaders like RBS’s Stephen Hester are now having to open internal moratoriums in an attempt to bridge the obvious and growing employee engagement gap that has opened up within some of our high profile financial services names.

Ironically, despite this being an employer’s market, employee engagement; employer brand and corporate culture have never been so important. But it’s time for a fundamental re-think about how internal stakeholders (employees) are managed. The infrastructure underpinning many employment brands is clearly in need of a dramatic overhaul. And this is no job for the marketing function or advertising types.

Clearly characteristics like sustainability, network building and relationship development are the bedfellows of integrity, accountability, security and trust (the values, ironically, most popularly used to market the wares of financial services companies). But how can these values flourish when FS employees have seen HR functions replaced by processes and help lines; when average employee tenure (and loyalty) has fallen so dramatically and when  effective performance management and feedback loops have been replaced by grievance processes and whistle blowing – the corporate equivalent of “ratting on your colleagues”

I’m certainly not calling for a complete return to the cosy old hierarchies; glass ceilings and command and control regimes. But it’s clear that there’s going to have to be a large dose of mature, “back to the future” relationship based thinking if the nirvana of an appropriate and authentic performance culture is ever going to be achieved by arguably our most influential businesses and brands. And if the last 18 months has taught us anything it’s that none of us can afford for our financial services brands to continue to fail their employees by making promises to customers and the market that they simply can’t keep.

Ian

This piece first appeared in print Q1 2008…………….

Critics claim we’re facing an imminent recession. The signs aren’t great when the marketing advice from commentators like the Harvard Business School professor, John Quelch* is that companies should focus on family values rather than appealing to conspicuous consumption. It’s pretty unpalatable stuff to stomach for a society dominated by consumerism. But, ironically, anyone who cares about internal communication should sit up and take note.

While researching Brand Engagement and the pending sequel, Brand Champions, my aim has been to expose the obsession with the material manifestations of brand and to identify and articulate the true behavioural DNA of a brand. I know that authentic brands are more than promises made to employees and staff. They’re about promises delivered. And I know from my own experience of running businesses that there’s nothing quite like tough economic conditions to sharpen focus.

Whatever the rhetoric of the internal marketing zealots may imply and despite what manages may sometimes believe, organisations have little choice other than to rely upon their people to give something of themselves if they’re to connect with the organisation, their peers and customers alike. This is tricky to achieve at the best of times but especially elusive when economic conditions turn sour.

Having worked across sectors in the internal communication and engagement fields for nearly twenty years, it’s frustrating to hear the persistent language of alignment. The conviction that some form of corporate internal media is the way forward is depressing. It reminds me of the culture which dominated institutionalised post war media and led to the phenomenon of pirate radio which emerged as a reaction to the establishment stranglehold of state owned communication. In the UK, Radio Caroline has become the literal flagship for iconoclastic broadcasting http://www.radiocaroline.co.uk/history1.asp.

It’s my firm conviction that corporate engagement can’t be conscripted. Internal media which is out of touch with the true culture of the organisation may dominate the internal airwaves but sadly few people truly listen in.
Unfortunately, one of the side effects of tough market conditions is that the language of corporate command and control increases as does the tendency to focus on “push” communication as managers struggle to cope.

Whether we’re faced with a market downturn or not, the internal communication community has a pivotal role to play in ensuring that employees engage with the brand. Irrespective of market conditions, I would argue that clarity about brand can never be a bad thing especially if it’s based upon authentic dialogue and trust.

If you agree, try the following five tips for bridging the engagement gap:

1. Always role model an open door policy, especially in turbulent times. If in doubt, increase consultation. It’s an unfortunate fact that managers tend to adopt a “laager mentality” when faced with problems. It’s the worst thing they can do. Ignorance breeds insecurity which in turn breeds misunderstanding - the sibling of poor performance.

2. Be honest with your people and really emphasise the personal qualities needed in tough times, the type of culture that is needed to thrive in adversity. I’ve consulted in a number of downsizing situations and this is a proven way of giving people some sense of control over their fate. Regardless of the outcomes of tough trading conditions, when people come out the other side of a downturn, whether they were directly impacted or not, they are always grateful for straight, empathic but honest talking

3. Take the temperature more frequently. Measure the impact of internal communication constantly via concentrated pulse takes rather than with cumbersome, seemingly expensive surveys

4. Seek out and promote positive role models and good news stories. Whatever the conditions, they will be there.

5. Don’t underestimate the power of core values. A downturn is just the time to reflect on the reassurance of a legacy which implies that “we’ve been here before, we’ve survived and even thrived”

Quelch points out that “when economic hard times loom….we tend to retreat to our village….as uncertainty prompts us to stay at home and also stay connected with family and friends”. Clearly internal communication has a vital role to play in keeping those communities informed, in recognizing their core motivators, consulting with them and in setting the tone. But lose touch with the core audience and don’t be surprised if employees seize the airwaves themselves. Pirate radio anyone?

*Financial Times February 18, 2008

Biog

For those of you who don’t know him, Ian Buckingham is the author of Brand Engagement – How Employees Make or Break Brands http://www.palgrave.com/products/title.aspx?PID=281268 and is currently working on the sequel Brand Champions.

We’ve reached a critical point of inflection in the war for talent and it’s now time for a paradigm shift if we’re to dominate the moral high ground”(OD Director, UK Financial Services)

I met this chap a couple of years ago – let’s call him Babel.  He proudly wore the label, Head of Organisation Development and worked for a web-based financial services firm which had a reputation for funky marketing.  He represented a truly maverick brand, much heralded for its iconoclastic , irreverent approach but which, unfortunately, also had an alternative financial performance record.  I would show you a copy of their “strategy on a single page” if I could, but suffice to say, looking at it for the first time was rather like being a Victorian explorer faced with a hieroglyphic carving.  The tablet was packed with symbols which might well have been runes and had so many mixed metaphors that it looked like it had been dipped in a vat of cliché .

 He talked proudly of their collaborations with a host of specialist management gurus – although the “tablet” did most of the speaking for him.  They had “absorbed” key thinking indiscriminately rather like a sponge absorbs liquid, and we’re attempting to align their employees behind their OD strategy.  Well they would have done if they managed to translate it for their leaders in the meantime, of course.

In fact, Babel-speak, as it came to be known, became so infamous that the employees had invented a game which they came to call BS Bingo.  An enterprising cultural guerilla had created a spreadsheet populated by the most infamous and prevalent metaphors.  On the internal communication black market, he offered a financial incentive for his contemporaries to seek out, site and mark off those metaphors appearing in officially sanctioned communication within a given period.  The first to spot and report back a “full house” of BS metaphors was awarded the BS Bingo prize.  You were at a distinct advantage if you were a middle manager and attended the Babel-sanctioned conferences and engagement events.

Two years on and Babel left to start up a consultancy, which has since sadly folded.  His former company has just been sold by its parents after years of underperformance and the OD team was severely right-sized a year ago. It didn’t have to be that way as they had some very good ideas.  Sadly, however, they were seduced by compulsive innovation, obfuscated the obvious and forgot to deliver the basics consistently well.   They lost their audience in purple prose.

As we all know, a metaphor’s a figure of speech that uses one thing to mean another and makes a comparison between the two. At their best metaphors add a powerful dimension to communication by conjuring up imagery which, in turn, evokes emotions that help with understanding, empathy and impact. So why are metaphors so abused in the internal communication market?

To find out - take a look at Ian’s chapter in Phillip Kitchen’s book  Marketing: Metaphor and Metamorphosis or drop one of us a line:  theteam@by2w.co.uk