Under the title, ‘Ramos fights on all fronts’ (Business Times 15/7/12), ABSA Chief Executive, Maria Ramos, tells parent bank Barclays of the concerns she has about their banking culture. She has every right to be concerned.

When Barclays bought a 55% controlling stake in ABSA it was always going to be an interesting cultural fit to say the least. I remember being involved in an executive leadership programme for Barclays Africa at the time and seeing firsthand some of the complicated cultural implications of the buy-out. In fact, some of the leadership sessions were at the Sandton Hilton, the very venue where some of the high-level merger negotiations were taking place – in the room next door to our programme. What stood out for me was the dichotomy between the respective executives in their dress code. A rather superficial measure I know but a startlingly obvious one nonetheless. The Barclays executives spilled out the room day after day in their pin-striped suits and colourful ties. They stayed that way the entire week, refusing to adapt to their environment, which was ‘smart casual’ at best, as demonstrated by their ABSA counterparts. ‘An early indication of the looming culture clash to come?’ was my immediate thought as I observed this obvious segregation of appearance. In spite of the obvious ‘happy relationship’ mantra that was spouted at every turn over the months and years that followed, one disgruntled employee in the know described the situation to me as the, “Boer war revisited!”

And now this! Barclays have shamed themselves and their industry by recent revelations of manipulating inter-bank lending rates and of course there will be others that are sure to join them on the list as a further 16 banks are under investigation. The extent of this ‘reputable’  (I mean after all this is the ‘best of what is British’) bank’s dishonesty is amazing. Had this happened in Africa there would have been all the condescending judgments from those in London and elsewhere about, well, what else can you expect from Africa?

 But we are talking London here, not Africa. The truth is that ABSA’s reputation has been irrevocably damaged by their Parent in the same way that any child cringes at pictures of drunken parents that might surface on the Internet, accompanied by an alarmed parental response of, “what does it mean I’ve been tagged?”

Ramos has every right to be angry. She points out that there are plenty of hard working, honest people in banking who are passionate about what they do. And she would be right on that score as well – I have met many of them and worked with some of them. So how then does what Barclays did, happen?

 Ramos lists it as a leadership failure; it is something that happens when leaders become marooned from the organization’s values. Again, Ramos is right. This is why Koerstenbaum argues that the primary responsibility of leadership is not strategic formulation or execution but rather, organizational culture. He is right! Yet, in my dealings with executives or in leadership development programmes worldwide, this reality is seldom reflected. Conversations and intentional activities aimed in the direction of ‘culture’ are usually met with tolerance at best and cynicism at worse. How often do you still hear ‘people issues’ referred to as the ‘soft stuff’ when the underlying implication is always that it is the ‘hard stuff’ that really matters?

The recent problems around ABSA that include senior staff leaving, a drop in share price and significant retrenchments have been blamed on Barclays pressure and micro-management, but this is refuted by Ramos. However, one doesn’t have to have been within the inner-circles to know the cost that mismanaged cultural integration has caused.

Leaders seldom know how to do this work but the trouble is that it is often work that only they can do. Organizational culture is a leadership responsibility. Unfortunately, it is often deemed as work that ‘everybody else’ needs to do but they (the senior leaders) excuse themselves from doing. By granting themselves this ‘pass go and collect $200’ card, leaders fail to recognize both the importance of not only doing this work, but also of being seen as doing it! Actions count more than words and it would seem that when it comes to corporate values, we are heavy on words but light on actions.

Culture matters. In fact one little word needs to be added here and that one word is…’most’: culture matters most. The often-stated cliché, ‘culture eats strategy for breakfast every time’ is right on the money. It is something both parent and child in Barclays and ABSA are finding out at their cost. The exact nature of the pain being experienced by the parent and child might differ, but the lessons to be learnt will need to be the same.

“We’re about integrity, honesty and fairness” claims Ramos; pity then no-one bothered to help Bob Diamond (former CEO of Barclays) understand this. Pity that no one bothered to share with Barclays’s leadership that values need to be both practiced and lived. Right now I’m sure that ABSA must be wishing they could find a place of their own and move out of their parent’s tainted home! Of course they are not going to say that but one could hardly blame them for wanting to do so!

A Diamond is a girl’s best friend? Maybe not in this case!

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