Tag Archives: Risk Culture

Culture and the HR function

James Paterson speaks to Jenni Hardy about culture and the HR function – April 2016.

James: We’re going to talk about culture, and behaviour, and how you would know that you have a good culture. Can you please take us through some of the thoughts you have about how to approach this based on your own experiences in HR?

Jenni: In my experience culture is significantly influenced by the strategy of an organisation and its leadership; these are the key transformational influencers. The culture is also affected by the external environment, so what industry sector the organisation is in, what markets and its competitive environment etc.

Then how you measure it, and how you see it, how things work around here, is best evidenced by the observable behaviours, what goes on around here. This can also be complemented by an annual employee survey.

As mentioned before, the culture will be influenced by the CEO and the direction that he or she sets, in terms of objectives and values. When done well, expected values will articulate the sorts of behaviours they want to see; but this will – of course – be influenced by day-to-day management behaviour and the behaviour of the staff around you, creating sub-cultures. Sub-cultures will comprise of factors such as “Am I fairly rewarded”, “Am I recognised”, and “Do I feel my views are heard”? Continue Reading

Reflections on culture

A conversation between James Paterson and Ralph Lewis – March 2016

James: Thanks for agreeing to be interviewed Ralph. Can we start by talking about the idea of a healthy culture and less healthy culture and how we might measure this?

Ralph: Let me start of by saying that there’s an awful lot of stuff said about culture that needs to be understood in a broader context. So what we mean by culture, and a good culture, will often be put it in the context of the society you are in, as different societies have different cultural preferences.

In addition, there is often a link between the personality of senior leaders and the attributes they look for in a company culture. However, 1) I am not sure they understand in depth what culture means, and 2) I am not sure they understand what sort of organisational culture is actually going to be helpful to performance in a sense broader than pure financial results. Put another way, the people in power in an organisation often want to promote a culture that suits them for personal reasons, and I don’t mean in any corrupt way, but often they seek something that they are comfortable with. Continue Reading

Some perspectives on Culture

A conversation between James Paterson and Liz Crede – March 2016

Liz, can you talk about the idea of a right culture?

In my opinion there is only a right culture if it has the right fit for your organisation, business and its strategy. What would be a good culture for one organisation may not be so for another, due to the fact that their context may be different.

An effective culture is one that ensures your organisation is achieving the results you want to achieve, both externally and internally – and in all areas. It’s not just about profit and return on investment. It is about achieving the right results in terms of human performance, people being engaged with their work, doing the work they want to do as well as delivering on innovation as well as robust risk management and accounting practises.

Can you expand in more detail on the idea of different contexts demanding a different organisational culture?

Let me share my experience from two different industries I have worked in. In the pharmaceuticals sector, part of their culture is for it to be process orientated and to think in longer-term time horizons because it takes a long time to find and develop new drugs. So the whole process of creativity and experimentation and longer time frames is necessitated by the business and should be part of the culture.

However, if you go and work in a retail environment you’ve got to make decisions about what to do tomorrow which might be different from what you did yesterday; the context demands very fast paced, very quick reactions, so that business imperative feeds through back into the whole organisation. You couldn’t have a pharmaceutical type culture in a retail organisation or a retail culture in a pharmaceuticals company. It just would not work because of the need for immediacy and response, with a fast paced turnaround of trying things, and getting results and building on that in a very quick time scale versus the need for a more deliberate approach.

Consequently a good culture in a retail context is one that would enable decision making at the customer facing end, where face to face with customers you need autonomy of decision making, and a culture that supports, that empowers people, to enable them to do that, which is very different from a culture in pharmaceuticals that needs to double check decisions before putting a new drug out into the market. This context has a very different risk profile and requires a different organisational culture. Continue Reading

Culture & Internal Auditing – part 1

I’ve had a run of requests to do speaking on Culture and Internal auditing, first for my friends at UNIAC, for about 30 Audit Committee members, then my friends at the IIA NorthWest and then CIPFA in London.

It’s a bit of a challenge trying to summarize the key headlines from the one day training workshops that I run into just an hour, but here are some key points:

My first key message is that looking at culture is an inevitable part of the development of Internal Audit as a profession, 15 years ago we started to take a greater interest in Risk management; then 5 years ago it was governance related issues, and now it is culture. To me this is just a natural part of Internal audit finding its place at the top table, since often the underlying reasons for issues that audit finds are cultural in origin (see also my blogs on Root Cause analysis).

In the UK financial services sector the need for audit to look at culture was identified in an interesting report “Effective Internal audit in the Financial services sector” issued in July 2013.

The report is short and easy to read and makes points that are pertinent to internal audit functions in the public sector and other private sector areas. I urge readers to look at the report if they are not familiar with it and to use it as a useful guide for the development of their internal audit strategy. Continue Reading

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