The right management will embed a TCF Culture; the wrong management will increase your risk on non-compliance
Managers have a direct impact on performance, culture development and values buy-in. Gallup estimates that having the right manager accounts for more than 70% of the performance differences and engagement scores across the business.
The employee-supervisor relationship is believed to be a key cause of low employee engagement scores worldwide. Only just over 13% of employees worldwide are actively engaged (2013). More troubling is that these numbers have not changed significantly over the past 12 years, despite the number of engagement programmes and surveys run each year. This trend is likely to continue until we change the way we develop and select managers, and reward high performers. The practice of rewarding outcomes (instead of the right behaviours) and a lack of real acknowledgment entrenches poor behaviours, and a disengaged culture. Behaviours, performance and disengagement are embedded through the way we reward and manage our people.
Just because an employee is an excellent salesperson, accountant or actuary doesn’t mean they have the skills to manage a TCF Culture.
Too many organisations use outdated succession planning processes to find their next manager. They often use length of service, proficiency in a functional skill set (IT, sales, etc) and politics as determiners of leadership skills, versus the ability to lead and inspire culture supporting behaviours through real people skills. With TCF, having the right manager to drive the right behaviours is critical. A TCF Culture is based on what we do every day, and we tend to copy the behaviours and attitudes of our leaders. When leaders don’t walk their TCF talk, employees are more likely to become cynical, take shortcuts and use the ends to justify the means. This will translate into financial penalties for non-compliance. It is becoming clear that a tick box approach to Treating Customers Fairly TCF, Retail Distribution Review RDR and the application of the Twin Peaks legislation will not be effective in the long term. A proactive approach will be necessary to ensure customers are confident that TCF is part of your culture (Outcome 1).
Research into effective managers by Gallup suggests that organisations select the wrong candidate to manage a team 80% of the time.
Gallup believes that when an individual has the right talent to succeed in their role, they think and act in a different way to their peers, and are more likely to excel. Those managers who are utilising their skills and talents in a state of flow, feel energised by what they do, and rarely consider what they do “work” in the traditional sense. They also tend to inspire greater performance, and support a more customer friendly (fair) culture. However, those performing roles outside their skills and talent often feel drained by what they have to do each day, and require substantially more motivation to succeed.
The cascade effect
Having the right management to engage teams and drive compliant behaviour is becoming more essential with the implementation of the Twin Peaks legislation. As the legislation comes into effect, poor management of people will begin to cost the organisation more than just talented employees. It will begin to directly impact the bottom line through fines for non-compliance and negative publicity that will lead to brand damage and a loss of customers.
Beyond their inability to inspire and lead, managers promoted beyond their people skill level tend to become easily disengaged. Gallup estimates that these disengaged managers promoted beyond their people skill set cost the U.S. economy between $300 billion and $400 billion annually. The same research shows that people-managers, i.e. those chosen based on their ability to manage people, have a much greater chance of embedding a client-centric culture and producing high performers. Knowing how to develop and engage employees is a skill essential for the creation of a TCF culture that is compliant. Creating enthusiastic and energised teams that focus on giving a great experience to customers, and being fair, takes regular conversations and support.
When organisations fail to hire or promote management based on talent, they can end up with significant variances in performance. Even though the organisation may offer a manager the same support, knowledge as well as create a great environment, culture is dependant on effective management of people. Some managers lack the capacity to lead people effectively, and some just lack the support and tools to develop this essential leadership skill.
According to Gallup almost 50% of managers are themselves checked out and disengaged. The managers’ attitude has a direct negative impact on the engagement and culture of their teams. Gallup’s research clearly shows that the engagement level of the manager directly impacts the engagement levels of their team. Gallup calls this the cascade effect. In more than 190 diverse industries (finance, healthcare, retail,manufacturing, etc.) they found that employees supervised by highly engaged leaders are 40% more likely to be engaged themselves. Employees managed by highly engaged managers were 60% more likely to be engaged compared to those managed by actively disengaged managers.
Selecting the right management is not about about picking the best role expert, but about finding those able to understand and apply the TCF principles, and the people management talent to embed this into your culture.
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