Guest Contributor: Dr. Colin Gruar, Bankers need morals to rebuild their brands

Dr. Gruar is a former Marketing Director of the British Heart Foundation and has been awarded a Doctor of Business Administration (DBA) from Cranfield School of Management. 

He now leads Repubrand and advises major corporations on strategy and branding.



Bankers have destroyed their global brands. Never has there been so much resentment against banks, and yet we need them as the wealth-generating engine of our economy.

Alan Greenspan thinks another collapse will happen again ... and we agree. He thinks it’s only human nature, and you can’t control that. We disagree. We think it’s behavioral, and we know we can change brand behaviors. Despite £1.3 trillion having been pumped into the ailing banking system (not to mention the ‘secret’ loan of £60 billion) in the UK alone, there remains real concern that we haven’t learned our lessons, or made changes to prevent it happening again.

Some say the Anglo – Saxon banking model is dead in the water. Many of our European partners want to see fundamental change

Lord Turner, Chairman of the UK's Financial Services Authority, conducted his thorough 'drains up’ review. With a ‘vested interest’ in shoring up the existing regulatory system, the FSA wants ‘tougher’ legislation with ‘more teeth’. But when you consider that the FSA failed to use the ‘simpler’ legislation effectively, why should we believe they could do any better next time, with more complex rules to follow? No Lord Turner, regulation is necessary but not sufficient. We need to address the root cause of the crisis if our global banking brands are to be rejuvenated

We think Gordon Brown is on the right track when he says ‘Bankers need Morals’, except it is not just about Bankers. And we don’t believe you can build morality off the back of legislation alone. Legislation can underpin a moral code, but not create it. Instead, it requires Leaders who are clear about their brand values (what they stand for) and demonstrate to their people how to live them. Deep down, most business people yearn for more integrity in the workplace.

Leaders set standards, including MP’s. So when our organizations have their ‘backs to the wall’, what happens? We ‘look after number 1’. That’s what we see everyone else doing. It’s a ‘learned’ behavior that we act out, subconsciously. We don’t know we are doing it. This is the real challenge, changing subconscious behaviors. Recent commentary on Bankers bonuses shows the game of ‘look after number 1’ is back in play, with JP Morgan recently paying its biggest bonuses ever! Looks like Greenspan will be proven right, unless we do something major, soon.

Bizarrely, the FSA recognize this issue but have done little to address it, In March 2009, Hector Sants, Turner's boss, was reported as saying:

‘Managers of the future must acknowledge and fight against the herd mentality ... the recognition that financial markets are not rational, but rather that they are a behavioral system built around personal aspirations, is critical to us effectively changing this time around’.

So how do we stop this game? Sir David Walker, former Chairman of Morgan Stanley International,  was asked by the British Government to make recommendations on Bankers pay and these may help, but again, we think ‘necessary but not sufficient’. More than controlling pay, we need to create strong, value driven cultures that are clear about what is acceptable behavior. For Banks, this must include a social responsibility. How would they account for their social impact to day? To change, we have to help managers practice appropriate behaviors and decision-making, just like pilots regularly practice how to fly (and crash) safely. Building the behavioral competency of an organization is the only way to ensure its members act appropriately through uncertain times.

And we agree with Mervyn King, Governor of the Bank of England. It is essential for Banks to be subject to market economics, including failure. That’s a big, big problem at the moment that has not been addressed. Bad behavior isn’t being met with a punishment that fits the ‘crime’. Nobody has been properly brought to book. ‘Crime’ is therefore being rewarded. And as any law enforcer knows, that’s a recipe for anarchy. Only by rewiring the value system, will behaviors really change and that will take time, so the sooner we start, the better.

As news is received of record bonuses being paid this month at JP Morgan, and other banks clearly feeling the need to continue to ‘reward’ their staff, it will be interesting to see how this moral dilemma is played out, publicly and politically across Europe. Both the British and French governments have already expressed their consternation at the behavior of some Bankers, when will they wake up and smell the coffee?

Suggestions for Comments: How do you think values-based leadership can be instilled once more in Banks?

To learn more about value driven cultures and how you can build the behavioral competency of your organization, contact colin@repubrand.co.uk.

Dr Colin Gruar is a strategist, consultant and coach at Repubrand Limited. Repubrand specializes in helping brands build strong reputations. It does this by working with clients in 3 ways: 1) to increase their strategic momentum (because most change takes too long and lacks focus); 2) to learn new skills to improve the effectiveness of strategy implementation (because good strategy requires doing new things); and 3) to help top teams achieve greatness (because being the best at what you do is what its all about). You can read more at www.repubrand.co.uk.