Why ‘sense of Purpose’ Should Be a Defining Factor of All Banks

By Nick Miller, Partner and Head of Wholesale Banking at Odgers Berndtson, 

Explains why banks should build upon the new sense of purpose that has emerged as a result of the Covid-19 crisis

In the financial crisis of 2008, banks were considered part of the problem. Now, with most countries firmly in the grip of the coronavirus crisis, banks are being seen as part of the solution. Many banking leaders have spoken to us of an emerging ‘sense of purpose’ across their organisations that is at a level most companies could only dream of. At a time where value to society has been thrown into sharp relief, moulding and driving this sense of purpose for the ‘new world’ should be a key priority.

Fortunately for banks, they’re already one step ahead of most organisations. Providing capital and liquidity services, increasing the terms on mortgages and loans, and improving commercial terms are just a handful of the measures banks are taking to help stressed clients navigate the crisis. It’s led to a ‘rebalancing’ of the needs of customers, communities and staff so that banking services are oriented around multiple stakeholders rather than just a single shareholder group.

What’s more, as a result of the pandemic there’s an obvious value in the work delivered by banking professionals, which pre-virus still existed, but was perhaps more ambiguous; veiled behind targets, KPIs and profit margins. Now however – particularly for many junior banking professionals who are going through their first crisis – the pandemic has focused minds on what’s important and resulted in newfound pride for the brand they work for and the support they are providing to the broader economy.

The benefits this sense of pride brings and the notion of purpose in the workplace are well documented. In 2016, LinkedIn conducted one of the most extensive global studies on the role of workplace purpose. It found that purpose-oriented employees have higher levels of engagement, are more fulfilled in their roles and outperform their non purpose-oriented peers in every element of work, including expected tenure, brand advocacy and leadership competencies. Purpose also has a proven influence externally. Research by Accenture conducted in 2018, shows that nearly two-thirds of consumers will choose to buy services or products from brands based on the actions and values of a company and its employees.

Already important to an organisation before the pandemic, it has become all the more critical as a result of coronavirus. Organisations have become disparate, with employees spread across countries and working from bedrooms, living rooms and kitchens. The office, something that physically united hundreds of people is a concept that no longer exists in its previous form. Even as lockdowns ease, it’s widely agreed that ‘the office’ will not return to the five-days-a-week place of work that it once was, and approaches to work will need to be agile to meet different country guidelines and any potential reinforced lockdowns in the event of second or third waves.

Purpose however, acts as a uniting force for these conflicting elements – and already has in the world of banking, where there’s a collective sense of ‘doing whatever we can to help the customer’, regardless of where that help is being delivered from. Sustaining this into the future will be even more important. Employees will be faced with a disrupted workplace that is blended between on-site and remote working. Purpose will therefore play a decisive role in both engagement and productivity.

It will also play a role in future talent acquisition, retention and securing business opportunities. The existential question of ‘why we do what we do’ is front of mind for almost everyone. It means that for the foreseeable future, talented people at every level will choose to work for companies whose purpose resonates with their own beliefs and values. Likewise, clients will choose organisations based on this differentiating factor. Things like price and quality of product are now table stakes, whereas being purpose-led is a USP that engages with part of the human condition, offering the opportunity to build stronger, more meaningful relationships with clients.

To tap into, shape and drive something as intangible as an organisation-wide sentiment takes a certain kind of leadership. Those leaders that will find this easy will share similar traits. They’ll have high levels of empathy, compassion and emotional intelligence. They’ll think beyond their own organisation and the markets within which they operate to consider both broader ethical and economic themes that will impact the firm, and that the firm itself can influence – things like environmental sustainability, global social responsibility and inclusion and diversity. This is known as an ‘outside-in’ perspective – something that is often seen in conjunction with innovation and bravery. These are two attributes that future banking leaders will need if they are to commit to ethical and moral initiatives that have no immediately measurable financial benefit but will embed the kind of ‘sense of purpose’ that will define the organisation in the eyes of their employees and clients for decades.

This shift needs to happen now. The world is rapidly emerging into the new normal yet the pace of change is not slowing down. Those banks that successfully capture a sense of purpose; who don’t let it fade and instead build upon it will find themselves with a lasting corporate identity that leads to a loyal and growing stakeholder community and ensures resilience in the face of disruption.