Innovation. Market share. Corporate culture. When executives in the financial industry are deciding whether to partner with your company, the majority focus on one thing: your culture.
In fact, 60 percent of decision makers say that knowing what a company stands for matters more when choosing a corporate partner than whether it’s innovative (21 percent) or has dominant market share (20 percent).
These findings come from a new study the FORTUNE Knowledge Group conducted in collaboration with gyro, the global ideas shop. More than 520 senior executives across a variety of industries, including financial services, were surveyed to explore how a company’s sense of purpose and mission effect business relationships.
The bottom line: A company’s culture is now the biggest driver of long-term relationships. That’s why a company’s values and sense of purpose need to be dialed up.
Your Value? It’s All in Your Values
Nothing signals a company’s values more explicitly than a clearly defined mission statement. Nearly all of the executives surveyed (98%) say mission statements are beneficial to them, even when the mission sets goals that are hard to achieve. Their hope is that companies become even more purpose-driven in the future.
“Companies make choices every minute about whom they deal with, and the best ones to work with are those you are aligned with in terms of values,” says John Stackhouse, senior vice president in the Office of the CEO at Royal Bank of Canada (RBC). “It’s a good way of filtering potential corporate partners.”
TD Ameritrade Institutional (TDAI), a securities custodian, was able to bring in more financial advisers as customers because “we have accessibility and humanness the other firms don’t have. We realized it’s a differentiator that we could take advantage of,” says Kate Healy, managing director of institutional marketing at TDAI.
The lesson here: Your company’s values matter to people, now more than ever. Make them known.
Live By Your Mission
Missions are important, but a mission statement is of little use if it’s not connected to the way a company actually conducts itself. That means when a company changes or evolves, so should its mission statement.
By mid-2015, RBC had grown significantly and the financial markets had dramatically changed. Its mission statement, which hadn’t been updated in more than a decade, was no longer an accurate reflection of its internal and external environments. Says Stackhouse: “The way we approach the mission is sharper because the world is changing so much. Our mission [statement] is being slightly reworded, but the core values are the same. In the process, it’s becoming crystallized and strategic.”
The change in vision can’t just be kept at the top of the organization, however. Maintaining a sense of purpose needs to be a company-wide effort. After all, losing your culture may mean losing your customers.
Great Culture Equals Great Service
Executives in the financial services industry can easily sense inauthenticity, but the good news is that they’re also able to quickly recognize when a company turns its words into action. Eighty-two percent of these executives said they believe companies that are successful at building long-term relationships make a direct connection between what they believe in and the way they conduct their business. An even greater number (86 percent) say great companies build cultures that create excellent customer experiences.
TDAI knows this. “One of our principles is to put the client first,” says Healy. “Nobody is conflicted by such a rule, and it gives our front line the power to make decisions that are good for the client.”
More companies are beginning to realize the potential payoff that culture can bring: 90 percent of respondents say they are sharing their company’s purpose and values with key stakeholders more than they did five years ago.
Taking the Long View
Culture has the power to cement long-term connections. In the early 2000s, TDAI was regarded as the custodian of small financial advisers, but during the financial crisis of 2008-2009, it started to attract larger investment advisers when competitors were pulling back. TDAI stayed with advisers when the markets were difficult, and its clients have returned the favor. “Our customers have stuck with us when we have had hiccups,” says Healy.
This anecdote mirrors the view of other executives in the financial services industry: 84 percent agree with the statement that it’s worth making short-term financial sacrifices to cultivate long-term relationships.
In fact, even when corporate ties do fray, only 16 percent of respondents say culture, or cultural differences, are contributors to the problem.
If the Culture Fits
Financial services decision-makers require a good reputation from their partners. According to these survey respondents, it’s a company’s good-quality products and services (56 percent) and admired business practices (42 percent) that attract them most, more so than company size, for instance (32 percent).
When recommending a potential long-term business partner to a colleague, these executives say they look to a company’s culture (36 percent) – ranking second only to a company’s high-quality products and services – when determining whether it could be a good fit with another organization.
Executives in the financial services industry seek partners who live by the same values they do and whom they can trust. Show how your company’s mission relates to them and gain a greater chance for these decision-makers to bet the bank on you.
Five key questions for leaders of financial service organizations:
1. Do you have a mission and a set of values that express the purpose of the company?
2. Is your mission ambitious and inspiring?
3. Does your culture embrace the mission and translate it into differentiating employee actions that are experienced by your customers and other stakeholders?
4. Has your mission stayed up to date in the face of industry and cultural change?
5. Is your company doing enough to share your mission so that it is widely understood both inside and outside the company?
Patrick O’Hara, Chief Strategic Officer, gyro