Speaking Up in Financial Services: Navigating Cultural and Hierarchical Dynamics

The opinions expressed in this blog are those of the authors.  They do not necessarily reflect the views or positions of AFB or its members.

We all know that effective, open communication is a critical driver to success. The media provides many examples of organisations who (either consciously or unconsciously) fail to be transparent and have to deal with the consequences.

For Financial Services organisations operating in the UK, the Financial Conduct Authority (FCA) sets clear expectations from a regulatory perspective that senior leaders must nurture healthy cultures in the firms they lead. However, establishing Speak Up cultures is not as simple as having whistleblowing hotlines or leaders saying ‘my door is always open’.

In multi-cultural, hybrid environments, with complex stakeholder relationships and organisational dynamics, effective Speak Up cultures require a more mature and holistic approach. By leveraging insights from Erin Meyer on cultural differences, Amy Edmondson on psychological safety, and Megan Reitz and John Higgins on power dynamics, this blog explores how leaders can cultivate an environment that encourages open dialogue, especially in the context of hybrid working. This was inspired by a Roundtable for the Association of Foreign Banks on ‘Speaking Up in Financial Services’, led by Tamsin Howells and Sarah Jepson-Jones from Wharton Business Consulting.

Step One: Understand Communication Styles and Cultural Contexts

Erin Meyer, in her book “The Culture Map,” highlights how communication styles vary across cultures. In high-context cultures, such as those in many Asian countries, communication tends to be indirect, relying heavily on non-verbal cues, with both recipient and communicator having a role in making sure messages are understood correctly. In contrast, low-context cultures, like the UK, favour direct and explicit communication with the expectation of ‘clear communication’ resting with the communicator not the recipient.

For foreign banks operating in the UK, understanding these differences is important so they don’t lead to misunderstandings or a reluctance to speak up in multinational teams. A Japanese employee might hesitate to share an opinion openly in a meeting, fearing it might be perceived as confrontational. Conversely, a British manager might expect straightforward feedback, finding indirect communication unclear and getting frustrated that ‘no-one is ever raising anything to me’.

Generational differences are adding further complexity with varying expectations and comfort levels with different communication methods, leading to managers and their teams feeling neither of their needs are being met. Research found that 84% of Gen Z prefer in-person communication to text or email, but they recognise video calls as a face-to-face conversation (Stillman).

Step Two: Invest in creating Psychological Safety

Amy Edmondson’s research on psychological safety, underscores the importance of fostering an open and innovative workplace. When team members trust that their voice is valued and that they won’t be punished for making mistakes, they are more likely to contribute to discussions, share ideas and raise concerns. Creating an environment where employees feel psychologically safe to express their thoughts without fear of retribution is essential. We frequently find organisations forget that speaking up is about innovation and creativity as much as raising concerns.

In the context of financial services, where the pressure can be high, establishing psychological safety is particularly important. Leaders must actively work to create a culture of trust, where speaking up is encouraged and supported. ‘Open door’ policies are a good start, but this also needs leaders to role model vulnerability and openness, actively seek dissenting voices and focus on developing a ‘fail fast’ culture where challenges are seen as learning opportunities, not a chance to scapegoat and blame.

Step Three: Challenge Power and Hierarchy bias

Megan Reitz and John Higgins, in their book “Speak Up,” delve into the dynamics of power and hierarchy in organisations. Leaders play a crucial role in this and by removing hierarchical barriers and demonstrating that every voice matters, they can create a more inclusive environment. This might involve actively seeking input from all team members during meetings, providing anonymous feedback channels, or mentoring programs that bridge the gap between different levels of the organisation.

In many financial institutions, hierarchical structures can inhibit open communication. Junior employees might feel intimidated by senior leaders, leading to a reluctance to speak up. Leaders, in contrast, tend to operate in an ‘optimism bubble’, believing people are more open and willing to speak truthfully than their employees say they are. It is critical leaders hear what is ‘not being said’ as well as what is openly available in the business, and they know how to act on this insight in the right way.

Conclusion

Hybrid working adds further complexity to creating a Speaking Up culture with remote work making employees feel more isolated and less likely to have spontaneous interactions that lead to speaking up. The solution is not to force office working, instead leaders need to enable remote and in-office employees to have equal opportunities to contribute through regular virtual meetings, collaborative tools, and informal virtual spaces for team interaction. It is also important to be aware of time zones and cultural differences when scheduling meetings to ensure inclusivity. Can calls be recorded or opinions fed in via other routes to include truly global perspectives?

Fostering a culture of open communication requires consistent effort and new habits. Here are five ideas to consider:

1. Regular Feedback Sessions: Encourage continuous feedback rather than waiting for formal reviews and build in 5 minute feedback slots into every meeting
2. Active Listening: Develop leaders and team members in active listening techniques to ensure all voices are heard
3. Celebrating Contributions: Recognise and celebrate employees who speak up, reinforcing the value of their input
4. Inclusive Meetings: Structure meetings to include input from all participants, rotating the meeting ‘chair’ or using round-robin formats
5. Cultural Awareness Training: Provide training on cultural competence, communicating cross culturally and the importance of embracing diverse perspectives

Speaking up in financial services, especially within the context of foreign banks operating in the UK, requires navigating complex cultural, psychological, generational and hierarchical landscapes. By understanding and addressing these dynamics, leaders can create an environment where every team member feels safe and empowered to share their ideas and concerns. In doing so, they not only foster a more inclusive workplace but also drive innovation and performance in an increasingly competitive industry.