The joining of UBS and Credit Suisse, following the latter’s near-meltdown earlier this year, is still ongoing and there are already reports of culture clashes between the two banks swirling amidst rumours of thousands of job cuts to come.
This may have been called a merger but in truth it was an acquisition – one that brings together two huge rivals headquartered in the same country. The ‘A’ part of M&A has very different connotations to the ‘M’ when it comes to mindset, corporate culture and employee behaviours going forward.
The shift in mindset required of the two businesses will be immense. They’re going from competitors to collaborators. That’s an attitudinal shift that will no doubt feel counter intuitive to many at each organisation, so there’s little doubt the leadership has a challenging job ahead to create a shared sense of ownership moving forward.
Culture is certainly not a ‘soft’ issue for financial institutions - industry regulators scrutinise corporate culture more closely than ever now. Regulators have clear expectations following any M&A deal, starting at the top with what’s expected of leaders and board members. They also recognise the importance of embedding culture at every level of the business.
This is a chance for UBS to pause, assess the strength of its own culture as it stands and re-evaluate. It will want to engage its people in the process to define the behaviours needed for the merged entity to thrive in the future as a larger organisation, which in turn will help it get critical buy-in from those people and a stronger sense of ownership in their shared future.
Depending on the scale of the integration, UBS may want to consider taking the strongest elements of behaviours exhibited in both organisations – so long as they align to what the bank has identified as critical to its future success.
There will inevitably be shared values and areas where they are compatible. Those need to be surfaced and become a point of focus at the beginning of the integration process. UBS will equally need to pinpoint where the areas of tension are, so that they can address them quickly and double down on creating a sense of belonging and connection.
A shared culture will help the new bank grow and weather disruption.With so much anxiety over headcount reductions, that sense of belonging can go some way to retaining the talent they’ll need in the future.
The role of leadership also can’t be understated either. They have to set expectations, communicate points of alignment and be role models for the broader and broadened workforce.
Culture is also as much an external factor as an internal one. A strong corporate culture is how you engender trust. Shared values and behaviours also directly impact the customer experience. Both individuals and businesses are conscious of who they give their custom to, and they’re going to be watching UBS as closely as the regulators are. As such, this cultural transition is going to have to underpin everything they do.
But culture change will take time. Combining two large organisations, especially if they have differing individual cultures and amidst a sea of uncertainty over the future, won’t happen overnight. UBS will need to be honest with its people, whether homegrown or from Credit Suisse, that they’re on a journey.
That means recognising successes as they arise, focusing on fostering relationships, and communicating consistency and transparently. They’re going to have to identify what being a ‘better, stronger bank’ means to them and move towards that objective.