After 2008, culture became one of the standard explanations for what had gone wrong in banking. Not just regulation, not just leverage, not just badly understood products, but something about how people inside these organisations had learned to behave. Aggressive targets, short horizons, and very little appetite for anyone who wanted to slow things down and ask a question.

Which leads to the obvious question: can that be fixed? And I want to start by noting that the question smuggles in an assumption, because it treats culture as a thing an organisation has, like a policy or a product line, rather than something an organisation is. That distinction turns out to matter quite a lot.

The Case That Settles Most of the Argument

If you want to know whether stated values can survive contact with an incentive structure, Wells Fargo ran the experiment for us.

The bank had a cross-selling target known internally by the slogan Eight is Great, meaning eight products per household. It also had a published code of ethics and an ethics hotline for reporting misconduct. When the scandal broke in 2016, regulators found that employees had opened millions of accounts customers had never asked for. The bank was fined, the chief executive eventually resigned, and he was later personally fined and barred from the industry.

Here is the detail that matters most. Employees who used that ethics hotline were, in documented cases, fired shortly afterwards. One called in September 2013 after being pressured to open accounts he knew were improper, telling the line he was being asked to do things that were not ethical and would be grounds for discharge. He was dismissed eight days later, officially for lateness. A former human resources official subsequently described the method: monitor whoever had reported, wait for a minor infraction, and terminate on that basis.

This is not just a matter of former staff making claims. In April 2017 the United States Department of Labor ordered Wells Fargo to reinstate a Los Angeles branch manager who had taken suspected fraud to his supervisors and to the ethics line, and to pay him roughly 5.4 million dollars in lost earnings and damages. It was the largest individual award the agency had issued in a whistleblower case, and the bank said it would contest it.

So the organisation had built the exact mechanism that culture-change programmes recommend, a formal and confidential channel for raising concerns, and the surrounding incentive system chewed through it anyway.

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The values were not absent. They were written down, distributed, and equipped with a reporting line. They simply lost, every day, to the thing that determined whether someone kept their job.

Ali Abdisalam Hussein

Why Values Statements Lose

This is not really a story about hypocrisy. Most of the people writing those value statements meant them. It is a story about which signal is louder, and employees are extremely good at reading the louder one.

Nobody has to explicitly tell an employee which column governs. They work it out in their first few months by watching who gets promoted. And once they have worked it out, further communications about the left-hand column are read as public relations, not as instruction.

The Part of the Argument That Got Tested

The interesting thing about the post-2008 period is that the argument I am making here was not left as theory. Regulators reached the same conclusion, decided the lever was structural rather than rhetorical, and pulled it.

• Deferral of variable pay, stretching bonuses over a period of years rather than paying them in the year the revenue was booked
• Clawback provisions allowing pay to be recovered after the fact when the results turn out badly
• The Senior Managers and Certification Regime in the UK, which assigns named individuals personal accountability for specific areas of a firm
• Requirements to consider conduct, and not only revenue, in how staff are assessed and paid

Look at what these have in common. Not one of them is a values statement, a poster or a training day. Every one of them changes the answer to a concrete question an employee can ask: what happens to me, personally, if this goes wrong later? That is the mechanism the entire argument rests on, and it is genuinely different from asking people to care more.

Whether it has worked is a fair question and the honest answer is partially. Conduct scandals did not stop. But the specific pattern of booking a large bonus on revenue that detonates three years later became meaningfully harder to execute, which is what the intervention was actually aimed at.

The Obstacles Are Real

None of this makes culture change easy, and the difficulties are worth being specific about.

• Assumptions that have been in place for years stop feeling like choices and start feeling like how things simply are
• Middle managers absorb the new strategy in meetings and keep applying the old pressure to their teams on Monday
• Employees who have watched previous change programmes arrive and evaporate treat the next one as weather rather than climate
• Large banks contain multiple subcultures that do not respond to the same intervention
• Short-term profit pressure returns the moment competitive conditions tighten
• Measuring whether culture has genuinely shifted is much harder than measuring whether the training was delivered

The cynicism one deserves particular attention, because it is self-inflicted and it compounds. Every culture programme that is announced and then quietly abandoned raises the cost of the next one. Staff learn, correctly, that the rational response to a new values launch is to wait it out. An organisation can only spend that credibility a limited number of times.

The Harder Objection

There is a more serious challenge to all of this than any item on that list, and it is worth taking seriously rather than waving at. It is the argument that culture is not a variable management can adjust at all.

On this view, culture is not one of the things an organisation possesses alongside its strategy and its balance sheet. It is what the organisation is: the accumulated meaning that emerges from thousands of daily interactions, which no one is positioned to author. If that is right, then management cannot change culture in any direct sense, because culture is not the sort of thing that responds to being targeted. Talking about a culture programme is then a bit like announcing a programme to change the weather.

I think this objection is largely correct about the mechanism and largely wrong about the conclusion. Management genuinely cannot reach in and set culture directly. But management does control the conditions culture forms in, which is a different and more powerful thing. You cannot instruct a culture. You can absolutely determine what behaviour is survivable within it.

What Culture Actually Is

Working through this has moved me to a slightly different position than the one I started with. My instinct was that culture is something you change by changing incentives, structures and leadership behaviour. I now think that framing is still one step off.

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Culture is not a thing you change by adjusting what gets rewarded, tolerated, measured and promoted. Culture is the pattern of what gets rewarded, tolerated, measured and promoted. It is not the target. It is the readout.

Ali Abdisalam Hussein

That reframing dissolves most of the confusion around culture initiatives. If culture is the readout, then a programme aimed at culture directly, while leaving the underlying systems untouched, is an attempt to change a reading without changing what is being measured. It is not that such programmes are insufficient. They are aimed at the wrong object entirely.

Where It Becomes Visible

The thing I keep returning to is that culture is unreadable in good conditions. Any bank can sound principled in a year when targets are being met comfortably and nobody has to choose between two things they claim to value. Stated values cost nothing when nothing is being traded against them.

The real reading is only available under pressure. When competition sharpens, when a quarter is falling short, when hitting the number requires something the values would not endorse, the organisation reveals which of the two it actually meant. That moment is not a departure from the culture. It is the only honest measurement of it anyone ever gets.

So yes, banking culture can be changed. It just cannot be announced. And the organisations that manage it are generally not the ones running the most visible culture programmes. They are the ones that changed what happens to an employee who hits the number the wrong way, and then held that position through a bad quarter.