A recent research from McKinsey & Company finds the staff of the Bank of England are dissatisfied with elements of how the institution is run. While not all bad news, the report finds that listening to staff will allow it to “become more nimble and agile as an organisation,” allowing the institution to make the changes required to operate well in the post crisis financial environment.
In October last year the Bank of England (BOE) hired McKinsey & Company to support it with drafting a new strategy and roadmap. As part of the research, the consultants in November asked staff at the central bank to evaluate the management of the 320 year old institution. The internal survey, which looked at competencies and capabilities in 37 management practices (based on McKinsey’s ‘Organizational Health Index’), was instigated by Mark Carney, the institution’s 2013 appointed governor, as one of his first acts in his bid to transform the institution.
The survey found* that, overall, the central bank scored above-average relative to other public sector organisations. Staff are generally satisfied with the culture of the institution, describing its goals as “having a noble purpose” and “being of service to others.” There were however concerns about some elements of the institution’s management, relating in particular to its direction, accountability and coordination. Key words used by some of the 2.266 staff that took part in the survey, 67% of its workforce, described the institution to be “slow moving,” “hierarchical” and plagued by “internal politics.”
Many of the BoE’s staff indicated frustration at their “insufficient authority to make decisions,” and that the quantitative methods used to oversee the running of the institution were “comparatively ineffective.” In its hierarchical structure, the bank was missing out on the potential innovative spirit of its wider staff and could "benefit from a more open, transparent and consultative style of leadership receptive to challenge.”
McKinsey’s Organizational Health Index’ methodology.
In addition, an overlarge majority of staff was frustrated by the wage-stagnation and method for providing financial incentives. Only 11% of staff answered that they “always” or “often” agreed with the way in which the institution doled out financial incentives.
The results of the survey have been taken seriously, comments Charlotte Hogg**, a former McKinsey employee and now the Chief Operations Officer at the BOE. “To truly transform this institution, it was crucial to have staff engagement into all aspects of what we do and how we do it,” she says, adding “Staff told us very clearly what they wanted to see change. We listened, and we responded.”
On the back of the survey and broader strategic review, Carney earlier this year released his new “One Bank” strategy. With the new roadmap the central bank aims at responding to the need of merging new bank regulatory powers with its monetary-policy function, as well as boosting its external impact and internal efficiency.
* The survey was not made public by the Bank of England, yet after a lengthy seven month process through the Freedom of Information Act, Bloomberg was given access to the aggregated 17-page results of the research.
** Charlotte Hogg started her career with the Bank of England, after which she joined McKinsey & Company in 1994 in Washington. In 2001 she became Managing Director for Strategy and Planning at Morgan Stanley. Following a period at Experian (Managing Director UK and Ireland) and Banco Santander (Head of Retail Distribution and Intermediaries) she rejoined the UK central bank early 2013. In her role as COO she led the six-month review by McKinsey.