Ken Henry and the establishment

Our establishment blunders on, oblivious to its own self-importance and how it perpetuates poor corporate performance.

Take the banking sector, post Hayne Royal Commission.

New board members and management. More money and teeth for the regulator. Highly emotive TV ads designed to convince us financial institutions have finally acquired a heart.

But there's been no real change. It's largely business as usual for those in positions of authority.

The why is simple: the upper echelon believe it's in their interests to go on persuading the masses that politicians, lawyers and executives are at the top because they possess a formal solution to whatever ails us.

His refusal to obey Rowena Orr's demand to cough-up a yes/no answer at the Commission hearings was not an example of elite indifference. Ken Henry was merely highlighting an inconvenient higher truth about the need to devolve power and responsibility.

The outgoing NAB chairman and fellow Taree native went to lengths to explain the cultural reform program he helped set in train.

Purpose and vision are paramount. Hundreds of staff confirmed for him that a bank is – or at least should be – about customers. In particular, "helping people in times of difficulty".

He also said shared purpose and meaning come from stories, such as how a prior incarnation of NAB bravely bankrolled the makers of Vegemite. The pursuit of profits isn't as important.

When pressed to spell out exactly how NAB intended to establish a customer-centric bank, Henry alluded to the metaphysical, the abandoned spirit of capitalism.

Good culture can't be guaranteed or coerced, since what ultimately matters to human beings isn't formulaic. A quality service requires a personalised approach and a personalised approach deals with the particularities that elude binary data and algorithms.

This doesn't mean, of course, that systems and organisational policies are unnecessary. Success requires a statement of values back up with consistent symbolic acts from leadership.

Yet the essential drivers of culture remain organic, always beyond our intellectual efforts to make things happen.

"We understand what the concepts mean in general terms," he informed Orr. "But I am not sure I could satisfy you with – in fact I am sure I couldn't satisfy you with a very precise definition."

Hence his radical plan to treat customers as ends in themselves. To regard them as means to a profit objective wrongly presumes human relations are quantifiable and thus within our control.

It's ironic. For leaders to cultivate the right culture – whether in business or across society generally – they must first unconditionally accept the limitations of the political and economic hierarchies they oversee.

Disruptive phenomena such as Brexit and Trumpism confirm it's time this truth be reflected in actual behaviour, not just rhetoric.

If asked, members of the ruling class readily concede there is no silver bullet. But this is not how they act. Nor is it what they want the punters to think.

As any religious zealot knows, moralising requires black-and-white answers. For the establishment to admit it's more nuanced than yes/no or one/zero would put at risk its vast edifice. People must believe implementing the Commission's recommendations will ensure that the failings of the banking sector never happen again. Even though this attitude guarantees they will.

Kenneth Hayne singled out Henry and CEO Andrew Thorburn, suggesting they won't learn from the lessons of the past.

"More particularly," he said, "I was not persuaded that NAB is willing to accept the necessary responsibility for deciding, for itself, what is the right thing to do, and then having its staff act accordingly."

But here's the real ruse.

We endure corporate Groundhog Day because it is the wider establishment which is unwilling to put people before the system, to let go and allow the likes of NAB to take responsibility for performance and entrust it to those at the coalface.

Henry and Thorburn had to go so others at the top, and the swamp of lawyers, bureaucrats, regulators and various hangers-on who depend on them, could continue to obscure the con game that goes on.

In order, perhaps, to retain the prospect of being readmitted to the club down the track, Ken Henry went meekly. It’s a shame he couldn’t muster the conviction of Malcolm Tucker, scapegoated before a public inquiry in the final series of The Thick of It.

"You don't like your species. And you know what – neither do I. But how dare you come and lay this at my door, [when it's] the result of a political class which has given up on morality. And simply pursues popularity at all costs."

"I am you and you are me."