LONDON -- When Barclays' new boss Antony Jenkins wanted to tell his senior bankers what was in store for them, he gathered all 125 around him on specially built tiered seats, styled like an ancient Greek agora to guarantee eye contact and conversation.
The British bank's reputation was battered and it had to change, but to transform attitudes across 140,000 staff Jenkins knew his top bankers had to buy into his plan - or quit.
Other big organisations had faced profound change and had to adapt, including Kodak and the Roman Empire, he told them. Not all of them succeeded.
To drive home his message, the away-day last November ended in a room displaying unflattering newspaper headlines about the troubles his 300-year-old bank had recently endured.
Jenkins spread his message wider to all the bank's staff last month, telling them they should leave if they do not want to sign up to the new regime. "The rules have changed," he said in a memo.
He will unveil his grand plan, dubbed Project Transform, to the wider world on Tuesday at London's Edwardian Royal Horticultural Halls, an exhibition space where daylight floods in through a high glass-vaulted ceiling.
Officially, the bank is keeping quiet about exactly what Jenkins will say. But sources say the message for investors will be his plans to boost profitability, cut underperforming areas and slash costs. That could see him axe about 2,000 investment bank jobs, almost 10 percent of its 23,300 staff, as it retreats in Asia and trims in all areas.
In an attempt to placate politicians, regulators and the public, Jenkins is expected to promise profound change in the bank's standards and culture.
"He's absolutely right to identify culture as his single biggest challenge. That more than anything will define his success," said a former senior executive at the bank, who declined to comment publicly about the bank.
"It was aggressive indeed and it was a very driven culture under Bob Diamond," he said, referring to Barclays' now ousted CEO. But he added it was an issue for all investment banks rather than just Barclays, and it was no different at UBS , Deutsche Bank or RBS.
But implementing change across Britain's fourth-biggest bank will be a tall order.
"Fundamental change in culture is very difficult to do in any business at any time. You are asking an awful lot of people to do things differently, and the difficulty is defining how you want them to behave."
Emails released by regulators when the bank was fined for rigging the benchmark Libor interest rate showed a cavalier attitude among Barclays traders. "Done ... for you big boy," one of the bank's traders told a trader at another firm, and in return he was promised a bottle of Bollinger champagne.
Jenkins will have to dodge the fall-out from past problems.
Barclays was rocked by a $450 million fine for its Libor manipulation in June that felled its chairman, Marcus Agius, along with Diamond; its bill to compensate customers for mis-sold products has hit 3.5 billion pounds; and a UK lawmaker on Tuesday re-opened criticism of how it advised clients on "industrial scale tax avoidance".
It is also being investigated over a controversial 5.3 billion pound ($8.3 billion) fundraising from Qatar four years ago that kept Barclays free from a state bailout. Last week the Financial Times said that included scrutiny on an allegation the bank lent Qatar money to invest in the bank and didn't disclose it.
"The recent comments about the Qatari deal made me rather edgy. I don't think we can be 100 percent confident of a skeleton-free closet just yet," said one of the bank's 25 biggest investors, who declined to be named.
Lawmakers are also concerned that cultural problems at the bank are ingrained.
"It doesn't seem to matter what the scandal is, Barclays seems to have a finger in each pie, quite a big one," Andrew Tyrie, chairman of the Britain's Parliamentary Commission on Banking Standards (PCBS), said this week.
Even before the Libor scandal erupted, Barclays' relationship with the Financial Services Authority was under strain, it has emerged, with the FSA chairman warning Agius months earlier that his bank was often "at the aggressive end of interpretation of the relevant rules and regulations".
Criticism has not just been aimed at the investment bank - standards have also come under fire at its retail bank for aggressive sales tactics. And last year an independent report criticised an aggressive management culture at its U.S. wealth management arm.
Jenkins admits he can't be sure there won't be more problems from legacy issues, but bank insiders say he believes all the big issues are on the table.
He expects it will take five years to rebuild his bank - one year to stabilise, three years to improve returns and longer to carry forward momentum and rebuild the brand - but he warned last week it may take a decade.
He is keen to have potential distractions out the way before Tuesday, and in the last two weeks has announced he will not take a bonus for 2012, set aside another 1 billion pounds for mis-selling, and said Finance Director Chris Lucas and general counsel Mark Harding will step down.
Hundreds of investment bank jobs have been cut in the last fortnight too. Almost 300 staff have gone in Barclays' advisory and underwriting unit, or about 10 percent - with cuts deeper in Asia but shallower in the United States - and that was likely to be mirrored across the investment bank, one senior source said.
Jenkins has made clear he will cut pay and axe activities where there is a risk of reputational damage, including tax advisory and trading agricultural commodities.
David Walker, who was picked as chairman three weeks before Jenkins became CEO, this week said new non-executive directors were lined up. John Sunderland, head of the remuneration committee, appears at risk after being slammed by politicians for defending a past payout to Diamond.
SHREDDING BAD BEHAVIOUR
Jenkins, 51, joined Barclays in 1983 on its management development programme but left in 1989 and has spent most of his career - 19 years - at Citigroup in London and New York.
He returned to Barclays seven years ago to turn around its Barclaycard credit card arm and took on all its retail and commercial banking in November 2009.
The Oxford University graduate, who grew up in the central English town of Stoke-on-Trent, is softly spoken, prone to management-speak and is meticulous in his planning, colleagues say.
"He can and will be ruthless if needed," one former colleague said. "He had incredible appetite for detail and interpreting that in a strategic format and being able to come up fairly quickly and decisively with a way forward that would suit his business plan."
His choice of the Roman Empire is likely to have been to highlight a particular problem. After two centuries of prosperity, the empire underwent a crisis that threatened its existence, which many blamed on an over-reliance on mercenaries - a criticism that has been levelled at banks for their problems.
"When you grow a business too quickly you hire people from many different places, and some of them ... you really have to qualify as mercenaries," former UBS CEO Marcel Roehner admitted to Tyrie's commission last month.
Jenkins this week told the same commission he would tackle pay and challenge bad behaviour with an "iron will" and "shred situations where we were too short-term focused or too aggressive."
"It's very hard for organisations that have a sense of their own success to recognise when the environment has changed and they need to change their behaviours," he added.
Jenkins' arrival and first 5-1/2 months in the job have been well received by British politicians and regulators - who were keen to have a retail banker at the helm and effectively forced the removal of Diamond.
Investors, too, have responded well and Barclays shares are up 59 percent since Jenkins started on Aug. 30, more than double the rise in Europe's bank index over that time. The shares now trade at around 0.7 times book value, still a discount to around 1 times for its peers.
"It is fair to say that investors are in a more forgiving mood right now ... it feels like there's an end in sight to all the egregious stuff we have come across," said another of the bank's top 25 investors.
That shareholder and others said they like the universal banking model, but want action to cut pay so that dividends and returns can bump up.
Jenkins will not axe the investment bank and said there had been no internal talk about selling it. Nor will he cut it as aggressively as at UBS, which is shedding 10,000 jobs, but he is expected to lower ambitions.
The business, built by Diamond into a debt market powerhouse and using the purchase of the U.S. arm of Lehman Brothers as a launch pad for equities and advisory, is one of the top global firms and is expected to deliver 4 billion pounds of profits when 2012 results are released on Tuesday, out of group earnings of 7 billion pounds.
But like its rivals, it faces higher regulatory costs and modest growth prospects, which most in the industry regard as a structural rather than a cyclical change.
Change will not be limited to that high-profile division, as Jenkins needs to show how he can deliver a sustainable return on equity of 11.5 percent. The keen technology and gadgets buff is expected to set out how IT advances can improve service and cut costs.
The British retail bank and Barclaycard operations are performing strongly and should help the bank deliver a return on investment of near 9 percent for 2012, up from 6.6 percent in 2011.
But a big task for Jenkins is to limit losses and shrink the bank's troubled operations in Spain, Portugal, Italy and France, which it has failed to sell in recent years. Its wealth management and African businesses are both considered potentially top class but in need of a jump-start, analysts say.($1 = 0.6368 British pounds)
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