By starting with a clear-eyed view of where your organisation's culture is, you can better articulate what the culture could be - and trigger conversations which link culture to commercial goals.
This article is provided to Changeboard by our Future Talent 2018 partners, Heidrick & Struggles. You can see Heidricks' Managing Partner Colin Price in conversation with Aviva's CEO, Mark Wilson, at Changeboard's Future Talent Conference 2018.
Once derided as “soft stuff,” company culture is now understood to affect business performance, and is increasingly an area of strategic contribution for HR leaders. Yet many culture change efforts fall short of expectations - or fail outright.
One reason? Companies fail to accurately (and candidly) assess their starting point, and therefore create plans that are unrealistic, unsustainable, and unpersuasive. By starting with a clear-eyed view of where a culture is, HR leaders can better articulate what a culture could be - and spark the sorts of frank management conversations that help link culture to commercial goals.
In our experience, company cultures fall somewhere along a recognisable continuum. Here’s how each looks from the inside out:
Complacent (level 0)
How culture is viewed: Our values exist on the company website and nowhere else. There’s no linkage between HR processes and foundational elements like company mission, vision, and values - and there’s no way of measuring how our people are (or aren’t) aligned to them. Culture never factors in strategic discussion.
HR’s challenge: Initiating difficult conversations; constructively challenging the status quo. The starting point for most companies is a broad belief that the existing culture is acceptable and even immutable (“this is just how we do things” is a common refrain we hear from companies at this level). The challenge for HR is exacerbated when companies are meeting their financial targets, as this can blind the company to potential improvement.
Curious (level 1)
How culture is viewed: We recognise that culture matters, and our values are taken seriously and included in onboarding, but there is little co-ordinated effort to communicate what our values mean - let alone what behaviours produce them.
HR’s challenge: Getting beyond the notion that culture is about employee happiness; making a fact-based link between culture and employee performance.
This was true of a North American pharma manufacturer whose top team realised that counterproductive employee behaviours were thwarting the company’s growth ambitions. In response, the CHRO was asked to lead an effort to define values, train managers and employees, and revise performance management processes. These positive moves helped the company improve - to a point. Without full commitment from the leadership team, such efforts tend to only achieve modest gains.
Committed (level 2)
How culture is viewed: Culture matters, and we have committed resources to improving it. Our values are linked to specific behaviours in performance reviews, and we’re seeing positive results. Yet there’s no link to ROI, and some senior leaders proclaim love for the values without actually living them.
HR’s challenge: Helping leadership see cultural change as a serious business initiative and not be dismissed as “training.”
Case in point: An energy company’s leadership team had done the hard work of articulating company values and tying them to behaviours. Yet that same team wasn’t following through in their own behaviours - a point that was not lost on their subordinates, who were becoming cynical about the initiative.
The “aha moment” came during a team exercise convened by the CHRO, when the leaders realised they were exhibiting the same sorts of dysfunctions they were trying to rid the rest of the company of. The realisation proved a turning point in their improvement efforts.
Catalysed (level 3)
How culture is viewed: Culture and people metrics are linked in tangible ways, and employees are increasingly engaged, motivated, and likely to stay. We track these connections regularly and take them seriously, though perhaps not as seriously as our traditional customer-focused metrics.
HR’s challenge: Helping leadership resist the urge to conflate employee-related culture metrics with customer-related metrics. The former drives the latter.
A large US utilities firm centralised its employee engagement data, as well as the results of a quarterly firm-wide culture survey, to improve its ability to act on what it learned. This helped HR to proactively address issues. When the company saw, for example, that employees in some units felt undervalued, HR implemented programmes to boost engagement.
These included a new, company-wide coaching model as well as a positive recognition programme to publicly reward customer-focused behaviour. The result was stronger employee engagement and higher levels of customer satisfaction, which in turn raised morale and improved employee engagement further.
Customer centric (level 4)
How culture is viewed: The environment we create for employees is increasingly the one that customers experience (reflected in our strong customer satisfaction scores). Our people feel empowered to make customer-related decisions based on principles, not procedures. Our goal is to be internally aligned and externally adaptable.
HR’s challenge: Encouraging the cross-pollination of ideas and innovations across the C-suite.
Consider the high performing financial services organisation that wanted to improve upon its position of strength. With a view of the collective enterprise and a robust company culture steeped in collaboration, HR was able to help bridge silo behavior and adapt faster to changing customer needs with redesigned products that were better - and faster to market - than what competitors could offer.
Continuous (level 5)
How culture is viewed: We can list the positive aspects of our culture that must never change, yet we are agile in pursuing opportunities in an evolving market. When our customers or employees speak, we listen and make visible improvements based on what we learn.
HR’s challenge: Sustaining our success. Considering all the changes in the workforce, new expectations will continually threaten to disrupt a company’s culture.
Forward-looking HR leaders won’t be sitting still - whether it’s facing up to the challenges of managing the “virtual” workplace, understanding the implications of automation on employment, or wrestling with the complications of having five generations working side by side - the best HR leaders will be keenly aware of how re-envisioning company culture can help make the most of tomorrow’s workforce.
Focus on the path to improvement
Few companies reach level five, and most companies enjoy significant performance benefits as low as levels two and three.
The point is not the destination, but the path to improvement that companies take by focusing on the principles of culture change.
Thinking of culture as a continuum also helps HR leaders guard against backsliding: for example, during leadership transitions, or moments of crisis where the temptation is strong to take shortcuts that trade short-term performance for long-term organisational wellbeing.
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About the authors
Barbara Porter is a partner and chief customer experience officer at Senn Delaney. She is based in Chicago.
Matthew Herzberg leads the Industrial Practice at Senn Delaney, a Heidrick & Struggles company; he is based in Huntington Beach, California.