A Forbes study revealed that, although culture was a top-three priority for company boards, only 20% actually spent the time required to manage and improve it. Hardly surprising, given that even industry experts often seem to be at a loss when it comes to measuring, managing and changing culture. Despite ‘culture’ being the buzz word of the last few years, many of us are still left to ponder… what actually is it?
A company’s culture is like the personality of the company. It is how most of the people who make up the group behave (all of them, not just the leaders) and the underlying values that motivate these behaviours. More simply, culture is the tacit common experience of ‘how (and why) things are done around here’. Culture is made of instinctive and largely subconscious habits, attitudes and beliefs. Symbolic artefacts do not define a culture. They may help strengthen culture, but only if they are consistent with the operating values.
Cultures are also constantly evolving, responding to changes in the environment, to the membership, and to the leadership. When the company’s culture is aligned with its vision and strategy, culture is a formidable ally. If not, culture can undermine even the best laid strategic and operational plans. The truth is that the vast majority of business transformations fail, and the biggest impediment is culture. Can you afford to keep guessing at culture?
To take the reins on culture, it’s clear why more and more executives are turning to organisational psychologists. Psychology is the field of science dedicated to understanding human motivations, behaviour and mental processes. Like most personality change, culture change won’t be swift or easy, and a desire to change isn’t enough… you have to follow through. The good news is, it is possible if you are willing to invest in it.
So where can you start?
- Get clear on what culture is and why it matters
Culture is not a quick-fix for employee dissatisfaction, increasing competition, or declining revenue. Culture is about long-term value creation and competitive advantage. The benefits of culture include employee engagement and motivation, operational efficiency and quality, customer loyalty, and ultimately revenue and shareholder performance. Furthermore, a well-aligned culture can protect a company from disrupted industry and economic uncertainty… but it’s important for leaders to take culture seriously before they find themselves under external scrutiny.
- You can only manage what you can measure
To be able to look objectively at your culture, you will need to devote resources to evaluating and understanding it. Culture is people, but how do we measure that? Indicators of employee engagement or organisational performance will show you the consequences of culture, but the antecedent to culture is individual values. These are not the company values brainstormed by the leadership team and posted on the website. They are the actual behaviours and underlying values of every employee. Culture is represented by the majority rule. If you want to start taking culture seriously, HR needs valid and reliable metrics and companywide collaboration.
- Be accountable to the data
If your actual operating culture violates the beliefs and values articulated in your stated or aspirational culture, you need to get real about the discrepancy. Get rid of confusing or contradictory values. Employees and customers alike can sense this pretense and it will have a corrosive effect on morale. Once you are clear idea about where you are and what your aspirational culture (where you want to be) looks like, communicate your intentions to employees and open the floor to genuine and safe dialogue around how your values will be defined and delivered.
- You can talk the talk, but can you walk the walk?
Managing culture requires both a top-down and bottom-up approach. The tone at the top is critical. Leaders must embody the organisational values in their daily behaviours. In order to feel competent at this, development programs and training opportunities can be introduced. HR also needs to demonstrate good stewardship, understand behaviour throughout the company, and align company values with incentives (benefits, compensation, promotion, development, recruitment) and role design. Good data and analytics are crucial to managing culture. If you can’t spot problems you can’t address them!
- Monitor and maintain
Start slowly by focusing on changing 2 or 3 measurable behaviours that are a part of your everyday routines. Line management can gradually impose new rules and devote resources to evaluating culture strength and change. Furthermore, as the organisation reaches different stages of growth and adapts to new markets and strategies, the aspirational cultural style may change as well.
Warning: A strong culture can be a roadblock to success if misaligned with strategy. In our next blog we will be looking into how leaders design aspirational cultures.