The engine that fuels culture transformation
By Louise Taylor Green, CHRL, CHRE
I’ll admit it. I’ve been agitated at times when listening to people talk about workplace culture. I get a bit wound up when I hear things like, “We have such an amazing culture,” followed by, “because I get to take Friday afternoons off in the summer.”
Or, “Our culture sucks. My supervisor denied my vacation request because we’re two people short,” or, “I’m sick of this toxic culture. Something needs to be done around here.”
This word “culture” has become so central to our language and conversation around work, but it is often really misunderstood because culture isn’t one thing; it’s a proxy for a multitude of factors. As a former CHRO and now a CEO, I kinda take culture seriously (okay, insight to my soul, I take it really seriously and have been a bit of a culture-nerd for decades), learning through study and lived-experience what it really takes to successfully lead culture transformation.
I’ve heard many CEO’s say, “We need a (pick any one of the following: learning, agile, high-performance, customer-centric, accountability, lean, adaptive, safety, values-based, excellence,
performance-driven, resilient) culture.” The problem is, sometimes the desired culture is declared without really understanding what changing the culture should help the company achieve. HR jumps into execution without first laying out the roadmap; a sure recipe for unsustainable change.
Like any major change initiative, you need authentic senior-leadership sponsorship and a purposeful plan. Begin with the end in mind and consider what you’re actually aiming for and why it matters. Building the “what” and “why” has got to come before the “how” part of any change initiative and when it comes to culture, you’ve got to start with what the organization is trying to accomplish and what it stands for. Usually, this is expressed through the company’s mission, strategy and values.
I submit that there are really three simple reasons to consider changing your culture: Something isn’t right in the behaviours of leaders or employees, performance is not as strong as it needs to be or you are about to undergo a significant change (inside the company or in the marketplace). How do you get ahead of the curve? Start with an examination of your culture and work climate.
What is the difference between culture and work climate?
In the fields of organizational behaviour or industrial/organizational psychology, there are distinctions between culture and climate in that culture is shared by all or most members of a group, whereas climate is seen as the patterns of behaviour, attitudes and feelings that portray work-life in a particular organization. Volumes of behavioural science research on the interplay between the two topics exists.
Culture. Google it. I dare you. You’ll get about 6.1 billion results in about half a second. You could be absolutely consumed by the anthropological origins, kitschy videos, scholarly articles, images and an abundance of professional consulting offers to help you change your workplace culture. It’s actually quite overwhelming. Asking people to agree on a definition of workplace culture is a bit like asking, “What is the best flavour of ice cream?” It will result in some common themes, but not necessarily a unified belief.
That said, let me share my working definition of workplace culture. Workplace culture is a system of values, beliefs, behaviours and ceremonies that shape how real work gets done in an organization. It is the sum of what is co-created and experienced between leaders, employees and customers.
A January 2018 HBR article, “The Culture Factor,” defines culture this way:
“Culture is the tacit social order of an organization: It shapes attitudes and behaviours in wide-ranging and durable ways. Cultural norms define what is encouraged, discouraged, accepted, or rejected within a group. When properly aligned with personal values, drives, and needs, culture can unleash tremendous amounts of energy toward a shared purpose and foster an organization’s capacity to thrive.”
Fairly consistent in most of the definitions of culture, we see an emphasis on values as an essential underpinning of culture. Values instruct people what to do in a crisis or in times of opportunity. Where were the corporate values before public scandal struck in the Weinstein Company, VW’s “diesel-gate,” Google’s developer walk-out or the RCMP’s sexual harassment disgrace? Values really matter!
Work climate is the atmosphere of what it feels like to work in a group or on a team. It can be highly variable from one team to another, even under the same overarching organizational culture.
To amplify the distinctions, let’s take two departments, side by side, in one organization as an illustrative example. The dominant culture of the organization is highly constructive; evidenced by humanistic and encouraging behaviours and an unwavering commitment to their customers. The declared values of the company are: service, integrity, results. In one team, the nature of their work is highly predictable and somewhat mechanistic in nature. The manager has established accepted rules of conformity and precision around how work gets done – the correctness of the output matters immensely. It feels (work climate) predictable, precise and stiff. In the other team, the work is highly creative, organic and unpredictable. It is project based and every client engagement is different. The manager has established collaborative, dynamic ways of team members coming together to collectively solve the client need. It feels (work climate) active, fluid, artistic and inventive. Two starkly different climates under the umbrella of one culture; both teams living the values.
Why does it matter?
Organization’s really only have two kinds of capital: financial and human. Strategy drives financial performance and culture enables human performance. Let’s face it, any competitor can copy your strategy. They can even copycat your products (maybe not right away or without a legal battle).
How does a firm safeguard against losing its competitive advantage? Culture – the one thing no one else can exactly replicate. I know it may sound cliché, but Peter Drucker is credited with saying that, “culture eats strategy for breakfast,” and, in this humble HR professional’s experience, it is absolutely true. The culture of a firm can affect large scale change such as acquisitions, mergers, proprietary business processes, entry to new markets, product innovation and business transformation. The culture can actively or passively resist the change or accelerate it; so how fantastic your strategy is doesn’t really matter if the culture can’t be relied on to execute it.
Today’s organizations are competing for top talent, battling competitors for brand loyalty and customer trust, striving for sustained results – and that’s all before 5 p.m. on Monday! Organizations need to innovate at a higher velocity than ever before with constantly increasing complexity and shifting customer preferences. Strong cultures fuelled by positive work climates can stimulate higher engagement, motivation and performance.
Employees and customers aren’t the only stakeholders paying attention. Investors want to know about the cultures of the firms they’re investing in. A 2017, CEB report indicated that since 2010, the portion of the world’s largest 1,600 companies (by market cap) that discuss talent management with investors in quarterly earnings calls was up 15 per cent and that a full 67 per cent of CEOs from those companies were being asked to talk about talent; most specifically about culture.
What’s a bit scary about that is in an adjacent 2017 Gartner survey of top HR leaders, only 31 per cent of HR leaders felt they had the culture their organization needed to drive future business performance. What is HR preparing the CEO to say about the culture? CHRO’s need to equip the CEO and the CFO with evidence of how the culture is influencing the organization’s results.
How to change it
Culture can be changed. It isn’t fast and it isn’t easy. There really are no shortcuts, no one-size-fits-all, no silver bullets. It’s always adapting to changing conditions which is why it always needs to be habitually managed. Leaving culture and work climate to chance is like rolling the dice on your company’s future.
Senior leaders should clearly define the aspirational culture – what type of culture is desired. Knowing where you are now, what you want the culture to be like and what the gaps are will help to define where HR and management need to refine work practices, programs, organization design, physical plant, etc., throughout the organization.
One way to accelerate culture change is to start with a measurement of the current culture. Once you know, reliably, what the current culture is really like as experienced through the workforce, you’ll know what programs, processes and systems to abandon, preserve and strengthen or shape and create.
There are now many tools to measure your culture, but proceed with caution. Culture measurement and engagement surveys are not the same instruments, so don’t be seduced into purchasing a panacea survey solution. Look for tools that are valid, reliable and provide a standardized survey logic that allows comprehensive analysis of the data and measurement over time, so you can repeat the survey and assess what improvements have been accomplished.
If your organization has invested in its culture and business performance is strong, keep doing what you’re doing, but don’t become complacent. Culture is dynamic, it’s ever evolving. Remember that culture has to be taught. It’s three-dimensional learning – behavioural, cognitive and emotional. The work climate needs to adapt to keep pace with the cultural and business performance requirements.
Consider bringing in a third-party to conduct a culture audit. They’ll look at what your intended culture is, what your lived/expressed culture is really like and then conduct a gap analysis. The gaps will point to the work climate dimensions you can modify in order to strengthen or realign the culture. Public, private and not-for-profit boards are asking for this – they are going through their audit or HR committees to ask for evidence that the culture is strong enough to sustain or deliver desired performance, and that the company has the right work practices in place to avoid reputational and income risks (e.g. public harassment complaints or fraud allegations that erode stakeholder confidence). Boards don’t have insight into daily operations, so by looking at culture and work climate through the risk lens, they can pinpoint vulnerabilities.
Culture is truly important. Organization’s need non-negotiable values, the right people with the right attitudes and behaviours and operational practices that curate the desired work climate as an enabler of the organization’s desired performance. Your culture is an expression of your ethos and it is the key to winning in today’s complex business environments.
Louise Taylor Green is the CEO of the Human Resources Professionals Association (HRPA).