21 July 2016

Best and worst of corporate culture

It is the best of times, it is the worst of times.

Sustainable living, extreme weather.

Pokemon Go, Pokemon Go.


There’s been some highly polarised reactions to phenomena of unbelievable extremes shaking up the world lately. The best of times and the worst of times can occur at once, and sometimes it is hard to make sense of it all. F. Scott Fitzgerald famously suggests that ”the test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.”

Consider today’s blog as an ideation exercise for human resource managers. This quick review of the best and worst about organisational culture, and what to do about it, offers some thought vitamins for your practical use—on a topic that is important yet could be, for many, too nebulous to grasp and implement.

What’s great about organisational culture?

  • 92% of 1,400 CEOs and CFOs believe improving corporate culture would improve the value of the company.
  • Turnover at companies with great culture is 34% lower than turnover at companies with poor culture.
  • High employee engagement increases operating income by 19% and earnings by 28%
  • “If you get the culture right, … delivering great customer service or building a long-term during brand will just happen naturally on its own,” believes Zappos CEO Tony Hsieh.
  • “Culture is a key factor not only in achieving organisational goals, but in attracting and keeping desirable employees, creating a positive public image, and building respectful relationships with stakeholders,” say communications consultants Desson and Clouthier.

What’s not so great about organisational culture?

  • Only 15% of corporate leaders say their firm’s corporate culture was where it needs to be.
  • Turnover at companies with poor culture is 48%, which is 34% higher than turnover at companies with greatculture.
  • Low employee engagement decreases operating income by 33% and earnings by 11%.
  • Less than 25% of leaders have an employee engagement strategy.

In short,

  • If your corporate culture is great right now, well done and keep going!
  • If your corporate culture is not so great right now, take heart, as you’re not alone.

Great organisational culture is something most leaders value yet find challenging to implement.

When you are more interested in catching and keeping high-performing talent and outcomes than pokemons, what action could you take?

One model suggests systematic steps to provide inspiring leadership and informative management before resorting to intimidating power moves. Analogous to providing a big juicy garden of multi-coloured heirloom carrots backed by an intimidating stick of last resort.

Steve Denning, radical management expert, cautions against frequent mistakes in implementing cultural change:

  • Don’t begin by reorganizing the workplace, or using “power tools of coercion”
  • Don’t “parachute in a new team of top managers” but work with existing managers and those who share your vision instead
  • Start by clarifying your vision and communicate it strongly with “leadership storytelling”
  • Put management roles and systems in place to reinforce new desired behaviours
  • Be aware progress gained from “single-fix changes” like Lean, Agile or Scrum may be shortlived if “interlocking elements of the organizational culture” are not addressed

In this Forbes article, Steve provides the fascinating example of how these tips were applied to successfully change the organisational culture of the World Bank.

A second approach is to develop a deeper understanding of how culture shapes leadership, innovation and business transformation, and review the ways your organisation deals with factors influencing culture like how strongly the founder sets the tone for culture (or how thing are done around here and what traits and results are valued around here); and how often (and intensely) shared experiences with positive emotions are provided.

A third approach is to put your organisation through a cultural and organisational effectiveness assessment tool like the Denison Organisational Culture Survey, while gives you a profile of your organisational culture along 12 aspects of Mission, Consistency, Involvement and Adaptability, from which you can celebrate strengths and take systematic action on weaknesses.

So, if you have never considered it, perhaps it would be fruitful to explore how addressing organisational culture could bring you from where you are to where you want to be in your business. Because it touches everything you do and how you do it.

Evolving an organisational culture aligned with core values is a challenge worth undertaking, no matter whether you are facing the best or times or worst of times in your organisation. Getting culture right could, to invoke Charles Dickens, shift your organisation from the winter of despair to the spring of hope, from the season of darkness to the season of light.

Keep focused on creating the best of times.