Take your Culture Off Cruise Control
September 25, 2017
Posted by: CPHR Manitoba
As featured in the Fall 2017 issue of HRmatters
Authored by Catherine Schinkel, a leader in the Human Capital Practice at Deloitte.
A passive approach to managing culture can lead to disaster. HR can take the wheel by working with business leaders to actively manage culture and have an enduring effect on business performance.
Culture drives many outcomes in organizations, perhaps most prominently, employee engagement and retention. Actively managing culture is critical to enabling our organizations to execute strategy, yet many organizations take a passive approach.
It’s like driving down the strategy highway on cruise control: we’re moving along the road, and as long as things are going well, no one is paying much attention to the driver or the vehicle… until things start to veer off course! At best, you may be able to make a course correction – sometimes with significant effort – but at worst, you can be headed for disaster.
Leaders are starting to recognize that culture needs attention, but very few feel prepared for the challenge. In Deloitte’s 2016 Human Capital Trends survey, we learned that 9 out of 10 executives cite work culture as important or very important, yet only 12 percent of companies surveyed believe they understand their culture. In 2017, we continue to see culture and engagement as a top-of-mind concern.
This creates an opportunity for HR to lead, although culture is not just an HR issue: it is a business imperative for every leader in the organization. We all need to understand that a strong workplace culture can help the organization attract top talent, deliver stronger customer service, achieve lower turnover, and be more profitable in the long run.1
Culture is also high on the radar of our employees and potential employees, especially in this era of social media. Every corporate decision can be exposed and discussed, and issues that were once private can now be posted for every employee – and potential employee – to read. Candidates have adopted consumer-like behaviours, turning to sites such as LinkedIn, Facebook and Glassdoor to read reviews and quickly gain insight into an organization’s work culture before making a decision to “purchase.” It is also important to recognize that employee motivations have also changed – when choosing to join or stay with an organization, employees are placing a higher value on purpose, mission, meaning, and work-life integration.2
How can HR lead?
HR leaders can play an important role in helping leaders to actively manage culture, and in doing so, can impact business performance and the bottom line. Here’s how:
1. Understand the difference: culture vs. engagement
Culture is a system of values, beliefs, and behaviors that shape how actual work gets done – “the way things work around here." In contrast, engagement is about employees' level of commitment to the organization and their work – “how people feel about the way things work around here."
Both are critical to business performance, hiring, retention, and innovation – and both need to be actively managed, especially as strategy, circumstance and people change.
2. Make culture a priority
They say “what gets measured gets done.” Organizations need to hold leaders accountable for building strong culture, listening to feedback, and engaging and retaining teams. Therefore, learning how to measure and evaluate engagement and culture are key.
HR can lead by researching and implementing real-time programs to measure and assess culture. (At Deloitte, we use CulturePath, a unique diagnostic tool, to help our clients measure and develop cultural attributes.) New tools are emerging – pulse survey tools, employee sentiment management tools, culture assessment tools – that will make it possible to measure employee sentiment with the same thoroughness that we measure customer sentiment. Use models and tools to understand how culture is manifested in the various work groups across the organization, and how it really feels to employees.
3. Align culture with business strategy
Establishing a vision for culture, and adjusting desired behaviors and processes is particularly important as business strategies evolve over time.
Have you ever heard the expression, “culture eats strategy for breakfast?” It’s a phrase attributed to management guru Peter Drucker, and is intended to make the point that any organization that disconnects strategy from culture is going to put success at risk.
Managing culture means aligning the vision for your culture with the organization’s strategy, then “adjusting the knobs and levers that drive actions and performance, actively managing behavioral and process changes that can have the most lasting impact on the bottom line, and pulling through the emotive engine to make those connections stick.” 3
Processes, policies and systems need to align with the vision for culture and the underpinning values, creating the conditions for success. For example, imagine an organization that wants to drive sales through increased customer centricity. HR has an opportunity to make the connection to culture, first by facilitating alignment among leaders on what behaviours are critical to achieving strategy – so in this case, customer-centric behaviours, which may include spending time with customers and being able to make customer-first decisions – and then by examining what “enablers” need to be in place to make such behaviours possible. Examples in this case may include training on value selling, or policies that empower the sales rep to be customer first through decision rights.
4. Make emotional connections with employees.
Research tells us that “mission-driven” companies have 30 percent higher levels of innovation and 40 percent higher retention.4 We also know that “purpose” is particularly important to millennials, who will soon make up the majority of the workforce.
HR has a role to play by helping the organization articulate its purpose when communicating with current and prospective employees. We can take a page from consumer marketing and create emotional connections between strategy and the workforce.
HR can also lead by understanding the impact of performance management, work-life balance and flexibility on culture and engagement. The way we work changes how we engage people. Today’s employees work more hours and are constantly connected through technology – as a result, flexibility, empowerment, development, and mobility all now play a big role in defining a company’s culture.
Organizational culture is top-of-mind for executives today. The speed of change and the competitive landscape means that organizations must align people to purpose in order to thrive. This presents an incredible opportunity for HR to “take the wheel” by playing an active role in shaping the workplace culture and having an enduring impact on business performance.
1Great Place to Work® Institute, “What are the benefits? The ROI on workplace culture,” http://www.greatplacetowork.com/our-approach/what-are-the-benefits-great-workplaces
2Deloitte, “Business needs to reset its purpose to attract Millennials, according to Deloitte’s annual survey,” press release, January 14, 2015, http://www2.deloitte.com/global/en/pages/about-deloitte/articles/2015-millennial-survey-press-release.html
3Deloitte, “Culture vs. employee engagement,” 2016, https://www2.deloitte.com/us/en/pages/human-capital/articles/culture-versus-employee-engagement-strategy.html
4Bersin, “Becoming irresistible: A new model for employee engagement,” January 2016, https://dupress.deloitte.com/dup-us-en/deloitte-review/issue-16/employee-engagement-strategies.html