“It’s depressing to think that company culture is still seen as a ‘soft’ area of corporate life. Culture is everything: it dictates both the behaviour of those in leadership and the wider employee base” (Eugenio Pirri – Chief People & Culture Officer at the Dorchester Collection)
In recent study results from Mercer, there is confirmation that companies with strong cultures perform better. Mercer analysed Glassdoor feedback from 75 000 current and former employees who were asked to rate their employer’s culture – businesses that scored well tended to be team-oriented and stand by their values. The research found that while company culture can create value – chiefly through attracting and developing talent – the reverse is not true: high performance cannot create better cultures. Sophie Black, partner of executive rewards at Mercer, notes: “Our research has shown that companies with problematic cultures can still perform well. We do know, however, that companies with bad cultures tend to be less adaptable to the economic climate and poor practices mean that they tend not to be sustainable”.
The development of thriving corporate cultures in the 21st Century requires leadership systems that are agile and able to accommodate the onslaught of:
- Disruption – unprecedented levels and rates of change
- New expectations regarding management – challenges to the way we lead
- Shifts in competitive strategy – away from efficient management and tangible assets in manufacturing environments to knowledge management and innovation
- Demands to dismantle hierarchy – the expectation of leadership practices being utilised at all levels in organisations
- New approaches to job roles – shifting away from creating jobs to meet the needs of leaders to roles that meet the needs of customers
Much time, effort and money has been spent on developing leaders, looking at leadership styles and ways of being, developing skills and giving leaders tools to operate effectively and efficiently in challenging circumstances, but very little comparatively has been invested in deep consideration of the environment in which a leader should lead. In other words, leaders are taught to engage, listen to, collaborate with, involve and empower their teams, but have little support in how to create a system to support these new ways of working. They thus return with their new skills back to their old environment which still supports and reinforces the old ways of working.
Monique Jordan, Director: Organisational Change Management at Pearson, to counter the above problem, suggests a more systemic approach to all that influences effective leadership – systems, structure and culture. This is not about simply behaving in a specific way as a leader, but rather building a way of working and culture that reflects and reinforces the value of others – a system so designed that consistently nets the desired outcomes, whether the leader is directly involved or not. Jordan suggests a leadership system with four dimensions to reach the goal of an adaptive organisation (one that supports rather than eradicates new ways of leading):
- 21st Century Leadership – this focuses on clarifying the role and expectations of leadership and its goal in creating organisations where engaged people innovate and inspire change (unlike the old model of command and control). Monique notes that leaders act as ‘thought partners’ rather than isolated heroes, presenting challenges and asking provoking questions that reveal assumptions and challenge deeply-held beliefs, creating the capacity to ‘think outside the box’. Leadership thus becomes a shared responsibility.
- Leader Role – this includes anyone, whether they are leading a small team or the entire organisation. Here, work is done on the capability to inspire and influence others – increasing the leader’s emotional intelligence and helping the leader draw on individual strengths to execute effectively.
- Environment – creating the conditions for success. Starting with and basing all on the strategy map and organisational values, environmental capacity is created by ensuring that there is common awareness and focus on achievable goals, role clarity and role distinction (for accountability around contribution and the value that this adds to teams) and measurement systems that provide feedback in a way that engenders action.
- Engagement – understanding and creating the psychological conditions that give rise to:
- Meaningfulness – personal value gained through applied effort
- Safety – free from fear and clarity around behavioural consequences
- Availability – knowledge, skills, ability and confidence to deliver on commitments
With leaders seeing themselves as ‘thinking partners’ within the business and adopting a deliberate approach of designing an environment around the dignity, value and contribution of all, empowerment, and subsequently an adaptive organisation, become a possibility. This corporate culture will exist without you being present.