As recent cases involving Uber and Volkswagen demonstrate, having an open, healthy corporate culture is an essential part of business success. Widespread complaints of sexual harassment and bullying at the ride-hailing company have led to the departure of CEO Travis Kalanick and a reported 15% drop in US market share, while the emissions scandal at VW saw its share price fall by 50%. A culture that allows poor behaviour, either tacitly or explicitly, will hit customer loyalty, company valuation, staff retention and the overall bottom line.
These high-profile cases show that the potential for reputational damage is very real and can constitute an existential threat. Equally threatening in the longer term however are ossified cultures that are incapable of reacting to a rapidly changing market place and customer expectations, gradually rendering them obsolete. By contrast open cultures that support collaboration, innovation and engagement have the agility to react to this changing business environment. What’s more, they can also act as a magnet for attracting and retaining talent.
Driving this adaptive culture change in large, multinational or fast-growing businesses can be challenging, especially against a backdrop of changing regulations, digital transformation or the entrance of new rivals in previously stable markets.
Adding to the difficulty, for many culture is still a nebulous concept that can appear hard to quantify and measure. So how can you ensure your culture is right and aligned with your strategy across the organisation? Here are three areas to focus on:
1. Continually check the cultural fit with your strategy and values
The first step to ensuring that your culture is aligned is to understand where you are now, and clearly define where you need to be in order to fully realise your business objectives. In other words, the development of real cultural self-awareness at all levels. This requires the development of a consistent conceptual model and vocabulary to describe culture and the behaviours that exemplify it. It also requires a robust diagnostic to assess to current culture and progress towards a desired state. Central to this is an open, ongoing dialogue with employees, from recruitment onwards focused on what the desired culture means for everyone in terms of what they do and how they do it. This cannot be a one-off process, and has to be more frequent that the annual employee survey. By making it simple to gather structured and unstructured feedback from staff you gain the insight you need to spot misalignment between strategy, values and the reality of everyday behaviours.
2. Identify and share best practices
Collecting feedback on its own is not enough – it needs to be easy for everyone to understand the insight it provides, and available quickly enough that they can take action. Providing managers with user-friendly, real-time dashboards allows them to track alignment and cultural fit over time and crucially, visualise the relationship between culture and performance whether it is at the team, department or a wider level. Companies then need to close the feedback loop, solving any problems by sharing best practice across the organisation so that issues can be overcome in a rapid and consistent manner. This will underpin greater cultural alignment as well as helping ensure that culture change projects succeed.
3. Provide the ability for staff to proactively contribute to success
An open culture encourages employees to share any ideas or concerns they may have, without fear of retribution. In many cases using techniques such as always-on feedback and online communities will enable staff to publicly provide comments and suggestions for improvement. However, for more serious matters it is imperative to allow them to raise concerns around areas such as unethical or illegal behaviour and bullying and harassment in a way that keeps information confidential while investigations are undertaken. Therefore, companies should have clear processes and systems in place that give staff confidence that their voice is being listened to – and where necessary, their identity protected. This helps organisations to track down activities that undermine an open culture and take immediate action. Otherwise, as Uber found, staff are likely to go public if they feel they are not being listened to or their feedback acted upon.
Culture has risen up the executive priority list, as more and more CEOs understand the impact it can have on the success of their business. Building an open, transparent feedback culture is central to organisational effectiveness, retention of key talent and driving company growth. The tools are there to allow it to be quantified and measured, and action taken to ensure fit between reality and strategic goals. As prominent cases show, now is the time to take culture seriously if you want to create a successful, sustainable high-performance organisation.
