We recently had the pleasure of co-hosting three Global HR Leader Networking sessions with close friends of ChapmanCG; Campari, MetLife and Sotheby’s. Attendees were global HR leaders from top multinational organizations. Our topic of discussion was the Best Practices in Organizational Culture Change, a valued focal point for our co-hosts, attendees, and the broader HR and business community.
Each session featured a robust discussion, with the recurring theme and a consensus among many of the participants of the challenges HR professionals and companies face in driving culture change. The one resounding message was that building and maintaining a healthy culture is a constant journey. Whether a company is mastering the art of a positive culture (or is in constant pursuit of one), culture is on the forefront of HR leaders’ minds everywhere. As important as the discussion itself were the practical solutions and ideas offered by the experienced HR minds gathered. Below are the most powerful take-aways shared:
1. Exposing the Current Culture and Building a Platform for Change
Exposing the Current Culture
Before driving change, we need to know what needs to be changed—if anything. Culture is often seen as the secret sauce to an organization’s success and is therefore guarded carefully. It can also be highly revealing when exposed and therefore uncomfortable to confront. As a group, we discussed ways of softening this hard landing. We often mirror the behavior of others to feel like part of a culture and to gain a sense of belonging. This in itself can be detrimental to change, as we are effectively replicating and rewarding the behaviors of a culture we wish to transform. To shed light on these nuances, some HR leaders have gone as far as using interactive theater companies to demonstrate current culture norms and sharing role play situations, many of which brought cringeworthy responses of authenticity from the leadership audience. HR can play a lead role in identifying behaviors which an organization values and wishes to keep, and those that may well be a barrier to talent attraction, inclusion, and progression. What we found is that the delivery method of this message is the key to exposing culture, and itself can be that catalyst for change.
Leading from the Front
Top down leadership and buy-in to culture change is critical for initiatives and programs to gain traction and succeed. As above, we often mirror what is deemed to be successful and this includes actions, the words we use, and the value we place on things. If we see our revered leaders or high performers leading from the front and driving a consistent message on culture change, then it becomes part of the fabric of an organization, its DNA. Organizations where the CEO and other executives actually live the values and mission and share their experiences bring energy to a workforce and set the example. HR can help give these leaders the platform, be it physical or through technology, to share these messages with the employee population.
The most successful HR approaches tie in analytics and engagement scores, demonstrating an improvement in performance and productivity of the employee base. Simply put it must show a return on investment to be deemed valuable. Engaging and educating the Board on the state of company culture, the impact it has to the bottom line and revenue is key, and we will see a rise in talent analytics aimed at proving this. What we want to be able to do is measure where we are, evaluate against milestones as we progress, and finally assess the ROI.
2. Mobilizing and Engaging Employees
Create Space and Opportunity for Cultural Ambassadors and Champions to Rise
Establishing employee resource groups; focus groups; or people and culture committees can be a powerful way to engage employees who you know have the ability and talent to spearhead culture initiatives. The make-up of these groups should ideally be representative of the whole organization, including people at different managerial levels and from differing functions and business lines.
The Power of Discretionary Effort
Organizations such as Novartis have found that the true power of these groups is realized by making participation fully discretionary. Those who volunteer and demonstrate a genuine passion for culture change and commit more of their non-working hours to these initiatives really move the needle. If people volunteer their time there is no cost for it—as opposed to people being “enlisted” by the company, then taking hours out of their normal workday and out of their jobs.
Employees can come from all levels, and it is crucial they get no steering from leaders while they are developing solutions.
Engaging the “Frozen Middle”
Engaging ‘the frozen middle’ is essential when looking to move the culture needle. Believing that culture is influenced from both the top-down and bottom-up empowers employees across an organization. Inertia often occurs at the level of middle management with the demands of leaders and time commitments of team members often taken priority over what can be seen as ‘another great idea by management’. Bringing this critical layer of leadership along and enabling them to see the value in prioritizing these initiatives—having them lead where appropriate, perhaps rotating this responsibility across functions and business lines—has been seen to drive engagement and reduce the risk of a bottleneck.
To unfreeze the middle, we need to look at how to insert influencers from outside of this group, and they can come from sometimes surprising parts of an organization. We discussed how technology is being used to identify and analyze heat maps of sorts, identifying which individuals are champions of the culture based on frequency of communication and action in this area. This can reveal who is actively moving the needle.
You will find these individuals by to assessing their input and engagement in employee groups, people committees, hackathons, disruption, think tanks, etc. — every organization has these people. Harness their passion and positivity to invigorate the stagnant parts of the organization, bringing them to life.
3. Building the Strategic Plan for Change
Purpose is Critical
Culture change often requires a catalyst. Something that helps us draw a line in the sand and a clear understanding of what that inflection point is. We were delighted to have MetLife share with us that two key inflection points for the company has been a CEO transition and its 150th year anniversary. It gave the organization the chance to step back and ask themselves some fundamental questions which will shape the culture of the company for the next 150 years. The linchpin to all of this was defined as Purpose – “Why do we do what we do? What do we aspire to be? What is our vision?” They defined Purpose as the “Heart”, the mission, strategy and objectives as to how they will get there as the “Head” and the values, behaviors and operating model that will need to be built upon or transformed or evolved as the “Hands”. Having a clear direction, a roadmap of sorts, and subsequently building a consensus on purpose, not only creates a movement and a badge of honor to be worn with pride, but also enables an organization to measure ongoing success against agreed deliverables or timeframes. Purpose really is central to engagement, and engagement is essential to drive culture change.
“Purpose is not an add-on, it’s not an initiative. It is a culture change and it never finishes.”
There has been steady movement by many organizations to become more consumer- rather than product- focused, and this has had a very positive impact on culture. In previous articles, we looked at Microsoft’s findings of how reflecting customer feedback by allowing greater internal feedback loops and freedoms around constructive dialogue has helped create a powerful and attractive collective singular vision. Our findings here were no different. Enabling the energy of the company to reflect its consumer practices helped to engage leaders in what was referred to as “leader activation sessions”, a platform being used in some companies to keep senior level management actively engaged and educated on their organization’s culture.
It’s Not Always Recommended to Have One Consistent Culture
Think about highly acquisitive companies who are selecting targets based on their ability to bring something new and add value to an organization. What often makes companies a success? It’s culture and ways of working. Why would we want to disrupt that by demanding a “one size fits all” approach? Multiple cultures can coexist and bring new diverse ideas to bear which in turn make for a much more inclusive culture all round. It’s important to look at the strengths of each company’s culture and combine them where you can, allowing both legacy culture and new ownership culture to come together in a united front. Perhaps create space for culture ambassadors within each newly acquired business and allow them to meet and form a “Culture Committee”, sharing and valuing differences and also identifying commonalities where possible.
Spread the Risk Using Periods of Change
One thing remains true: change is constant, and those that adapt the fastest will outperform their competition. Change at the top of an organization can be disastrous to driving a longer-term culture strategy. Sponsorship, influence, and buy-in can all disappear with a changing of the guard. Successful companies have therefore spread this operational or culture risk across the organization, having champions existing at all levels and across all functions who are able to pick up the baton even through seismic transformations.
De-Layer to Achieve Greater Communication Flow
Flattening out structures has in many cases been an enabler to culture change. Reducing layers of management which may propagate hierarchical decision-making practices and impact speed of information flow (and consequently feedback from the employee base) has seen some success. Reducing hierarchy also encourages the placement of career management into the hands of the individual and by doing so creating a culture of self-determination, openness and sharing. This approach is most easily adopted in mid-to-small sized organizations.
4. Implementing the Plan
The Physical Workspace
Campari takes a “spirited” approach to culture and has built a state-of-the-art office in Bryant Park that offers open workspaces, no assigned seating, and encourages free-flowing collaboration between employees. Culture defines their hiring process and takes center stage as they look to build a world-class team while keeping a watchful eye on mobility and retention.
Campari (and others) have leapt into breaking down silos and creating “open spaces” to foster greater interaction between functions whose teams may have previously only met in passing at the cafeteria or in the elevator. We all need a nudge out of our comfort zones sometimes and promoting an organization-wide approach to foster greater collaboration and wearing it as a badge of honor has in some cases produced great results. This is not an inexpensive approach, however; but done well with a set-up which exudes the core values, behaviors, and purpose of the organization is a sight to behold and a powerful indication of just how serious a company is about having culture at its core.
In June 2019, Crains New York voted Campari as the Coolest Office in New York.
Stirring the Pot with External Hires
To keep a culture evolving, it’s often good to invite innovation and a refresh of a culture by bringing in new people, new ideas, and new methods. Successful companies are demonstrating an evolution in culture by attracting and hiring external talent which creates a culture of diversity of thought and experience. A common challenge that companies face is the inability to move tenured talent out of an organization to make room for new ideas, and by extension, an evolution of culture.
The Culture Interview
Campari and other companies have gone one step further in promoting the importance of cultural fit for prospective hires: they have reengineered the interview process to include a separate culture interview, one which may be performed by an employee from a very different part of the organization, but who has a strong understanding of established values and behaviors. It sends a clear message that “we’re all in it together” and value the inputs of employees across the enterprise. It also enables candidates to probe in more detail about non-technical aspects of a role and some space to really understand the company, as opposed to trying to get everything into a one-hour time slot where the focus is to impress.
It is important, however, that we do not stop there—a carefully thought out and monitored process of engaging talent acquisition teams and hiring managers, from the first point of contact with prospective candidates, through new employee onboarding, plays a large role in impacting and fostering a positive culture. It takes time to really feel part of a culture, so those early weeks and months are critical. Increasing the frequency of interactions with cultural ambassadors during this time may help to assess whether the fit really is there and if the purpose, mission and values of the organization are beginning to be lived by a new hire.
Creating a Culture of Opportunity by Promoting Mobility
Organizations that have demonstrated a proven track record of mobility across functions, business lines, and regions have been held up as having great cultures. A good action point could be to send cultural ambassadors to drive change in parts of the organization where bottlenecks occur and resistance to change is high. This practice is also a more natural way to ensure greater diversity of thought and experience in previously homogeneous groups This could, however, create a false perception and one HR leaders need to be aware of, as mobility is but one tool to be used along other initiatives. It doesn’t always equate to a high-performing culture just by itself.
5. Communicating the Plan
Communication Has Been, and Will Always Be, King
No matter how much data is collected, employee surveys recorded, or strategies compiled, consistent and clear communication across the organization is always the best tool to use and focus on to drive a culture transformation effort. Allowing feedback loops and establishing platforms to test the pulse of an organization on proposed changes is critical. The very act of creating a platform has been shown to drive shifts in behaviors and allow a more open culture but be careful not to create a forum of “great, we now have somewhere to air our grievances”.
By no means is changing culture easy—in fact, changing culture is difficult and uncomfortable. As Lou Gerstner, former CEO of IBM wrote, “The hardest part of a business transformation is changing the culture—the mindset and instincts of the people in the company”. The ability to define culture through purpose, values and behaviors, develop and empower culture ambassadors, and communicate a consistent message in the face of an ever-changing marketplace is extremely tough and requires a real team effort. The first steps appear to be understanding who you are, and what you want to achieve as an organization, and build from that base.
We are always grateful and thank each of those who attended and participated in these sessions. The sharing of experiences and insights reminds us all of the importance and value that a healthy culture brings to a company.
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