Most titans of industry would agree that strategy and culture top the list of the most important pillars that drive organizational performance. They aren’t always viewed with equal weight, however.
For many leaders, business strategy is what led them to their jobs. The subject is a staple at business schools, and most of the other fundamental components of business — accounting, finance, marketing, advertising and operations — reside in the strategy sphere.
Organizational culture is a different story. Its academic study also has been in practice for some time, but culture can be difficult to focus on. Many major corporations with recognizably distinct cultures could attest to the positive contribution it can have on strategy, while others have a harder time. They don’t measure culture, they haven’t defined it and therefore they have yet to fully recognize its value.
Whether a company is looking to assess, define and shape its culture to drive performance, or trying to shift or change culture in the wake of poor business results, there are some areas — or “do’s and don’ts” — to pay attention to. The first set deals with broader elements of shaping culture; the second involves implementation.
Do lead from the top: Regardless of the situation, shaping culture must be a top-down initiative, said Linda Forte, senior vice president of business affairs and chief diversity officer for Comerica Bank. Without top executive-level involvement in planning culture, any change will fall flat, Forte said. Having culture initiatives ingrained in an organization’s annual plan and strategy is paramount.
Don’t declare victory too early: Just because an organization’s culture appears to be on the right path doesn’t mean the work is done, said Steve Pemberton, chief diversity officer of drugstore chain Walgreen Co. He said even companies with a strong cultural heritage need to be constantly evaluating what parts are positively contributing and where change is needed.
“Make certain you don’t confuse that initial aesthetic pull of the culture change with the actual work of instilling and driving culture,” he said. “Because invariably [that] is what you’re going to be measured on.”
Do have a compelling case linking culture to the business: For diversity leaders helping to reframe or change culture, there must be a direct tie to the business. This tie could be improved employee engagement and productivity — and thus a decline in turnover rates — or something with a more direct relationship to boosting revenues or cutting costs, said Mark Kaplan and Mason Donovan, managing partners of diversity and inclusion consulting firm The Dagoba Group and authors of The Inclusion Dividend: Why Investing in Diversity & Inclusion Pays Off.
“In some ways you could say it is job No. 1,” Kaplan said, because with the typical chief executive mired in day-to-day financial performance analysis, stock price and management in general, culture may not be visible unless there is a clear business connection.
Don’t assume one size fits all: To Kathy Hannan, a managing partner and national lead officer of diversity and corporate responsibility for professional services firm KPMG, every organization is on a different journey.
Whether a company is a startup trying to define the type of culture it would like to have or a large, established firm aiming to shift its core values, every approach will be different. Therefore, there is no off-the-shelf product or service that will magically solve problems or put a company on a cultural desired path, she said.
Do plan for the long haul: Shaping culture is not a one-year endeavor, said John Kotter, chief innovation officer at consulting firm Kotter International and an emeritus professor of leadership at Harvard Business School. This is especially true for companies that have been around for a while. The more values and norms have been institutionalized, the longer it may take to shape or change those values, he said.
Don’t dump culture change on HR or communications: Kotter also pointed out another broad misstep in shaping culture: “The CEO dumps it on the HR people and then goes away. It never works.” The same goes for the communications staff, Kotter said. “The group puts together a list of the values or the norms or how we should do things, and then they turn it over to the communications people, who tell people what their culture is. Never works.”
Do proactively shape culture: Some companies sit back and hope that culture will happen to them. David Casey, vice president of workforce strategies and chief diversity officer at drugstore chain CVS Caremark, said he would advise against doing nothing and assuming that culture is going to create itself.
Instead, set out core values, define any aspirational elements and then develop a plan to move forward. What behaviors does the company expect from its leaders? Why are these behaviors important? What actions or events have to happen for those behaviors to be altered long-term?
“It’s not enough to put posters on the wall with core values and a mission statement,” Casey said. “You have to really understand how people show up every day in the workplace.”
In the Trenches
Do lead by example: Leaders with cultural problems often pronounce a new set of cultural values only to exhibit behaviors that don’t align with them. In other words, when it comes to changing and shaping organizational culture, talk is cheap. Actions are the heart of culture.
“That’s how culture is developed in the first place,” Kotter said. “It’s not because one day the [leader] set up a banner that [said] this is our culture. It’s because they did things a certain way that maybe was driven by how he thought the world should work — and it worked.”
Don’t let events define culture change: Events built around culture should not be overly emphasized or a sole focus; instead, target strategy and the business case, said The Dagoba Group’s Kaplan and Donovan.
Events still play a role, but becoming too reliant on building events around culture change without a clear link to business strategy and non-event initiatives isn’t effective and sustainable.
Do build a culture of recognition: As workplace values evolve, it isn’t enough to compensate employees financially. Creating a culture where recognition is a core component can improve engagement, retention and productivity, said Murat Philippe, director of workforce consulting services at Avatar Solutions, a performance improvement consultancy.
But recognition, Philippe said, comes in all sizes, and different employee groups may prefer to receive it in different ways. For instance, some groups prefer to be recognized for their work in front of peers; others prefer to receive positive feedback or rewards in private.
Don’t ignore the benefits of technology: With the proliferation of technology — particularly social media and mobile devices — organizations would be foolish to ignore these tools when it comes to culture, Philippe said.
Specifically, he said tools such as Facebook, Twitter, LinkedIn and other social media are great for culture because they act as a channel to build the company’s story for employees. Using social media to share a company’s success story shouldn’t just be for internal use in shaping culture, Philippe said, but it could be used to promote brand recognition to customers and external stakeholders.
Do promote flexibility: To the extent an organization’s business makeup will allow, it’s important to build a culture where employee flexibility is valued, said Charlotte Hawthorne, manager of global diversity and inclusion at Indianapolis-based pharmaceutical company Eli Lilly & Co.
Work-life balance is a differentiator in recruiting. Companies that enable their employees to get their work done and balance their own schedules — within reason — are going to have an edge, Hawthorne said. But don’t confuse flexwork with telework. Eli Lilly offers employees the option to come and go from the office or work at home a day here and there as long as it coincides with meetings and other team obligations.
The idea is to give employees the opportunity to complete their work when they are most productive, as long as their manager approves. This doesn’t mean every company must have a comparable flexible work program. Yahoo drew fire from telework proponents earlier this year for shuttering its work from home arrangements — a move largely attributed to changing culture in an effort to turn the company around.
Still, Hawthorne said companies should remain open to the concept. “Anything that we need to do to focus on helping people be their most productive, their most innovative, that’s what the culture has to support,” she said.
Deloitte’s Culture Center
Professional services firm Deloitte LLP made a huge investment in its culture in 2009 when it broke ground on Deloitte University (DU), a massive learning and development complex in Westlake, Texas.
The $300 million, 800-room facility, which opened in 2011, has grown into an epicenter for the company. Deloitte’s goal is to have new hires on campus within the first 90 days. Deb DeHaas, Deloitte’s chief inclusion officer, said most new employees find their way there within 30 days to take part in a host of on-boarding activities.
In March, Deloitte added a new facet to the complex: The Deloitte University Leadership Center for Inclusion. Through the inclusion center Deloitte aims to change the inclusion conversation by engaging thought leaders, clients, business leaders and its own consultants and employees. DeHaas said the inclusion center, as well as DU in general, is a major cultural driver for the company.
First, the center supports Deloitte’s culture of promoting authenticity. “We have developed a campaign around sharing your story,” DeHaas said, “We have a series of our leaders who have developed a series of videos where you can hear our chairman share his story and why Deloitte’s inclusive culture has been helpful and important to him being successful.”
Although DU is viewed as a major component in Deloitte’s efforts to build its culture, DeHaas said having a corporate university or center for inclusion isn’t a necessity. “I don’t think it’s a must,” she said, “but I do think there are enormous benefits that come out of it.”
What makes DU most valuable in terms of culture, DeHaas said, isn’t the physical space. It’s the consultants and senior executives within the company who teach and participate in the content.