dotShift: From whence the culture cometh?

Robin Cole-Hamilton asked a question on LinkedIn about HR's role in developing corporate culture - whether it should lead or support.

"An HR department not far from me feels that it should be playing the lead role in building an organization's corporate culture. I take an opposite view, feeling that the culture should derive directly from leaders and teams, and (frankly) that when HR is in the driving seat it (the culture thing) usually becomes mechanical, impersonal, and uninspiring. Culture by numbers, in fact."

I agree with Robin, and have been thinking more about this issue of late due to developments in our business (a rapidly-growing software start-up). Particularly in the US, the HR department is about compliance and risk mitigation, not about culture and values. Regardless, if any culture is to be real and authentic rather than than theoretical, it needs to be thought of as the sum of the collective actions of the organization rather than a prescription.

As such, the leadership of the organization need to embody the culture they are trying to create, and build the organization by recruiting people who also subscribe to the same values. Ultimately it is the inspiration provided by the leaders that encourage the team to take part in and actively shape a culture. The team are then the cause of the culture being a permanent, albeit dynamic, force.

Hand-in-hand is the workplace that is created for this force to flourish - or die - in.

The rigid, controlling workplaces of the past left employees no flexibility to manage family or personal problems or the day-to-day demands of running a household. Over time, those unmet personal needs erode concentration, commitment and creativity on the job. Good workplace policies, on the other hand, enable employees to manage their larger lives, freeing them to apply more brainpower to complex Information Age jobs. Satisfied employees treat customers better, creating loyal customers. Beyond that, good policies also foster the kind of on-the-job relationships with bosses and co-workers that inspire employees to grow.

This isn't just touchy-feely rubbish; real change in the workplace leads to real satisfaction among employees leads to real money for the company.

Amid mounting anecdotal evidence of the bottom-line benefits of employee well-being, researchers have undertaken systematic attempts to show a linkage between employee engagement and above-average customer service, sales and profit. The Wall Street Journal cites several research paper and has anecdotal evidence supporting this thinking (see the online article The Rules of Engagement). In 2004, Hewitt Associates, tracked about 300 companies over five years, and found that increases in employee engagement clearly preceded improvements in financial performance. Even among companies with below-average profit, an upturn in employee attitudes tended to precede a profit turnaround.

With this understanding, we need to create a workplace conducive to the behavior we want to see, but again it comes down to the people we have in the organization. In the mid-1990s the Gallup Organization discovered that no organization - large or small - has a single culture. Instead, it has as many cultures as it has workgroups, managers, or supervisors. The locus of culture is at the local level, where 5, 10, or more people work together every day.

Although many of you may be nodding in agreement at this notion, having seen it yourselves, it is a dramatic shift in how many leaders perceived corporate culture and how to manage it. Leaders have long understood that they have very little control over the culture that exists at the local level, but this discovery made it imperative that they find the best managers and supervisors to build a high-performing culture - one employee, or one conversation, at a time. Executives cannot legislate culture with mission or vision statements or through values clarification; it must also grow organically one workgroup at a time.

Having a high-performing business culture is a competitive advantage today. Most companies expect every employee to be a builder, because every employee, through his or her actions, either makes the culture stronger or weakens it. Employees, in turn, want to be proud of their organizations and local teams. And, in many countries today, the employer needs the employee more than the other way around. As the world shifts from an industrial to a knowledge-based economy - and as employees are increasingly valued for what they know as much as for what they produce - the employer’s power has diminished or evaporated.

So how do we manage people for success and high levels of productivity in the new economy? Too many organizations build management models on the assumption that managers and leaders have the power in the company/employee relationship, but that’s no longer always the case. The answer is employee engagement or the ability to capture the heads, hearts, and souls of your employees to instill an intrinsic desire and passion for excellence. Engaged employees want their organization to succeed because they feel connected emotionally, socially, and even spiritually to its mission, vision, and purpose.

This culture by definition is real, rather than theoretical. There is some excellent discourse on this topic in the book Human Sigma; one I encourage any executive to read.

Comments

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I'm delighted to see that my question has prompted a musing. Hope the start-up is going well. Regards. Robin

Posted by: Robin Cole-Hamilton | February 18, 2008 at 09:46 AM

We do indeed have a no shoes policy.Guests are advised in advance to bring their slippers if they choose.I grew up in Canada where lines of shoes and slippers by the door was the norm.

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Posted by: America | September 03, 2010 at 06:21 PM