Everyone know what good culture or toxic "feels" like. You don't really measure culture .. you feel it. It transmits like a virus. Culture is a greater predictor or organisational success and survival than strategy. Strategy is HOW you win, culture is WHY.
The tricky part is that culture is laid down over time my a succession of bosses, lead teams, and management decisions that get institutionalised, codified, and into things like policies. It may not be just about the latest or the last CEO. It pervades everything.
Interesting to see many good people I worked with on the stand at the Royal Commission into banking culture. Every one a genuinely good person. However ... stuff went on deeper in the Company that should not have. People in the 4-5 levels between those on the stand and those that did bad stuff seemed unable to provide a collective voice.
It comes down to what actually really happens if you speak up and potentially embarrass people one or two levels above you: Its usually about fear of small recriminations more than big but then these start to add up and compound. Fear is toxic.
Fear kills achieving, open, warm, supportive, constructive, transparent, inclusive, participative, safe culture (how everyone likes it) and replaces it with the opposite.
That first kind of culture is built in the open in public and killed in the dark. HR is often complicit either inadvertently or not. HR people should never go into "that room" unless they are 100% of a few things or else they will themselves become to be associated with bad things happening to good people. Some of the few things are:-
a. We are not punishing an actual person for what is really a systemic failure
b. That the Manager has done their very best to try to address the concerns WITH the person (or else the Manager is the issue). If we have not tried to help we should go back to step 1.
c. That any person does not feel ganged up on (HR should be on BOTH sides)
d. That use of sanctions in the workplace should be a last resort because it rips at the fabric of relationships - the stuff that hold culture together. Carrots are better than sticks, and communication beats both.
The worst culture's are where HR itself is captive to special interests and power, and itself loses the ability to speak up freely. Great HR people can walk fine lines because they are often handling explosives.
The truth is that people won't speak up if there entire income is at stake even in a small way: So they don't take a small risk ... and in the end the whole organisation takes a big one with its most important asset - its social license and its trust with its own people.
Both are slow to build up and fast to lose.
Any attempt to address culture should be simple:
What culture do you want? The starting point should be envisioning where you want to end up. Ideally this process is broad and inclusive and informed by strategy (EG: Customer service). It is no different from setting any other planning except it should be more facilitated and democratic (you want buy-in as an outcome) than formulated, and it provides a consistent framework for making trade-offs later (such as control Vs freedom). This means values, vision, mission, and team charter. I love what Netflix did!
Long term. Culture is not something you erect in a financial year, it is an incremental process, built over time and very dependent on the CEO but the whole exec team must walk the talk, every day. The CFO is also crucial because the CFO can influence short term choices as a result of current business conditions - fine balancing required or cynicism will prevail if, for example, we are too quick to cut jobs for short term reasons.
Measurement? I personally like tools that have robust validity and reliability and are statistically solid with large normative data-bases. Many people in exec positions are 'facts people" not "warm and fluffy" so a robust measure is useful. Since such "big measurement" is expensive, and culture is long term, you cannot sensibly take the measurement more than around every 18 months or so.
Using a Pulse Dashboard is a good addition to the monitoring regime:-
Employee referrals and sales leads.
Customer complaint responses.
Employee turnover, and rehires.
Employee exit surveys.
Employee Pulse Survey.
Supplier survey.
Employee Net promoter Score.
The ‘carpark’ test.
I don't like to use any KPI's for bonuses, especially culture. All KPI's can be "gamed". CBA Staff talked about "5 to stay alive" - meaning they all gave each other good ratings because they were measured and rewarded as such. Bonuses are better tied to actual outcomes like profit and sales rather than KPI's.
Call me if I can elaborate on any of the above. https://www.cormackconsulting.org
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