Earlier in the year I was discussing the subject of corporate culture and the role of boards with my business partner in the US, Mark Herbert – this is a particular hot button for both of us and discussing cross border challenges and perspective’s can create great discussion.
I shared a culture program with Mark that was executed some 12 years ago and importantly the outcomes, Mark commented that this program was way ahead of its time even today, so I commented so what was the problem with adoption 12 years ago and what is the attributed cost to business today of company’s that still reject corporate or company culture?
Mark commented; ‘If values are to be more than just words on a poster they need to be translated into a set of expected behaviours that are meaningful to the company and those who work there.’
Culture is much more about people than it is about rules. Codes of conduct are a baseline; a culture is created by what you do rather than what you say. The alignment and consistency of behaviours of leaders, and how they communicate through words and actions is the essential starting point.
Large organisations, particularly those with global reach, will have sub-cultures which can reflect different geographies, business units and remits. Nevertheless it is realistic to aspire to a common set of expected behaviours based on company purpose and values.
Human resources (HR) has an important role to play in embedding the values in the business. Where there is a separate ethics and/or compliance function the effectiveness is enhanced through close collaboration with HR. Aligning HR policies and processes with the values is a critical step in driving culture. There is a duty to invest in building HR and a people management strategy and capability which focuses on leadership and management culture, and embedding cultural values across all levels of the organisation. The board must work closely with the HR function to create the appropriate organisational culture through aligned strategic human resources management practices, from recruitment, induction, training initiatives, leadership development, performance management resourcing and succession.’
The challenge for boards is how to coordinate across the organisation and build a holistic approach to addressing culture. One large UK bank has recently tasked a number of its business divisions to work together to provide a single report of cultural indicators to the board. The individual functions each track many different data points in relation to behaviour and culture across the bank. Discussion at the board is focussed on a small number of the most meaningful measures that provide crucial insight and can be tracked over time. The chairman is confident this is a significant step in helping the board perform its role in seeking assurance on culture.
Those boards reporting that values, behaviours and culture were rarely discussed, explained that company culture is intrinsic and expected behaviours are understood by all and do not need to be articulated. This may be a result of a long established culture, a sense of complacency or a reluctance to address the subject because it is perceived as difficult to pin down.
Recent research shows that cultivating speak up and whistleblowing policies can lead to an increased level of trust within organisations. Trust is key in influencing the culture of a business. One way to increase trust is through the continuous development of visible policies to encourage transparency around possible bad practice.
This means developing collaborative policies that allow people to speak up, a well-organised set of procedures and an effective system of response to concerns that arise.
Also critical to success is the independence of channels through which whistleblowing information flows. Issues that can affect this include anonymity, the seriousness with which management treat those who speak up and legal issues.
When communication channels are developed effectively, evidence shows that speaking up becomes more engrained in the organisational culture. Measuring the effectiveness of a whistleblowing policy can also be useful to boards in assessing how effectively a culture is embedded.
A healthy ‘speak up’ culture breaks down the barriers than can often exist between the workforce and the board. External publication of the data can also give investors confidence that a genuine culture of openness exists and where it does not that the board knows about it. Demonstrating how the policy is working can also inspire employees to speak up in other ways and the culture becomes self-reinforcing.
Here are 4 basic tips for bringing your values to life:
1. Put values front and center.
It can be easy to lose sight of company values when focused on the task at hand. Values should guide all aspects of business, from the decisions we make to the talent we source to the way we interact with customers. Values cannot be applied if they are not embedded .
2. Hire based on values.
Building a workforce that lives and works by the company moral code starts with hiring based upon values. For each of the company’s values, develop a list of questions designed to assess a candidate’s character and potential fit.
3. Work (and play) by values.
The best way to bring organizational values to life is to model them. In other words, do not just let them sit on the wall and call it a day. Live, work and play by them on a daily basis.
4. Reward and promote values.
Last, but certainly not least, promote organisational values by rewarding behaviors that demonstrate them. Do not hesitate to publicly reward someone for exhibiting behaviors that are in line with the company’s character. Not only does this make the individual feel good, it also pushes the rest of the company to follow suit.
Finally, defining specific, behavioral examples helps clarify the intention of each value. For instance, a team value of “service excellence” can be interpreted in many ways: Is the customer always right? Do we provide excellent service at any cost? Do we serve external customers before internal customers? Are inquiries answered within an hour, a day, or a week?
If you really want your values to stick with your team, involve team members in the process of clarifying the values. People are committed to what they help create, so let them interpret the values and define behaviors (within your acceptable boundaries).
Facilitate this by asking these four questions:
1. What do our team values mean to you?
2. How do these values make you feel?
3. What specific behaviors do you think best demonstrate these values?
4. What could you do differently to better reflect these values in your work?
In answering these questions, your team will express specific behaviors that will bring your values to life!
As Laura Schlessinger once said:
“Values are principles and ideas that bring meaning to the seemingly mundane experience of life. A meaningful life that ultimately brings happiness and pride requires you to respond to temptations as well as challenges with honor, dignity, and courage.”