29 Mar 2016
" All leaders share responsibility and accountability for their organisation's culture and therefore must be in tune to prevent potential breaches."
Katie Lahey, Executive Chairman of Korn Ferry Australasia
For corporate leaders, identifying a potential breach of culture is challenging because touch points tend to be structured and contained to their own teams. But according to research by Korn Ferry in consultation with senior executives and directors, all leaders share responsibility and accountability for their organisation's culture - and must be in tune.
Below are 10 checks companies can use to get a strong understanding of culture and avert harm.
The appointment of a CEO will determine the culture of the organisation. Candidate assessments should explore character along with previous experience and reputation.
A 'god-like' CEO should set off warning bells. Command and control is out, bringing people on the journey is in. How the CEO values and demonstrates culture should be a key performance indicator.
Do you know the kind of culture required to drive the strategy of your organisation and was the strategy created in the context of culture? Is culture enmeshed in how the organisation goes about achieving its goals? Is it measured?
The answer to all these questions should be yes.
Is the executive team accessible to people at lower levels? Look for hierarchical clues pointing to a closed door at executive level. Does the organisation have a diverse executive team? When an executive team looks the same, chances are they will think the same.
Diversity of gender, ethnicity, experience, education and ideas is good for culture, performance and governance.
Start talking about culture to fellow leaders, the CEO, executives and employees. Can they articulate it? Is everyone on the same cultural page?
This is not about reciting values, it is about knowing the hard-wiring of the organisation. Try to meet employees in diverse roles and ask them what they think works well and what doesn't.
If your intuition tells you something isn't quite right, explore it and see where it takes you. It may be nothing. Or it may be your years of experience telling you there is a problem.
Is there a formal whistle-blower program? What is the process when an employee needs to speak up? Most importantly, how are whistle-blowers treated?
Ensure you have access to whistle-blower reports and that you are aware of the process.
Subcultures can be difficult to identify and challenging to change, particularly if toxic subcultures are thriving in high-performing parts of the business.
They can derail your entire strategy and must be disrupted, even when it results in financial loss. Commitment to culture is also measured by what you say no to.
Look for inconsistencies in media reporting between what you read and what you know. Social media sites such as Facebook and Twitter reveal much about the supply chain, customer service and brand awareness. Follow the company on your social media platforms and closely review social-media monitoring reports.
Phone the call centre, make an inquiry, visit a shop. Experiencing the organisation as a customer will reveal things about the culture you may not learn in your normal leadership role.
Be forensic in your review of employee engagement surveys and HR data. Red flags will show where there are consistent issues every year, where there is low morale, high turnover or pockets in the organisation where results are at odds with the overall picture.
How can culture be strengthened?
The Korn Ferry Institute interviewed 13 business leaders who serve on boards in Australia to gain their insights on the strengths and weaknesses in organisational culture.
We sought to understand where these leaders think responsibility for culture belongs and how boards and executives can work together to ensure that the culture set at the top permeates throughout an organisation.
Below are the areas of greatest importance when it comes to a strong culture nominated by these leaders.
Are the reward systems at your company financially driven, behaviour driven or both? Who is valued more—the sales executive who exceeded targets during a recession or the employee who revealed there was a breach of culture that could have hurt the brand?
People's behaviour will directly correlate to what is most valued and rewarded.
Katie Lahey is Executive Chairman of Korn Ferry Australasia
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
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