Not since the term first emerged in the 1980s has there been so much discussion of organizational culture. Considering that discussions of culture on investor calls have increased 12 percent in the past year, it’s not surprising that heads of HR are keen to get this challenge right. When CEB, now Gartner, brought together 20 heads of HR in Melbourne earlier this month, there was a strong consensus in the room: It’s no longer enough to talk about your organization’s culture, you need to be able to walk the walk.
(Before we go further, it might be valuable to provide a shared definition of “culture” as it relates to organizations. As CEB defines it for the purposes of our research: culture is the set of behavioral norms and unwritten rules that shape the organizational environment and how individuals interact and get work done in that environment.)
Historically, a lot of the discussion about organizational culture has been focused on finding the “perfect” culture, with one side advising a “one-size-fits-all” approach and the other proposing different cultural approaches to suit different industries. However, as one head of HR in the room pointed out, we need to turn our focus away from finding the “perfect” culture and instead look at the systems and processes at work that are stopping us from achieving sustainable culture change. Even when business leaders in the C-suite are very effective role models, internal processes often stop employees from fully embracing the culture that the business needs to drive, creating disconnect between the organization and the people tasked with moving its strategy forward. This is one of the key findings of our latest study on culture change management, which CEB Corporate Leadership Council members can read more about here.
This disconnect leads to problems, because even though 70 percent of HR leaders are confident that their organizations can define the culture they need, few are seeing true results in making this culture a reality. When HR leaders fail to create the culture the business needs, such as a culture of innovation, safety, or cost-efficiency, it means that other, less desirable attributes make up the reality of their current culture and stand in the way of the organization’s progress. During our discussion in Melbourne, one of the HR leaders in the room even said that this struggle between desired culture and results had seen progress in some business units move backwards.
Even though we know where we want to go, we seem to be at a loss when it comes to how to actually get there. What our research discovered is that the heads of HR at organizations who have gotten this balance right needed to close three key gaps:
1) The Knowledge Gap
Without fully understanding the culture you’re trying to drive, it’s near impossible for the organization to successfully align their behavior to the right activities, let alone course correct when barriers arise. To fix this, HR needs to expand the pool of stakeholders involved in the interpretation of cultural data. Organizations that have successfully done this have brought in employees from IT, customer experience, and even marketing to provide more holistic data about their culture and help inform change.
2) The Mindset Gap
While leaders are often great at role-modeling the culture the organization is trying to move towards, it can be difficult for employees to align their work with this new culture in their day-to-day role. Employees often want to change, and may be aware of the activities needed to align to the new culture, but obstacles arise that stop them from translating the culture to their context. For example, your new cultural vision might work for the C-suite, but is it easy to implement for your field workers? What about the approvals department? Or billings?
3) The Behavior Gap
HR also needs to ensure that internal processes and performance goals across their workforce are aligned to achieving cultural change. This includes reviewing how to train, coach, and reward leaders to drive the right behaviors to support the new culture. Leaders must be empowered to review internal processes and change them where they create barriers to employees to living the new culture—otherwise, people will go back to doing things “the way it’s always been done.”
Our investigation into the companies who have gotten this right also showed that their success was largely due to closing all three of these gaps at once: Closing just one, or even two out of three, will only have a minimal impact on the workforce’s ability to sustain the new culture needed to drive business success. Progress must move in tandem against all three gaps in order to have a measurable impact.
While this might sound like a tall order, by far the most resounding take-away from the Melbourne meeting showed that businesses in Australia and New Zealand need to stop searching for the “perfect” culture and instead focus on how they can move the entire workforce towards culture change—or risk falling behind.