Bonus Denied — Reason Poor Organizational Culture

Should we reward a CEO who creates a corporate culture that revolves around growth mindset and inclusion, or should we pay more the CEO who drives up financial results without much consideration for corporate culture?

I believe the answer is obvious, but it depends on whom you ask!

Changing culture is a tough business, even for the most experienced leaders. Culture change means human mindset change in large scale. It means moving from a mindset of knowing-it-all to learning-it-all. It means letting go of power and hierarchical struggles and replace with inclusion, cooperation, and harmony. That's a tall order, would you agree?

Good leaders understand the complexity and magnitude of the task that is why they surround themselves with competent, talented leaders than can channel down the leader vision and belief.

According to a Gartner study, CEOs refer to culture 7% more during their 2016 earning conferences than in 2010. Most CEOs and CHROs are aware of the value and impact of a healthy organizational culture, but, taking the challenge, that's another question!

Companies spend, on average, $2,200 per employee to improve corporate culture. Most of these resources get allocated to consultant fees, internal surveys, and employee training. However, despite the financial expenditures, only 30% of the company reported seeing improvement worth the investment.

Culture change is a vision, an ideal belief, and a destiny that a leader forges in his mind and engrave in his heart. Then, the execution begins to drive it relentlessly until it becomes a way of life that every employee believes in. However, that's easier said, than done!

The reality is quite different. A great culture is probably the toughest thing a leader can achieve. It's hard because people think differently, act differently, and care individually. Changing culture is more like trying to channel forward a herd of cats while facing a mean dog.

Creating good culture means bringing different people to believe the same, act the same, and care the same. Exceptional leaders understand that high-performing cultures require the whole organization to act as a united force, a force of one that feeds off each other, drive energy from one another and triumph together.

Great leaders demand collaboration, customer-focus, transparency, and trust from everyone. However, they also work hard to help people achieve their goals and aspirations. Good leaders allocate adequate resources, talent, energy, time, autonomy and freedom to projects, ideas and concepts that bring people from different backgrounds and specializations to work together, innovate and build a better future for all.

Culture is not a buzzword; it's the plasma that unites people to achieve progress through accountability and care. It's an environment where there is no "I," but "we," where everyone is enabled to experience the joy of work, the love of contribution, the expression of self-worth and where praise is given freely and high-standards and work ethics are the norm.

Culture is all about how you treat your people and how they interact with one another. It's about achieving corporate goals with the help of thousands of happy employees that understand the value of purpose, mission, accountability, and growth. It's rewarding people fairly, and promoting work-life-balance, career growth, higher education and involvement on stretch projects regardless of job function or hierarchy.

Data is not enough

 Employee survey channeled through human resources or third-party firms routinely do not reflect honest feedback. People have learned to respond on a guarded, filtered, and politically correct fashion to avoid surprises and retaliation. Genuine feedback happens only when the employee feels safe and secure from all potential reprisals.

Multiple studies have reflected that people keep their guarded behaviors even when they respond to the third party's anonymous surveys. Hence, the aggregated data is often skewed to reflect a more positive picture than reality.

Leaders that understand the true value of transparency encourage and reward unfiltered, raw feedback not just during survey periods but as a continuous way to improve operations, promote growth, eliminate waste, and learn.

According to Gartner, 67% of employees don't believe in their leader's cultural goals, while 87% don't understand them, and 90% of employees don't behave in a fashion that aligns with them.

The above data demonstrate that change must be driven from the top to have an impact. A leader cannot lead from a distance, or relay on his CHROs to lead corporate cultural change. Real transformation requires every employee to be part of the transformation, and it's certainly not limited to the management team.

 When people trust their leader and believe in their genuine intention, they will align behind the vision. Bootcamps should be led by the CEO and his business leaders, including line managers and second level managers, not just corporate and human resource trainers.

Culture change requires influencing people thinking processes while touching hearts and minds by integrating leadership presence, humility, and care. It's not about changing policy, but about changing belief and temperament. It's about developing peer-to-peer cultural training, combining in-house corporate philosophy with external leadership development programs that "stretch" people's ability and build future leaders.

Transformative Change

Great CEOs relate to people on a personal level and help them become part of the solution, by tearing down mental, hierarchical and physical walls that prevent communication and harmony and by aligning what matters to people to what matters to the organization.

Leaders that invest in earnest in people's shared understanding facilitate change by building a good process, enrolling everyone, then participating and championing the process in everything they do.

A CEO that preaches transparency, but doesn't drive it, live it and demand it, cannot expect any meaningful change. Culture is a dynamic environment that evolves through interconnectedness. Senior management cannot promote a behavior without allocating the right level resources and intellectual power to make it the change possible.

Microsoft changed when Satya Nadella took over as a CEO. During his tenure, different departments across the globe started working together on various projects experimenting, learning, and building a better future for the company and its customers. Microsoft shares grow three times faster under Nadella leadership because employees were happier working together, creating value, rather than competing for resources and recognition. A healthy organizational culture encourages collaboration, civility, humility, and creativity.

Howard Schutz has written, "so much of what Starbucks achieved was because of its employees and the culture they fostered."

Professor John Kotter and James Heskett have found that there is a correlation between robust, engaged cultures, and high-performance.

We know CEOs that claim to be customer-centric but have thousands of horrible customer service reviews. Many companies claim to be employee centered while they experience an employee turnover rate of more than 40% consistently. 

There are large organizations that experience employee turnover over 50% year over year, and where the entire management team is replaced every three years. This model cannot be sustainable to build momentum and build a long-term vision. An operation-model that contradict the company culture is nothing but a business allusion.

Good leaders understand that culture may originate at the top, but its true manifestation happens at the bottom. It occurs during the interaction with clients and partners, and it's manifested through cross-functional team and division collaboration. It's reflected in people behaviors while servicing others.

Leaders that pretend to care about culture will have employees that put in a false front reflecting alignment with corporate culture while doing the opposite.

A good leader creates synergy by eliminating the mentality of silos across departments by listening to his employee suggestions regardless of hierarchy.

 It's easier to create a vision than driving it to its destination. It's even tougher to coalesce people from all ranks to push with passion and vigor as if it's their creation. I understand that it's harder for leaders to allocate energy, time, and resources to an endeavor that is ongoing and hard to measure even when it's a necessity that worth the effort.

 The CEO engagement is vital to drive the vision and people direct involvement across all facet of the company to move the culture from a concept to a reality that everyone believes.

Conclusion

Culture is a long-term mission that has an immediate impact on revenue, profit, and growth. It's about people behaviors, feeling, thinking process, and belief. It's about people collaboration, cooperation, and performance.

It's the character that defines the future of the organization by empowering people to take part in bold initiatives that drive meaningful change. Culture change requires constant drumbeat during large forums, corporate events, town hall meetings, and person-to-person conversation. It's a way of life and a life mission.

If you are a CEO who's aligning your growth strategy with your corporate culture, you will invariably attract talent and grow revenue. When people are happy, confident, and energized, success becomes the norm.

Thank you for reading!

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