What's the Difference Between Culture, Employee Engagement, and Line of Sight--and Why Does it Matter?

As a business leader, it's unlikely you've ever gotten through a year without having some internal discussion about how to improve your company's culture. Many of those conversations likely dovetail with talks about the need to increase employee engagement. As these discussions evolve, you may find yourself wondering whether culture and engagement are distinct issues or simply different sides of the same coin. Then you read an article by some expert who says your real focus should be on creating greater “line of sight.”

At that point, you probably feel like your head will explode.

It is not your fault. The difference between culture, engagement, and line of sight can be mystifying, without a doubt.

That said, because these three elements are connected and greatly impact your company's performance, it's vital to understand the meaning of each and how they affect your business.? Consequently, this article will seek to clear up the mystery surrounding the differences between culture, engagement, and line of sight. We'll start by discussing the distinction between the three and then show how they are linked.? Finally, we'll consider how your pay strategy can help or hinder the combined power of culture, engagement, and line of sight to drive the desired outcomes.

Getting to Clarity

Let’s start by defining some terms. Certainly, every cultural guru or business expert has his or her take on what these labels mean. The following are some definitions culled from various sources. They capture the essence of these terms well enough for our purposes in this article.

Culture

This term represents the collective, self-sustaining patterns of behaving, thinking, feeling and believing that determine how things are done within a company.

Engagement

This is a measure of how committed employees are to their roles and how satisfied they are with their experience within the company.

Line of Sight

This has to do with the level of alignment between ownership and employees regarding purpose, strategy, roles, and expectations.

So those are the distinctions. Given those differences, which should a company focus on first, and is one more important than the other? Further, can you work on one without simultaneously considering the others?

Alice Zhou offers an interesting answer to those questions based on research by the Katzenbach Center, PwC's global institute on organizational culture and leadership.

"…simply changing a culture in an effort to improve employee engagement won’t necessarily lead to improved business performance.? In fact, treating engagement as the goal of culture evolution can have a negative impact.? That’s because although there are widely recognized drivers of engagement that are independent of strategy or industry, the cultural drivers of success differ widely from company to company.? The same behavior can drive success at one company while hampering success at another.

"We’ve learned through our work at the Katzenbach Center that the key to unlocking performance via organizational culture is to align company culture to business priorities.? This requires the selection of a “critical few” behaviors that enable the desired business outcomes.? When these behaviors are coupled with structural and process changes that support them, the entirety of these changes have an impact on the employee experience.? Using culture to drive performance thus requires emphasizing elements of the employee experience compatible with desired business outcomes, and downplaying non-compatible elements.? Whether the elements of the employee experience that drive performance also drive increased engagement is of secondary importance.? Employee engagement should be regarded as a byproduct of culture evolution efforts rather than a tangible goal of them." (“Improving Company Culture Is Not About Providing Free Snacks,” Strategy+Business, July 31, 2017, Alice Zhou)

Translation?? What Ms. Zhou is saying is that organizations should become clear about how company purposes can best be aligned with employee aims and ambitions. They must then leverage the potential impact of that alignment by providing clear roles for their people—and being just as clear about the expectations associated with those roles.?They can then use the natural mores and behavioral patterns of their cultures to reinforce the compatibility between what the company is trying to achieve and what employees are seeking—and how assuming stewardship over their roles brings about that fulfillment.? The organization must use those same cultural dynamics to leverage the business's ability to celebrate wins and how they are positively impacting people's lives—including (perhaps especially) those of individual members of the workforce.

This approach's natural outcome—or byproduct—is a more engaged workforce.? Engagement does not come from a direct campaign to improve it.? However, employer brand strategies can be employed to leverage and promote employees' positive experiences within the organization that make them feel fully aligned.? This helps reinforce the engagement patterns the company is trying to encourage and makes individual workforce members feel part of something special and unique.

The Role of Compensation

Once you understand the relationship between culture, engagement and line of sight, some compensation issues will manifest. To understand how, you will want to ask:

Does your present rewards approach…

?…help or hinder the company’s business model and strategy?

…clarify or confuse roles and expectations?

…reward outcomes or simply behaviors?

…encourage stewardship or entitlement?

…reinforce or undermine high performance standards?

Business leaders run into problems when they try to separate the compensation discussion from the ones they have about culture, engagement and line of sight.? They are intertwined.?

This is not to suggest that your pay strategy can improve workforce engagement, change your culture, and create a greater line of sight, all by itself.? Rather, if you do not approach compensation issues strategically and in the context of the broader employee experience you are trying to mold, everything else you do will have little effect.? This is because your compensation offering is such a powerful communication tool. It either tells employees they are valued partners or communicates that they are just hired help.? It conveys either a belief that employees should participate in the value and growth they help create or it tells them you think only shareholders should reap those benefits.?It communicates whether you support their roles in the organization and understand their ambitions, or you do not.

In short, your pay strategy will either be an asset or a liability in your pursuit of culture, alignment, and engagement improvement.

To dive deeper into the impact of your compensation approach on the issues discussed here, you can download a free report entitled: What is the Impact of Pay on Employee Engagement?