Knowledge Center: Publication
Find your place on the “culture continuum”12/7/2017 Matthew Herzberg
Once derided as “soft stuff,” company culture is now understood to affect business performance and is increasingly an area of strategic contribution for HR leaders. Yet many culture change efforts fall short of expectations—or fail outright.
One reason? Companies fail to accurately (and candidly) assess their starting point and therefore create plans that are unrealistic, unsustainable, and unpersuasive. By starting with a clear-eyed view of where a culture is, HR leaders can better articulate what a culture could be—and spark the sorts of frank management conversations that help link culture to commercial goals.
In our experience, company cultures fall somewhere along a recognizable continuum (see figure).
Here’s how each looks from the inside out.
Level 0: Complacent
How culture is viewed: “Our values exist on the company website and nowhere else. There’s no linkage between HR processes and foundational elements such as company mission, vision, and values—and there’s no way of measuring how our people are (or aren’t) aligned to them. Culture never factors into strategic discussions.”
HR’s challenge: Initiating difficult conversations; constructively challenging the status quo.
The starting point for most companies is a broad belief that the existing culture is acceptable and even immutable (“this is just how we do things” is a common refrain we hear from companies at this level). The challenge for HR is exacerbated when companies are meeting their financial targets, as this can blind the company to potential improvement.
Level 1: Curious
How culture is viewed: “We recognize that culture matters, and our values are taken seriously and included in onboarding, but there is little coordinated effort to communicate what our values mean—let alone what behaviors produce them.”
HR’s challenge: Getting beyond the notion that culture is about employee happiness; making a fact-based link between culture and employee performance.
This was true of a North American pharma manufacturer whose top team realized that counterproductive employee behaviors were thwarting the company’s growth ambitions. In response, the CHRO was asked to lead an effort to define values, train managers and employees, and revise performance management processes. These positive moves helped the company improve—to a point. Without full commitment from the leadership team, such efforts tend to achieve only modest gains.
Level 2: Committed
How culture is viewed: “Culture matters, and we have committed resources to improving it. Our values are linked to specific behaviors in performance reviews, and we’re seeing positive results. Yet there’s no link to return on investment, and some senior leaders proclaim love for the values without actually living them.”
HR’s challenge: Helping leadership see cultural change as a serious business initiative and not be dismissed as “training.”
Case in point: An energy company’s leadership team had done the hard work of articulating company values and tying them to behaviors. Yet that same team wasn’t following through in their own behaviors—a point that was not lost on their subordinates, who were becoming cynical about the initiative. The “aha” moment came during a team exercise convened by the CHRO, when the leaders realized they were exhibiting the same sorts of dysfunctions they were trying to eliminate from the rest of the company. This realization proved a turning point in their improvement efforts.
Level 3: Catalyzed
How culture is viewed: “Culture and people metrics are linked in tangible ways, and employees are increasingly engaged, motivated, and likely to stay. We track these connections regularly and take them seriously, though perhaps not as seriously as our traditional customer-focused metrics.”
HR’s challenge: Helping leadership resist the urge to conflate employee-related culture metrics with customer-related metrics.
The former drives the latter. Take the following example: A large US utilities firm centralized its employee engagement data, as well as the results of a quarterly firm-wide culture survey, to improve its ability to act on what it learned. This helped HR to address issues proactively. When the company saw, for example, that employees in some units felt undervalued, HR implemented programs to boost engagement. These included a new, company-wide coaching model as well as a positive-recognition program to publicly reward customer-focused behavior. The result was stronger employee engagement and higher levels of customer satisfaction, which in turn raised morale and improved employee engagement further.
Level 4: Customer-centric
How culture is viewed: “The environment we create for employees is increasingly the one that customers experience (reflected in our strong customer satisfaction scores). Our people feel empowered to make customer-related decisions based on principles, not procedures. Our goal is to be internally aligned and externally adaptable.”
HR’s challenge: Encouraging the cross-pollination of ideas and innovations across the C-suite.
Consider the high-performing financial services organization that wanted to improve upon its position of strength. With a view of the collective enterprise and a robust company culture steeped in collaboration, HR was able to help bridge silo behavior and adapt faster to changing customer needs with redesigned products that were better—and faster to market—than what competitors could offer.
Level 5: Continuous
How culture is viewed: “We can list the positive aspects of our culture that must never change, yet we are agile in pursuing opportunities in an evolving market. When our customers or employees speak, we listen and make visible improvements based on what we learn.”
HR’s challenge: Sustaining the organization’s success. Considering all the changes in the workforce, new expectations will continually threaten to disrupt a company’s culture.
Forward-looking HR leaders won’t be sitting still. Whether they’re facing up to the challenges of managing the virtual workplace, understanding the implications of automation on employment, or wrestling with the complications of having multiple generations working side by side—the best HR leaders will be keenly aware of how reenvisioning company culture can help make the most of tomorrow’s workforce.
Few companies reach level 5, and most companies enjoy significant performance benefits with cultures ranked as low as levels 2 and 3. The point is not the destination, but the path to improvement that companies take by focusing on the principles of culture change.
Thinking of culture as a continuum also helps HR leaders guard against backsliding—for example, during leadership transitions or moments of crisis where the temptation is strong to take shortcuts that trade short-term performance for long-term organizational well-being.
To learn more about the levels of the culture continuum, flip through the interactive article above or click the download button for the PDF.
About the author
Matthew Herzberg (firstname.lastname@example.org) Industrial Practice at culture-shaping firm Senn Delaney, a Heidrick & Struggles company.
Barbara Porter is an alumna of the Chicago office.
A version of this article was previously published by Changeboard.