Special feature: The pillars of culture shaping

We know today that thriving cultures are sustained when leaders understand that culture is a journey in its own right and not a destination. This special episode of the Heidrick & Struggles’ Leadership Podcast is about organizational culture: what it means, how to build a positive one, and why it matters now more than ever. With the constancy of change in our world today and the looming economic uncertainty, it is culture that will enable organizations to sustain performance, even in times of uncertainty. There is no one-size-fits-all approach when it comes to culture shaping. However, there are common elements to thriving, adaptive, powerful cultures, and there are four foundational principles that serve as keys to shaping and maintaining them: purposeful leadership, personal change, broad engagement, and systemic alignment. Following our discussion of the four principles of culture shaping, we'll explore other important principles related to monitoring and maintaining a positive culture. The goal of this podcast, our published work, and indeed our whole organization is simple: to empower you with the mindsets, case studies, research, and resources that you need to intentionally and continuously shape your culture and your future.

The sections in this podcast include:

• (7:54) Purposeful leadership
• (17:54) Personal change 
• (25:28) Broad engagement 
• (31:58) Systemic alignment 
• (37:41) Metrics 
• (44:30) Digital culture
• (50:49) Going to market 

Below is a full transcript of the episode, which has been edited for clarity.

Welcome to the Heidrick & Struggles Leadership Podcast. Heidrick is the premier global provider of senior-level executive search and leadership consulting services. Diversity and inclusion, leading through tumultuous times, and building thriving teams and organizations are among the core issues we talk with leaders about every day, including in our podcasts. Thank you for joining the conversation.

Ian Johnston: This latest episode of the Heidrick & Struggles Leadership Podcast is a special feature about organizational culture: what it means, how to build a positive one, and why it matters now more than ever. 

My name is Ian Johnston. I'm a partner in our Culture Shaping and Organization Acceleration practice, and I'm here with Rose.

Rose Gailey: Thanks, Ian. Hi, I'm Rose Gailey. I'm a partner in the US and serve as the global lead for our Culture Shaping and Organization Acceleration practice, and we're delighted to be with you today.

Culture is, at the heart, how people work together to get things done—or don't. You'll hear several of our colleagues highlight the tenets of shaping and maintaining a positive organizational culture, including examples of companies we've worked with.

To set the context: we've learned in our decades of work that culture is a living organism that must be nurtured and intentionally developed to ensure positive impact. Failure to intentionally shape culture opens the door to risk. Purposeful, future-focused cultures secure mindsets and behaviors that deliver performance and minimize risk. Culture must be systemically hardwired into the fabric of an organization's HR systems, quality, and operational excellence initiatives, and employee and customer experiences to be sustainable. 

Culture is, and will increasingly be, one of the biggest influences on team performance as working hybrid or remote becomes the post-pandemic norm. People are likely to feel less connected to their company and to each other, so as leaders, we have to be sure there's some glue that brings things back together. That glue is culture, starting with the underlying values, mission, and purpose that build connection and commitment. When leaders align culture and strategy, culture becomes an even more powerful performance accelerant.

Ian Johnston: At the start of 2020, the topic of organizational culture was in the headlines and top of mind for many leaders, recognized as a potent enabler of performance. We set out to write what would become Heidrick & Struggles' latest book, Future Focused: Shape Your Culture, Shape Your Future. Our goal was to highlight culture's impact on engaging employees, delivering on strategy, and driving results, with case examples on how to shape culture. We wanted to tell stories about the many exemplary CEOs who have consciously shaped their organizations’ cultures and showcase how they unlock the magic that enabled the success they experienced. 

But of course, we all know what happened next. COVID-19 moved the goalposts, and in the most unprecedented and most devastating disruption of our time, people's experience of life dramatically shifted in a world suddenly rendered uncertain and unfamiliar. Faced with the biggest intractable problem in a generation, organizations dealt with disruption, discontinuity, and extreme challenges to their operating models. Leaders had to make major decisions quickly, based on limited or ambiguous information. Leadership demanded courage, a strong sense of purpose, and a capacity to demonstrate the confidence needed to engage and inspire a workforce filled with worry and uncertainty. 

Inclusive leadership and cultures of inclusion became the keys to unlocking thriving organizations. Words like "empathy" became very important. Some leaders needed to fundamentally reevaluate their personal style of leadership, and many CEOs found themselves leading their organizations while having no physical connection with their people, products, or customers.

Leaders who had laid a solid culture foundation—authentically committed to a set of values and defined and depended on an inspiring purpose—helped their companies to get through 2020 and beyond with more resilience and less turmoil. Those who hadn't, often saw their organizations flounder. 

What makes the difference is that, when facing the same issues, organizations with thriving cultures deal with those issues more quickly and effectively. Their leaders are more trusted. Their employees are more resilient and innovative, and their customers are more loyal. Their purpose-driven culture becomes the compass point that allows them to envision a clear future and thereby navigate through an unprecedented present.

Rose Gailey: Thriving cultures are also central to helping companies navigate planned change toward a better future. Common situations include mergers and acquisitions, digital transformations, and improved diversity, equity, and inclusion initiatives. With the constancy of change in our world today and the looming economic uncertainty, it is culture that will enable organizations to sustain performance, even in times of uncertainty.

There is no one-size-fits-all approach when it comes to culture shaping. However, there are common elements to thriving, adaptive, powerful cultures, and there are four foundational principles that serve as keys to shaping and maintaining them: purposeful leadership, personal change, broad engagement, and systemic alignment.

You'll hear Dustin Seale talk about purposeful leadership. Purpose-driven leaders who are intentionally committed to the organization and its culture cast a long shadow of positive influence. 

Transformation is rooted in personal change, as John McKay will share. This principle challenges leaders to model openness to personal change. Leaders need to be able to take a hard look in the mirror so they can make an authentic commitment to humility and to doing the right thing. We've all seen and experienced what happens to the credibility of a decision when a leader says one thing and does something completely different. 

Priya Dixit Vyas will discuss how and why broad engagement is key for the culture to be lived and Holly McLeod will elaborate on systemic alignment. The culture and values have to be not only integrated into the minds and hearts of all employees but also hardwired into all of the systems of the organization. 

Following our discussion of the four principles of culture shaping, we'll explore other important principles related to monitoring and maintaining a positive culture. Anne Comer will discuss the importance of shared metrics to track progress. Adam Howe will zoom in on digital culture specifically, and Jenni Hibbert will round out our perspective with thoughts on why culture is so important for leaders to understand today. 

The goal of this podcast, our published work, and indeed our whole organization is simple: to empower you with the mindsets, case studies, research, and resources that you need to intentionally and continuously shape your culture and your future. We hope you enjoy this episode.

Purposeful leadership – Dustin Seale

Dustin Seale: My name's Dustin Seale. I'm the managing partner for Heidrick Consulting in Europe, Middle East, and Africa focused on corporate culture for the past 27 years of my life. 
There's one part of culture that to me has become clearer and more critical throughout time, and that is purposeful leadership: leaders leading culture purposefully but also having a purpose for the organization. For years, organizations have had visions and missions, but the purpose is bigger than that. It’s part of the zeitgeist of the world; it’s what people in organizations expect, but also customers in the wider world expect organizations to know who they are and represent something bigger than just profit. It's the articulation of what this world would be missing If we weren't here. What do we contribute to the world that makes us a positive addition to the world we're in? 

There are a couple of things within purpose that are critical. The first part is spending the time to reflect as leadership on what is it that we bring to the outside world that we authentically believe, and that the organization is really good at—something that we can do. We have to capture that and distill that into a statement that is clear but also has the emotive nature of purpose within it. Then, critical to that is aligning everyone to that—aligning leaders, so their behavior, their action, and their decision-making represent that purpose. Then, ensure that over time (because it's easy to get excited about a purpose for a short period of time) you have a commitment to living that purpose, starting with the CEO. 

Now, when I started this work, nobody had a purpose statement. Today, every organization that I've seen over the last 10 years has a purpose statement and has an articulation of the behaviors that make it real—that is, the culture. The difference is, some organizations make that real and bring it to life in how they lead their business; for others, it's a statement on the wall. What I'm going to share with you is what it looks like when that statement comes off the wall and becomes the way leaders lead and the way the organization interacts with the world, the way they make decisions. That's the critical juncture: when leaders take it off the wall and make it real.

I've been lucky enough to work with leaders for years that are terrific. One leader I've been lucky enough to work with four times (and each time he's been a CEO) is Martin Glen. The last organization he led as a CEO was the FA: The Football Association in England. It's the very first football association in the world and it is an institution in England; it touches every part of this island. Martin, in four companies, was able to accelerate performance. He's what we call a super accelerator: somebody who was able to accelerate performance through culture. And in the FA, one of the elements that helped him take an organization that was having challenges and turn it into a world-class organization was this articulation, then living, of purpose. 

So, the FA. Just to give you a little bit of background: football is nearly a religion in England. It is part of everyone’s lives. There are many groups that have interests in the FA. There are commercial interests from the leagues and the clubs. There's governmental interest. And then, there's that large societal interest. It’s a lot of pressure; it's like being underneath a microscope. And within football, within the Football Association system, there are also vested interests across that group. There are challenges in uniting those groups to take football and change the way the game is played in England. 

There are two parts to what the FA does. They govern football and develop the elite game, the national teams, and the system that leads to them, but also all grassroots football across the entire country. Every game that’s being played on a park pitch or at a club is governed and led by the FA. They’re everywhere and under a microscope.

Now, Martin took a step back and thought, “What does a modern FA look like? What does it have to bring in order to be of true value? Not just governance, not just the money, not the rules, but what do we have to do?”

They landed on two elements to purpose. One was to unite the game and inspire a nation. Unite the game meant to bring all those vested interests, those different parties, together and unite them around this beautiful game of soccer. They wanted to inspire a nation with elite teams that are winning, but also inspire children, kids, and teenagers to play football—to get out, get fit—and for parents to be out at those games, to have the inspiration of community that comes from football.

The second part of it is: for all. That was critical. That means growing the women's game, inviting and including more people from different walks of life, and different colors, shapes, and sizes in the game of football. Unite the game and inspire a nation for all. Now, for every one of the top teams, that became the prism through which they'd make decisions, and the way they'd act. They decided on some values that would support that. They're called PRIDE, which is “progressive, respectful, inclusive, determined, and excellent.” Those two things, the purpose, and those values, guided everything they do. 

We spent a good deal of time with the top team at the FA articulating the purpose, getting to a place where they were enthusiastic and inspired and saw ways to live that purpose. But the real conversation, what makes a leader like Martin special, is their own personal ownership. We sat down with each one of his team members and walked through the purpose. We asked them to talk about what it meant in their part of the organization, why it was important, and how they were going to put it into play. That was the commitment from the CEO: to spend time, individual by individual, checking that there's complete alignment and commitment but also supporting them in thinking, “How do I make this the most powerful realization of the purpose in our part of the organization?” Make sure your people are with you and committed to the direction. Now, what was the outcome? What's the outcome of focusing on purpose and then living purpose? 

There are a number of things that I would consider outstanding outcomes. First, England had underperformed on the elite stage for years. So, they reinvested in St. George's Park, which is the training ground for all the development teams up through their league teams. They changed the way that worked: how people were selected, how they were grown, the coaching approach from top to bottom. That was in the knowledge that national teams that are winning inspire. 

Now, the outcome: they built St. George's Park. They developed all the systems to make that happen. And the team started winning tournaments. At first, it was the under-19s and under-21s winning tournaments. But recently, because of the heavy focus (disproportionate, some might say) on the women’s game, the women now are a leading team on the global stage. They made the semifinals of the World Cup and they just became European champions. The men made the World Cup semifinals as well and were European finalists and lost in that final. These are the best results they've seen at that elite level in decades. Behind that, the next generation of players is being built, so that it’s not a small period of time while we're having success, but where there's a success over time. 

The second part of the FA is grassroots football. Those are the people playing every weekend or going to training or to practice throughout the week, right across the country. That's the power of football. That's what brings people together, keeps everybody healthy, and keeps people off the streets. Martin focuses his team on making sure that the FA was in the best financial footing that it could possibly be. That meant maximizing the assets they have and using Wembley, which is the iconic stadium for the national teams, as a source of revenue. 

They optimized the organization, and engaged the whole organization, in making that happen. They were able to spend a record 125 million in grassroots football right across the country. That meant more investment at the front end: investment in young girls getting into football and building leagues, young boys growing up and building their capability in football, and adult teams right across the country.

Secondly, they didn't want that grassroots football to just be the game. They wanted it to be a better game, so they've engaged the whole nation in a program called Respect, a code that players at all levels, coaches at all levels, and even parents, the people watching the game at all levels, sign up to. It’s about respect for the players on the pitch, respect for one another, and about addressing some of the ugliness that can happen on the sideline or on the football pitch that makes this beautiful game not so beautiful. The success of that has created a space where families feel better about being on that touchline watching games because the atmosphere around them is better.

Now, Martin had a number of years to do this and changed a lot more about the FA than just the things I've talked about. But undoubtedly, they were able to unite the game and inspire a nation and give access to all in the game of football and to create a culture right across the FA that made that real. One of the steps that any leader needs to take in making sure purpose becomes real is gaining the commitment of each individual on their team.

Personal change – John McKay

John McKay: Hi, I'm John McKay, a partner in Heidrick Consulting. I specialize in working with CEOs and other top leaders to create thriving organizational cultures and have been doing this work almost 35 years. 

Throughout our journey in culture shaping, we've carefully evaluated what our most successful clients have done to shape their culture, resulting in a positive, measurable impact on their results, and what other leaders were doing—or not doing—where it hadn't had an impact. As a result, we developed four proven principles of successful culture change. The second of those principles is personal change, which I'd like to explore with you in this session. 

Let's start with an example of two CEOs we worked with many years ago. The first believed that the best way to motivate people was through fear and intimidation.  He spoke; others jumped. “You go right at the problem,” he told me when we first met. “You don't deviate or show any sign of weakness.” I could tell from his very stern tone that he meant it. 

A couple of minutes later in the same conversation, he wondered aloud why his people wouldn't take risks, why they wouldn't put forth new ideas. “I've told them over and over that they need to innovate,” he said, “and they still won't make the effort to be creative.” This leader's blind spot was fascinating to me. I didn't even work for him and he practically had me shaking in my seat. He genuinely wondered why people wouldn't speak up. They were terrified of him. 

We made preparations to coach him, but by the time he had reached out to us, the wheels were already in motion. He was soon replaced by another leader who was tasked with getting better results, faster. This new leader, in contrast, was very self-aware, and humble. Still strong, but he made it clear that he really was open to new ideas and approaches. He role-modeled that in everything he did and said. 

It wasn't long before innovation was a hallmark of their culture. People, right down to their front lines, were exploring new and better ways to serve their clients. They became number one in customer satisfaction in their industry, for years running, and created products and services that I'm confident many of you use today. When you as a leader strive to shape a culture, you're not changing the entire organization, per se. You're actually inspiring and leading change in a collection of individuals—that's a subtle distinction—and changing behaviors is an interesting and difficult challenge.

Individuals, especially adults, tend to resist change. We’re each a collection of habits (some that work well for us and others that don't) and we're often hard-pressed to do things differently. That makes sense in a way because who we are is what got us to this point as a leader, right? So why change? 

Part of the reason is that those who follow us will generally only be as open to change in growth as we are. That's part of what we call the shadow of leadership. We've learned after many years and many leaders that teams and organizations become shadows of their leaders. If you take an honest introspective look, you'll see strengths in your team that reflect some of your strengths, as well as weaknesses in your team that truly reflect your own weaknesses.

The first leader I mentioned was locked into one way of doing things and wasn't very self-aware or willing to grow. And though he said he wanted innovation; he wasn't demonstrating that through his actions or the environment he created. The second leader was more introspective, curious, open, and willing to try new things, and created an environment through his shadow that resulted in a truly innovative culture. Yes, there were other steps they took: pointing rewards and recognition toward new ideas, sharing client stories of success, and celebrating those who submitted ideas, big and small, but none of those things would've had an impact if the top leader hadn’t cast that positive, open-growth shadow that he did.

Another thing the two leaders did differently was where they each focused. The former leader emphasized behaviors: “We have to do things differently.” The second focused more on a shift in mindset. He clearly communicated the why of the desired change, and everyone got excited, even inspired, to make a difference for their clients. The desired behaviors then followed that shift in thinking. 

One of the reasons I've done this work for so long and why I still find it so rewarding is that leaders tell me all the time that, though they greatly appreciate what we've done for their organization, we've also helped them become better spouses and partners, better parents, better members of their extended family and community. That's because we help them have a shift in mindset that brings about lasting personal change in all their life, not just the workplace. As a leader, you can't just tell people to change. They need to have meaningful insights, those “aha!” moments that drive lasting change. We've developed a powerful learning methodology that does just that.

When we teach leaders to be more effective listeners, for example, we don't focus on the usual approach that’s more behavioral: leaning forward, watching their body language, repeating back what they heard, or telling the other person how it made them feel. Instead, we reveal typical thought habits that get in the way of effective listening. Once leaders see themselves reflected in those mental habits, they can catch themselves, create a new mindset, and become better listeners in the workplace—and in their personal lives. 

I’ll close with one more example. I was speaking with a senior leader of a large financial institution at a team dinner one evening. He was one of the most effective that I'd seen at creating a healthy high-performance culture, top to bottom. He mentioned in passing what a mean blankety-blank he'd been for many years (I can't repeat the words he said, but it certainly made the point!). I laughed, thinking he was kidding because he didn't seem to have a negative bone in his body. 

But he remained serious, and as I looked around the table, all the heads were nodding. He explained that he, too, had tried to lead through force, commanded control, fear, and often through anger. But he'd had an insight in one of our culture workshops before I'd met him that changed his entire life. He started caring about his people, coaching them towards success, asking for and listening to their ideas, and role-modeling a healthy, more sustainable mindset and behaviors. As I looked around the table, I realized that many of his senior team had come with him to this organization because of the leader that he'd become. Fear had turned to loyalty, and together they'd partnered with us to cascade that approach—their example is a healthy team—to the rest of the organization. 

I hope that as you reflect on your own opportunities for personal growth, that you'll consider leaving a legacy that both of these healthy leaders I've cited and many others with whom we've worked have left. Not only to get better results, but is a gift to your people, to your organization, to those in your personal life, and, ultimately, to the world.

Broad engagement – Priya Dixit Vyas

Priya Dixit Vyas: Hi, this is Priya Dixit Vyas. I'm a partner at Heidrick & Struggles, based in London. Today, I'm going to speak about the third principle of culture shaping, which is broad engagement. In the work that we do in culture, it's imperative that the culture journey starts at the top with leaders clearly articulating their vision of culture, shared values, and how it helps deliver their strategic ambition. However, for the culture to truly accelerate the pace and execution of its strategy, to build momentum, broad engagement is critical. We need to win the hearts and minds of everyone in the organization. To thrive, culture must be shared and lived across the entire organization, every day. 

Culture is about how we show up as individuals. It's how we work in teams, and how that then spreads across the organization. It's about the common language. It's about the stories. It's about making a personal connection as to why culture matters and how the work we do every day contributes to that overall purpose, and the results for the organization.

It is with broad engagement that you create a sustained ownership for the culture. It's not just limited to the top, but the whole organization; it's like you create a groundswell which really overwhelms the current culture and brings in the culture that you aspire to have. 

So, how do we create broad engagement? I thought I could share a few examples of how some of our clients have done this very successfully. One of the first clients I'm going to talk about is Meggitt. It's one of the FTSE 100 international aerospace companies, with over 11,000 employees across the globe, living in a very multicultural environment. 

They have a new leader and there was a shift in strategy. There was a clear decision to move away from a holding company culture towards an integrated, one-Meggitt culture. This journey was sponsored and championed by the CEO and the executive team who very clearly laid out a very inspiring purpose. They built a clear roadmap for their areas of focus and demonstrated a clear intent around their culture as a strategic pillar for performance. Even today actually, if you were to see their investor presentations, they will always talk about culture being a strategic pillar and having a big impact on their results. 

So how did they create broad engagement? The culture journey firstly had clear branding and became a part of the Meggitt everyday life. To create true internal ownership, we started working with the senior leadership teams, and then the next level leaders. However, to build that internal capability and engagement around culture, Meggitt decided that they would equip their own leaders—the best and their brightest—to really speak the language of the culture that they wanted, to role-model it, and to operate on that basis, day in and day out, with their values.

Over almost four years, they trained a cohort of different levels of leaders every year as culture facilitators. These business leaders were then embedded in their business. They made culture about how it operated and lived within the teams that they operated in, and how they used culture to solve everyday problems at Meggitt. 

In addition to the facilitators, we also had a huge community of champions. They not only equipped and trained the champions, but they celebrated the role of the champions. The champions used every opportunity to link culture to how they showed up, how their values were brought to life, how they promoted people, how they developed people. It really made a difference. 

More than ever during the pandemic, you always hear the executive team talking about an email they get every other day, saying “Thank you for investing in our culture and really guiding us through the pandemic, because it would've been so difficult otherwise.” The culture truly stood the test of time because it had broad engagement. 

I'll shared another example of another client—very large in the automotive industry, active—who embarked on a transformation journey to lead the industrial tech space in the automotive industry. They recognized the need to transform their culture from a traditional automotive supplier to a tech-driven company, enabling green mobility. In February 2019, the CEO and the leadership team really initiated their journey. Again, they led from the top and did a very robust assessment of their culture with a clear articulation of where they wanted to go.

What was really important for the CEO and the leadership team was to build broad engagement, and they wanted to build that at pace and scale. They covered 450 leaders across the globe in a matter of weeks—it wasn't months, but in a matter of weeks. That kind of space really built broad engagement. Each and every one of these sessions were attended by the CEO and the top team members, clearly demonstrating their commitment to building this engagement.

They also recognized that this broad engagement would have a power to catalyze the entire organization behind the change and drive their results much faster than they would've otherwise done. It was not just culture was because it was a nice thing to do, but it was imperative for their results, and they made that linkage really, really clear. 

We worked with them very actively across 2500 leaders after that. We worked across the pandemic. When we couldn't meet in person anymore, we transitioned into doing this digitally. But they just didn't stop. That broad engagement was a key pillar of how they accelerated their culture journey, but even more importantly, accelerated their transformation journey.

In addition, they both have built strong champions communities with a clear roadmap, identifying a blueprint of how they would engage the next level, and the next, and the next—how they would go down to the sites and the factories and create a clear plan in each and every site. It wasn't just about the executives, but it was the frontline. It was the service staff. It was the corporate functions. Everybody had a role to play in building this culture. 

I would just like to conclude today by saying that broad engagement is critical of the four principles in embedding a strong, high-performing, and healthy culture in your organization. In isolation, it won't be enough, but without it, you won't quite get the results that you're looking for. We start with purposeful leadership, with a clear need for leaders to recognize where they need to change personally, to build the broad engagement to create a groundswell and really inspire people across the organization to believe that everyone in their job can make a difference to the culture. Finally, it's systemic alignment, which really embeds it in their policies, procedures, and communications.

Systemic alignment – Holly McLeod

Holly McLeod: Hi, I'm Holly McLeod, a partner in our Heidrick Consulting Culture Shaping Practice. I've been with the firm for over 12 years, focused on helping clients create healthy, high-performing cultures. What I've learned in that time is that the help of an organization is just as important to getting optimized results as the focus on performance. 

One of the biggest questions organizations wrestle with during a culture transformation is “How do we ensure lasting change to our culture?” This is where our best practice in culture shaping, systemic alignment, is critical. Our experience in external research has repeatedly pointed to the fact that successful companies lead from the alignment of strategy, structure, and culture. While it is critical to establish the cultural tenets needed to enable a new strategic direction and engage leaders and employees in the mindsets and behaviors that will enable that strategy, operationalizing culture is where lasting change can be hardwired. 

My favorite definition of culture is “how we do things around here”: a combination of behaviors that are exhibited in the workplace and the systems and processes utilized to produce outcomes. In our experience, aligning culture with people, processes, and systems, as well as those key operational processes and systems, is important to the delivery of strategy.

During the pandemic, we worked with a large, fast-casual restaurant group based in the United States. They had just transitioned from being founder-led for 20 years to being backed by private equity and led by a new executive team. One of the first goals of the new CEO was to evolve the culture, ensuring they kept the best of what made the organization special while also aligning to a future that was more digitally enabled and could meet growing needs of their customer base.

As part of their culture journey, we created a new set of values and guiding behaviors that captured the spirit of the organization today, as well as expectations for how employees needed to show up going forward. Quickly thereafter, we worked with a group of HR leaders to determine how to integrate these new values and guided behaviors into the entire employee life cycle, from recruiting and hiring to offboarding. As part of that continuum, we ensured updates to the employee handbook, performance management system, and succession planning. Hardwiring culture is more than just people, processes, and systems. It also requires a look at the key operational processes and systems that are important to delivering an organization's strategy. 

In a global consumer package goods company adjusting to increased competition and consumer expectations, the leadership team chose to focus on processes that involved research and engineering as well as multiple functions that would optimize getting new products to market quickly. One team member reported a change in a work plan to bring cross-functional ideas together before narrowing and prioritizing, which significantly improved buy-in across all the involved teams, and allowed them to move faster with their decision-making.

This type of systemic alignment is not possible without accountability from the CEO and executive leaders. Systemic alignment requires these leaders to take equal responsibility for modeling and driving culture in their functions and lines of business. Executive teams typically oversee, sponsor, and support the plan that ensures these processes and systems are aligned to the culture. When they maintain a line of sight to what is helping or hindering the process, they create even more credibility as leaders who are acting in the best interest of the organization. A CEO and executive team who hand-select an influential team of line leaders to play a critical role in sustaining culture will see strong benefits. We call this a culture leadership team. This team can oversee and manage the nuts and bolts of the culture-shaping journey and implementation. They can help accelerate progress and address unanticipated organizational roadblocks. They can dive into organizational knitting to understand real-time applications of new cultural values and to observe dynamic forces so that they can take fast action to amend or address problems as needed.

For example, we have seen such teams identify disconnections between culture goals and the compensation system, highlight a need to align performance management with culture, ensure the content and tone of employee communication are supportive of broad engagement and note when decisions are made and acted upon in ways counter to the culture.

A final focus in systemic alignment is the metrics tied to culture. The old saying, “what gets measured gets managed,” is just one of the reasons we advocate companies choose to monitor results from their culture-shaping efforts. We typically recommend a selection of human capital metrics, such as employee engagement and turnover, and operational metrics tied to the strategy, such as net promoter score or safety, as examples.

In closing, culture requires an intentional path to integrate cultural tenets into every thread of the fabric of an organization. Without full integration into systems and processes, cultural messages and values may be at odds with the rewarded behaviors and outcomes. The CEO serves as the chief culture officer and will either accelerate a culture and its impact or miss the opportunity to accelerate the pace of strategy execution. At all levels of the organization, culture requires leadership to support, reinforce, and challenge the alignment of cultural values with the day-to-day experience of employees and customers.

Metrics – Anne Comer

Anne Comer: Hi, my name is Anne Comer, and I'm in our Culture Shaping and Diversity, Equity, and Inclusion practices. I'm going to talk today about metrics in culture shaping. 

First of all, the impact of culture can be measured in the same way that we measure really any other aspect of organizational performance. There are several ways that we can do that, but overall, when you're thinking about how to measure the impact of culture, we start by understanding where we are today. That starts with an assessment, of course. When we think about how to assess a culture's impact, having a scorecard can be a really great way to keep track of it on a quarterly and annual basis. That allows you to take a look at culture metrics alongside other important metrics that you have from the business, looking at where correlations might exist. 

Let's take these pieces one at a time and first talk about how to measure culture impact. There are a lot of ways to think about that. There are some measures that most organizations already have, and we can tie those back to culture. For example, retention: retention is a measure that moves up and down with the culture. For another aspect of retention, you might look at top-performer retention. For one of our clients, Helen of Troy, when they embarked on their “Power of One” culture journey, one of the measures that they paid attention to was top performer retention. That increased once they began focusing on their culture.

Another measure that most organizations are already paying attention to is recruiting and being an employer of choice, so that’s something that is already in flight. What Helen of Troy also looked at was the land rate for their first-choice candidates. That particular metric for Helen of Troy rose by over 20 points once they started focusing on their organizational culture. 

There are also specific culture assessments. We have a corporate culture profile that looks at a whole range of culture characteristics of an organization. Helen of Troy, for example, with their corporate culture profile, has increased their results every year since they began focusing on culture. It's a very concrete way to look at the impact of the work that we're doing. We usually look at the corporate culture profile on an annual basis, but we also have another tool, a digital conversation, that allows us to take digital pulse surveys of employees. It's a very quick and simple online and highly interactive way of checking in with people that can be done on a monthly or quarterly basis. 

Those are a few ways that we can think about how we measure culture. But we also want to look at some of the correlations because we've also noticed that once organizations start to focus on culture, they also start to see increases in more traditional business metrics, or what we often think of as the hard business metrics.

For example, our client, Helen of Troy, reached $2 billion dollars in sales last year. Another of our clients saw a significant increase in both revenue and EBITDA over the two years after they began their culture journey—and they had that increase in EBITDA without laying anyone off. They attributed that increase to all the culture work that they were doing. So, soft measures, retention, recruiting, culture surveys, pulse checks with employees, but also correlations with some of those more traditional business metrics that are being tracked regularly. 

When you're embarking on a culture journey, it's important to understand where you are today and then develop a roadmap to reach your goals. You need to ask, “what is our current culture? What are our aspirations?” You want to be thinking about the competencies that will give you the kind of culture that we aspire to—the desired behaviors. And then, when we think about the goals that you have, and what kind of culture you want to have, we can often define those through our values. 

The values also need to be defined through specific behaviors. How do these values show up in our organization? Then, when we think about how to get people there, that's where the roadmap comes into play. The starting place for the roadmap was thinking about culture as a continuum and where we are on that continuum; from a place of not being aware of culture as a driver of engagement and retention and all of those things that we want in our organizations, all the way up to culture being a competitive advantage.

Moving along through the continuum, we really need to be thinking about building that roadmap that will help us move through and build a strong culture that becomes a competitive advantage for the organization. We want to start by looking at the future strategic climate. Where are we going? What are some of the challenges that we're facing within our industry, within the geographies that we operate in? Then, we look at the strengths, weaknesses, opportunities, and threats in relation to executing on our strategy. That will help us start to surface what some of the cultural barriers are that are weaknesses or threats in relation to achieving our strategy.

It is important for the culture roadmap to be strictly tied to the strategy because it's the culture that really has to support that strategy. It’s looking at the strengths and the gaps in the current culture. We can get some of that information through some of the assessments that we've talked about, like the corporate culture profile, but we can also get it through employee surveys.

Then, we want to assess those strengths and gaps against what we call our essential drivers. These are cultural characteristics that we know to be vitally important in healthy, high-performing cultures. It's things like having direction and purpose, and alignment among leadership that is communicated right through the organization.

It's about having a performance orientation. It's about being clear that we live up to our integrity and ethics, and it's about having a customer and quality focus. Those are drivers that we consider external organizational drivers that most organizations are already paying a lot of attention to, so there may already be some strengths in those areas. But we also focus on relationship drivers or more internally focused drivers, such as collaboration and trust, appreciation and recognition, positive spirit and vitality, agility, innovation, and growth. This roadmap really needs to be a living document because the landscape continually changes. We need to make adjustments to make sure that we are moving in the right direction and adjusting to new challenges as they arise. 

Coming out of a roadmap activity, we want to create a clear culture scorecard that includes the metrics that we're going to be tracking. It could be things like retention, it could be safety, it could be share price. It could be any of those correlational hard business metrics and those softer metrics around culture that we want to track. We then track that the way we would any other strategic initiative: it becomes a scorecard that we check in with on a regular basis. 

As you can see, culture really is something that we can measure. It's just as important to measure cultural impact as it is to measure any other business impact that we're paying attention to.

Digital culture – Adam Howe

Adam Howe: Hello. My name is Adam Howe. I lead much of the work that Heidrick & Struggles does in the digital culture transformation space. Whilst we know that digital transformation is no new term, there's barely an organization anywhere in the world that has not been, or will not be affected by, emerging technologies. Organizations have been and will continue to transform digitally.

In 2022, organizations are projected to spend nearly $2 trillion dollars on digital transformation, according to the International Data Corporation. Yet as important as the technology is, creating a strong culture is critical. And whilst it's true that tech giants like Amazon, Google, and Netflix have business models founded on seminal technologies, these businesses are also founded on incredibly strong cultures. 

In a recent study of digital transformations, BCG found that organizations that focused on culture are five times more likely to achieve breakthrough performance than those transformations where companies neglected culture. MIT Sloan Management pointed out that, for many legacy companies, culture change is the biggest challenge of digital transformation. There is no such thing as a digital culture. Digital is another, often key, component of an organization's strategy and operating model. The organization's culture needs to be shaped so as to embrace and accelerate digital and innovation as critical topics. 

Your culture can accelerate digital transformation and innovation more broadly through the following principles of culture shaping. The first principle is purposeful leadership. The second principle is personal change. The third principle is broad engagement, and the fourth and final principle is systemic alignment. 

So, purposeful leadership. We know that organizations become the shadow of their leaders. In many cases, the most senior leaders will not be the ones actually interacting directly with the very technology that will deliver the strategy; but, in the same way, that leaders sponsor their organization strategy, they must authentically sponsor the culture that will deliver this. Does your organization have a crisp articulation of how digital will deliver your purpose and strategy? What are the specific goals and key results you are aiming for? Are you clear on how all of your digital priorities and projects come together? What is the talent requirement to deliver these and how will your culture enable all of the above?

We know that purpose motivates people and there's a genuine opportunity for digital transformations to explicitly deliver against all elements of the treble bottom line: people, profit, and the planet. If in doubt, the CEO and executive team should overstretch in creating a clear and compelling case for cultures accelerating digital transformations, with the CHRO and digital or technology leader playing specific, active roles. The second principle is personal change. Starting with the most senior leaders, people need to make old habits and mental models into new ones and make new personal behavior changes. You can help people do this by sharing a tangible “from-to” that outlines new behaviors, mindsets, and ways of working. We talk about leaders becoming digital triathletes, which means simultaneously being a digital strategist, a digital innovator, and a digital driver. There's a requirement for all leaders to change how they think and behave because, if they don't, the shadow of their leadership will weaken the culture required to accelerate the digital transformation.

The third principle is broad engagement. In any culture transformation, velocity matters. How can you create energy and excitement around your digital transformation and the culture required to deliver it? We know that the faster the whole organization engages in a culture transformation, the higher the probability the culture will shift. Every employee is, and will increasingly be, affected by new digital technologies in how they deliver their work, so every employee needs to be immersed in experiences and content to enable them to make personal changes. And whilst you want consistency in the desired “to” mindset and behaviors, these will need to be brought to life to reflect the local context.

For example, what is needed in a customer-facing role will be different from what is needed in a function. It's often a good idea to lean on those employees already living digital mindsets and behaviors. For example, data scientists, customer experience designers, and business analysts can often help engage, lead, and coach the broader population. The fourth principle is systemic alignment. All transformations are a mixture of what can be described (metaphorically) as software and hardware. The software would be the specific mindsets, behaviors, and habits we've mentioned, and the hardware would be the organizational structures, systems, and processes. In order to align and reinforce the desired culture, organizational hardware will need to be tweaked. 

Additionally, you might consider, rather than limiting people to working only in their business or function, the opportunity to accelerate collaboration more fluidly by resourcing projects across an organization. Rather than measuring people only on what they've achieved, what's the opportunity to appraise people based on what they've tried and learned? And rather than having systems where it's hard for everyone to access data, what's the opportunity to liberate an organization's data to make it accessible to all? 

We also know that it's helpful to get more specific on some of the critical behaviors and traits that we see in cultures that are successful in accelerating digital transformations. Whilst these will obviously vary from sector to sector and depend on where an organization is in its strategic cycle—if they’re a disruptor, an early adopter, or a fast follower—there are some common characteristics that we see. For example, learning. Testing and learning are driving feedback across an organization. Being data-obsessed: asking better questions of data and having good data at the very heart of business decisions. Being empowered: enabling people to make the highest impact, regardless of where they sit in an organization. Disrupt and challenge: not accepting the status quo and continuously seeking better. And, finally, collaboration: building on the collective wisdom across and outside an organization.

Organizations that truly see culture as an enabler of digital transformations will see themselves on the right side of the odds for success. Even the mighty Amazon is clear on what is required for successful digital transformations. They say: “lead with culture, enable with technology.”

Going to market – Jenni Hibbert

Jenni Hibbert: Hi, I'm Jenni Hibbert and I serve Heidrick & Struggles as our Global Managing Partner and Head of Search Go-To-Market, based out of our London office. A focus on culture and inclusion in the workplace is more critical now, I think than it's ever been previously. Here at Heidrick & Struggles, we've been a leading voice exploring the topic of company culture for many years. 

But of course, our firm was founded as an executive search firm, and, for a long time, we thrived with having that sole focus. But as we discovered through search, some leaders didn't succeed in their roles. When we talked with our clients about why quite often, it came down to a vague discussion about quote-unquote fit. Nobody talked about (and in fact, few people knew) what that really meant.

Today, we know what it means. It means culture impact: how leaders influence an organization's culture, whether they influence it positively or negatively. We began to acknowledge the importance of thinking in a serious and formalized way about how a leader would affect an organization's culture, and how an organization's culture affects a leader's performance.

Our research tells us that CEOs now truly do see how culture is tied to financial success. This is a connection that simply wasn't being made 30 years ago when culture was less understood. In fact, a recent survey that we compiled of CEOs around the world showed us that 82% of them had made culture a priority over the previous three years. That's such a difference from where we were 10, 15, or 20 years ago. We know today that thriving cultures are sustained when leaders understand that culture is a journey in its own right and not a destination. 

In some of our work with leaders at many of the leading fortune 500 companies, we use four key principles of culture to help drive success. The first is to ensure that organizations are utterly intentional, and that they build a purpose-driven, intentional commitment to culture. The second focus is very specifically on the accountability of the CEO in building a culture. That CEO needs to commit to personal change, to becoming an authentic leader who demonstrates a growth mindset and inspires others across the organization to do the same.

That takes me to the third principle, which is, beyond the CEO, there needs to be broad engagement, where there's a sense of purpose and values that permeate every corner of the organization, if possible. And then of course, beyond that, you need to create systemic alignment, because a culture can't thrive if an organization's systems and processes are rigged against it. 

The pandemic really demonstrated the ability to implement these four principles was absolutely critical in challenging times. Without these four principles, some element of how you build a thriving, healthy culture was being undermined. 

I'd like to double-click for a second on the role of the CEO or the leader. As I said, successful organizations put the CEO's personal commitment to culture front and center, and that CEO is held accountable on an ongoing basis for their shadow across the organization. Two attributes came to the fore during the pandemic, in terms of personal attributes that we saw great CEOs or leaders demonstrate.

The first was agility. I think a lot has been written and spoken about in terms of the need for leaders to be agile. The second is empathy. We really saw that empathy is probably the one thing that separated great leaders from the rest—great leaders who really knew how to build an inclusive culture. There were just so many complexities that people and employees and organizations were dealing with post-COVID, whether it was grief, physical and mental health, burnout, well-being, family dynamics, or social unrest. 

People were greatly impacted by what they were feeling. Ultimately, it became too much of a drain for employees to hide who they were or how they were feeling on an ongoing basis. They wanted to be able to show up authentically and they needed permission to feel as though they could do that by their CEO doing the same thing. 

I'd love to close on an example that I've seen of a leader leading by example: holding themselves to standards, casting a shadow that they wanted to be displayed throughout the organization that had a material impact on performance.

The example I'd like to highlight is a top financial services business that brought in a fantastic female leader, first as its CFO, then about 18 months later appointed to be its first female CEO—in fact, shortly before the pandemic. In her first couple of months in office, she prioritized building an honest, transparent, low-ego culture. That truly made a difference from the word go. One of the things she did was listen very closely to her teams and role-modeled the need to be open. One of the things that she heard when it came to inclusivity is, whilst they felt they had an inclusive culture, the experience of their black employees was actually very different. 

This, of course, wasn't easy to admit for people. They wanted to believe that their culture was as inclusive as they felt it was. But her approach—listening, being transparent, and reacting to the feedback in a way that demonstrated that they could change—role-modeled the behaviors that she wanted to see in the organization. And then, when she hit the pandemic and she acknowledged at the start that culture was probably the biggest priority for her throughout the pandemic, she'd already set the bar for those behaviors that she wanted to see role modeled. And, for the most part, they were. This had a material impact on how she managed to retain talent and drive business performance throughout the pandemic.

Ian Johnston: Culture is not a program or an initiative. It's a drumbeat that runs through an organization—an authentically-shared, socially-meaningful purpose that captures people's hearts and minds and becomes the core of authentic organizational culture. 

Intentionally developing your culture, linking purpose and strategy, and institutionalizing shared values, behaviors, and norms serve as a powerful launchpad for alignment and acceleration.

Leaders who shape culture this way continually articulate and activate deliberate actions to maintain alignment of the culture with their growth strategy. They are purposeful, intentional, and open to personal change, and they empower everybody in the process to be unafraid of what the future may hold.

Looking forward, as leaders seek to design and deliver on their strategies—whatever those strategies are and however quickly they change—clear and powerful purpose will help them create inspiration, alignment, and trust for all stakeholders, particularly in the environment with all of the significant commercial and geopolitical problems that we face at the time of recording this.

Shaping a thriving culture around their purpose will help leaders create meaningful, innovative, inclusive places of work that will both attract and retain the best talent—whatever changes come next, regardless of the industry where people are working, or whether those changes are planned or a surprise. We hope you enjoyed this exploration of culture. Thank you so much for listening.

Thanks for listening to the Heidrick & Struggles Leadership Podcast. To make sure you don’t miss more future-shaping ideas and conversations, please subscribe to our channel on the podcast app. And if you’re listening via LinkedIn, Twitter, or YouTube, why not share this with your connections? Until next time.

About the speakers

Anne Comer (acomer@heidrick.com) is a principal in Heidrick & Struggles’ Toronto office and a member of Heidrick Consulting.

Priya Dixit Vyas (pdixitvyas@heidrick.com) is a partner the London office and a member of Heidrick Consulting Culture Shaping and Diversity & Inclusion practices.

Rose Gailey (rgailey@heidrick.com) is a partner in the Costa Mesa office and the global leader of the Organization Acceleration and Culture Shaping Center of Excellence.

Jenni Hibbert (jhibbert@heidrick.com) is a partner in the London office and the global managing partner of Search Go-To-Market. She also serves on the firm’s Management Committee.

Adam Howe (ahowe@heidrick.com) is a principal in the London office and the leader of Heidrick Consulting’s Organizational Simplicity as well as co-leader of the Digital Transformation offering in Europe & Africa.

Ian Johnston (ijohnston@heidrick.com) is a partner in the London office and a member of Heidrick Consulting’s global leadership team.

John McKay (jmckay@heidrick.com) is a partner in the Costa Mesa office and a member of the Culture Shaping Practice.

Holly McLeod (hmcleod@heidrick.com) is a partner in the New York office and a member of the Culture Shaping Practice.

Dustin Seale (dseale@heidrick.com) is a partner in the London office and the managing partner of Heidrick Consulting in Europe.