How important is culture in organisational success? Recently I came across this report by the CIPD, which was a good and interesting read and which prompted this blog.
The report starts with Peter Cheese telling us that culture is integral to organisation success and to the well-being of our workforces, and acknowledging that changing or creating good workplace cultures is not an exact science, takes time, and is influenced by many variables. He goes on to say that create effective cultures we must consider our employees, their relationships with one another, the jobs that they do, and their connection to the organisation they work for. He then sets out how and why Boards must consider employee contribution and overall culture if they are to understand overall success.
I've observed organisational culture a lot in recent years, looking particularly at how two organisations that join together can have, superficially, similar cultures and organisational values, but not when one digs beneath the surface, and observing organisational culture when I moved organisations earlier this year and discovering just how drastically different places can be, even if again in the face of it things are similar in terms of what is written down.
So culture matters.
Of course there's the famous quote from Peter Drucker that culture could eat strategy for breakfast, but it's one I agree with, even if it is a bit of a soundbite. As the report says, culture is hard to articulate and measure, but is nonetheless valuable. The report gives examples of both positive and negative impacts of culture, and it's difficult to argue with these as I've seen both in action.
It's no wonder, as the report points out, that culture and governance is at the heart of some of the recent scandals in various sectors, and as I've mentioned before, culture is a very important thing to get right when assessing a potential merger or acquisition. I've seen this go wrong before, and even recently a housing group pulled out of a mega merger at the eleventh hour, citing differences in governance and culture that they felt would be difficult to get around.
How prescient of that particular Board, who have done something that I haven't seen done much in other comings together and have analysed the cultural differences, reaching a conclusion that they were almost irreconcilable rather than ploughing on regardless. The CIPD report shares FRC guidance on culture and governance from a Board perspective, but it's interesting that this guidance is from the FRC and a governance angle, rather from within the HR profession.
Of course, Boards do have a very important role to play, but not the pivotal one. There's more to establishing culture than a robust approach to corporate governance, important though that is.
I once ran a culture and values programme that was bottom up, having had some clear and unequivocal feedback from the Board that a top down approach was not the way they wanted to go. They felt the employees, and the organisations leaders, set the culture, and I'm inclined to agree, and attempts by Boards to do so through corporate governance just lead to employees leaving because of the culture, and other employees joining because it's what they want. So Boards CAN set it, but what I'm saying is they shouldn't.
And that cultural programme worked well too. It focused on leaders, employees and their behaviours, and in particular an aligned set of HR practices including pay and reward, recruitment, L&D, performance management, wellbeing and employee engagement.
I covered many of these things in my Ignite poem at #cipdnap16 on Amazing Workplaces. Basically, this was a guide on how to create the best organisational culture. Towards the end, I offered my opinion that amazing workplaces are like a house of cards, and can come tumbling down at the slightest provocation. But I also said that within HR we create culture, through those aligned practices and by living the values, so we are both the architects and the guards of this culture - we recruit and train the builders, and we sort out the troublemakers. And more.
Check it out here if you haven't seen it already.
Check it out here if you haven't seen it already.
In HR, we have a specially developed skill set and a unique organisational position and perspective which most others in an organisation don't have, and it's us who should be providing the definitive advice on culture, not a financial body.
And I finished by saying we have the power to create the best workplace and culture we've ever known.
But I also said that every workplace is amazing for someone. And that's because someone really loves working there, even if they're the only one. For them, it's great, even if large swathes of employees hate it.
And this brings me to my often used analogy of likening the employment relationship to actual relationships, something I promise again I will do a full blog on soon. You can fall in love with an organisation because of its culture, and overlook it's faults. You can equally fall out of love with an organisation because of its culture if that changes, and overlook it's positives.
In this sense, in HR, we are matchmakers. Trying to hook people up with a great culture. Swiping left, swiping right, Tinder-style.
I was going to take this analogy further and suggest that by paying people to come and work in an organisation and fall in love with it, HR are effectively pimps, but that's going too far altogether. Let's settle on HR being architects of arranged marriages.
Too many HR functions, though, don't realise the power and influence they have. Lynda Gratton once wrote that companies get the HR function they want, and advised HR leaders that if they don't have that place at the table, to leave - it's not a place they want to be in.
Maybe we as a profession should listen to Lynda. But maybe we should also look at what we can influence directly, the feeling of happiness and love (however that's manifested) at and for work and work on that.
One employee at a time.
One day at a time.
Let's start a cultural revolution.
Till next time.
Ps in other news, less than a month to the wedding now. Hen party for Katie this weekend in Liverpool, and my stag party in Birmingham next week takes in both a Test Match and evening festivities. I just hope my eyebrows have long enough to grow back before the wedding...