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The recent announcement of the Financial Reporting Council’s (FRC) Corporate Culture and the Role of Boards report is one of the most robust demonstrations yet of the relationship between corporate culture and long-term business success in the UK. It underlines the importance of recognising the value of culture, demonstrating leadership, being open and accountable, embedding and integrating values, aligning values and incentives and exercising stewardship.
Culture change, of course, does not happen overnight and is one of the stiffest challenges a business leader faces. The starting point is a root and branch assessment of how the organisation is perceived internally and externally. Also crucial is identifying what the organisation wants to be and where it is heading. What is its over-arching mission? Is it to be market leader in its field or ranked number one for customer service – or both perhaps?
Having identified the ‘what’, the next step is the ‘how’ and this is where values and behaviours come into play which are instrumental in creating the new culture. It’s impossible to change organisational culture without remoulding the collective behaviour of a workforce. Define the values you want the company and employees to live by. Trust, integrity and respect are clearly going to figure in the value set of any ethical organisation but also consider what might make the company unique. For instance, the notion of ‘boundarylessness’ was all the rage more than a decade ago. So think beyond the accepted norms.
Sadly, many values don’t get much further than a chart in the boardroom or company website. Leaders must exhibit behaviours consistent with the values and culture at all times and ensure managers of all levels embed them into their actions and encourage their teams to do the same. Their effectiveness at doing this can be linked to performance appraisals.
Employee reward programmes must also be aligned with the values. Put together a marketing and communications programme to communicate the values and mission to the workforce and what they mean. And as an authentic leader, it is essential you have an active role in this and are highly visible to employees.
Also examine processes, the working environment and equipment. If you want to be perceived as progressive and leading edge but employees are struggling to do their jobs with substandard technology, you won’t convince anyone. Culture change impacts every area of the organisation.
Any culture change programme must also be allowed sufficient time to bed in and work but be certain to monitor progress carefully. Conducting employee surveys will provide an insight into how people are feeling about the company and its leadership and also consider the use of more immediate pulse surveys.
Also keep tabs on what customers are saying about the organisation on social media as well as in the press. Consider whether your own image and reputation is in line with the company culture to the outside world. If you want to be number one for customer service and sector magazines and websites are asking you to contribute thought-leading articles on the subject, it’s an encouraging sign.
The central message from Sir Winfried Bischoff, chairman of the FRC, is that a healthy corporate culture leads to long-term success by both protecting and generating value in the UK economy. He urges employers to have “a consistent and constant” focus on culture rather than wait for a crisis. “A strong culture will endure in times of stress and change,” he says.
Given the worst excesses of corporate behaviour we’ve been exposed to in recent years and the continued unpredictable times in which we live, these are wise words indeed.
Link to Financial Reporting Council report here
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