Transformational Leadership – Post #3

Posted on 25. Jan, 2016 by in Gary's Blog

Most organizations are feeling a great deal of pressure to crack the code on how to create a positive work culture to navigate these turbulent digital age times. Here are some interesting factoids that provides context to this situation:

• The influence of Digital is everywhere; it’s not going away. Even the Pope is tweeting!
• In a Work Culture Survey by the Katzenbach Center, they reported that 84% of respondents believe that culture is critical for business success; 60% think it’s more important than strategy; but only 35% think their company’s culture is effective.
• Hay Group determined that companies in the top quartile of employee engagement generated revenue growth that was 2.5x higher than companies in the bottom quartile. In the same study 90% of senior leaders said that an employee engagement strategy was key to business success, yet fewer than 25% had an active engagement strategy.
• A Harvard Business Review study found that only 24% of respondents reported they were actively engaged in their work.
• A Forbes Study showed that the stocks of companies with high customer engagement grew 5x faster than the stock of companies with low customer engagement.

Given these workplace realities, we believe organizations need to make a dramatic shift. Instead of focusing primarily on shareholder value they must put more attention on creating a new and innovative work culture. A culture that is better at engaging both customers and employees is a more powerful way to increase shareholder value.
The two key questions are:

• Why is focusing on shareholder value so much more common than focusing on work culture?
• What does an organization have to do to successfully shift their focus?

The Focus Issue

Focusing on shareholder value is a much more measurable leadership task that has a long history of acceptance. Executives typically know what actions to take to impact the revenue and cost levers of their company. They hire more revenue generators and they take steps to reduce headcount and limit expenses.

Building and sustaining a winning culture is a radically different endeavor. It requires a skill set that is uncomfortable for many senior leaders. There is no “right way” to:

• Create a high level of trust where it is safe to push back and raise objections
• Find the right level of transparency and open communication
• Inspire smart-risk taking, innovation and experimentation
• Build in work/life balance
• Make professional development an important priority
• Encourage cross-functional collaboration and teamwork
• Provide effective rewards and recognition

How Do You Make The Shift Work?

First, there needs to be agreement at the C-Suite level about what “culture” is. It can’t be a “thing” or a string of well-crafted words that suggest a particular way of operating.
The culture consists of formal and informal “guiding principles” that shape the way individuals in a particular organization operate internally and externally. It needs to be a set of behaviors that leaders and employees work by and are held accountable for.

Next, the questions becomes how do you implement the culture. The answer is there is no foolproof formula. All organizations are different; therefore they must create their own unique implementation strategy. That said, there are several steps we can recommend to address the culture implementation issue:

Senior Team Offsite: The senior team sets aside time to determine what is currently working and what is not working in the culture. They work together to reach a consensus on the specific behaviors they believe are essential for future success. Then the team builds an action plan for integrating these behaviors into the daily fabric of the organization.

Feedback: Before implementing the action plan, senior leaders actively seek feedback on the cultural values from key cross sections of the organization. This is a critically important step, because it builds internal commitment and ownership beyond the C-Suite for the agreed-upon behaviors. Feedback in hand, senior leaders regroup and make revisions and course corrections as necessary.

Communication Plan: The business rationale for having specific cultural values is communicated to the entire organization.

Senior team leaders implement their personal action plans: Senior leaders meet with their teams to clarify how the culture in their department will operate going forward. They also communicate their personal commitment for living the values and their expectations about making them come alive in the organization.

The proof is in the pudding: What happens after the roll out is what really counts. Do the senior leaders stay committed to living the values and provide feedback to individuals who don’t?

We believe a shift in strategic focus will significantly improve an organization’s performance and its ability to innovate and experiment in this era of ongoing change.

➢ At CDL Consulting, Joe Collins and Gary Schuman work extensively with C-Suite Leaders to help them navigate the leadership issues involved in culture change and innovation.

Links:

1 Katzenback Culture Study: http://www.strategyand.pwc.com/reports/cultures-and-change-infographic

2 Hay Group Study: http://www.haygroup.com/downloads/us/studies reveal efforts to engage employees at work and beyond.pdf

3 Harvard Business Review Study: https://hbr.org/resources/pdfs/comm/achievers/hbr_achievers_report_sep13.pdf

4 Forbes Study: http://images.forbes.com/forbesinsights/StudyPDFs/SAP_Customer_Engagement-REPORT.pdf

Comments are closed.