Updated: Mar 20, 2019
Right now we are seeing high profile and successful businesses around the world come under scrutiny because of issues stemming from poor culture. Incidents of non-compliance, breaches of legislation, significant breakdowns in communication, increasing numbers of dissatisfied customers, sexual harassment and bullying are being publicised with significant consequences to the businesses involved, including loss of reputation.
These issues are all indicators of a negative organisational culture and as the fallout of complaints and investigations continue, it’s a timely reminder that CEOs and boards have two options when it comes to addressing culture: to treat it as something they will be forced to deal with if and when things go wrong; or treat it as something they can be proactive about and use as a tool for better performance.
For those organisations that fall foul of complaints, implementing new frameworks and policies around workplace culture is initiated as a form of defence against further loss of reputation and financial costs.
For those that are ahead of the game though, and are already working to implement strong positive workplace culture as a priority, they will enjoy less risk and multiple gains in terms of reputation and performance.
Get on top of culture before it gets on top of you.
Anecdotal evidence from my discussions with directors and CEOs indicates culture remains an area they aren’t sure how to address or one they don’t think they need to. This is an attitude that is at best uninformed and at worst, risky. Ignoring organisation culture is to leave the door open to the very issues listed at the beginning of this article and leave the business vulnerable, or at the very least, falling short of potential.
We’re publicly seeing the growing importance of culture as an integral workplace priority, with organisations increasingly being held accountable when things go wrong and governing authorities moving to further penalise confirmed breaches.
Expectations of ethical and positive workplace standards are not likely to subside and in fact, only increase into the future.
Now is the time for boards especially to ask the question: what is our organisation’s culture and how is it being implemented and measured?
Progressive companies with an effective workplace culture framework haven’t waited for things to fall apart first and as a result, you won’t see their names in the headlines for all the wrong reasons. Taking the lead on culture
When an organisation has a well-planned and well-executed culture strategy and framework, it sets clear boundaries and expectations for all staff, from the top down. It is for CEOs and managers to lead by example, and to ensure that example filters down through all levels and sections of an organisation.
The effectiveness of a culture framework comes down to how it is communicated through the organisation, and how it is role-modelled and lived within the organisation.
When done well, culture will create cohesive team environments where there are clear understandings of the group purpose, vision and values. It enables open communication and allows for issues to be resolved within the business rather than hidden or avoided. It’s the difference between a code of conduct being a mere document filed in the HR office, versus all staff being very clear on what constitutes acceptable behaviour towards colleagues and clients.
A company with a well-working culture framework isn’t one where employees and managers turn a blind eye to legislative breaches, harassment or unethical practices, but is one in which employees feel safe in reporting issues and confident it will be treated seriously.
When every person understands why the business exists, how they contribute to the business, and what’s OK and what’s not OK, it creates an environment of accountability. Organisations that do this well will not only benefit from improved employee engagement, customer satisfaction and fewer consequences arising from complex workplace complaints but avoid the significant penalties for corporate and financial misconduct.
Prevention is far better, more cost effective and socially responsible than the cure, so taking the lead on culture is a win-win for the organisation as a whole as well as the individuals who work there.
A good question for boards and CEOs to ask themselves is: what will be the trigger for culture change in our organisation? Will we wait for a problem to occur, or take the lead now?
No organisation is immune to the effects of culture - whether it’s a positive or negative one.