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Embrace the ‘C’ word to drive success

Written by Russell Quinn

January 13, 2022

Don’t be perturbed by the headline – ‘Culture’ is not a dirty word!

An organisation’s culture is central to its success and is an accepted and important notion today. However, this wasn’t always the case.

The term company culture came to prominence in the early 1980s and was more widely known by the 1990s, often used to describe the character of a company.

But the term “organisational culture” was first introduced way back in 1951 by renowned and oft-contentious Canadian psychoanalyst and management consultant, Dr. Elliott Jaques in his book The Changing Culture of a Factory.

So, it’s certainly not a new concept, nor is it a fad or a flippant philosophy.

Many would be familiar with the famous quote from noted management consultant and writer, Peter Drucker: “Culture eats strategy for breakfast”.

Of course, he didn’t mean that strategy wasn’t important – the opposite, in fact – but the intent of this contemporarily ubiquitous management philosophy is that a strong and empowering culture is more likely to lead a company on a positive path to success, rather than sticking to strategy alone.

Taking this a step further is award-winning author and MIT Professor, Bill Aulet who opined: “Culture eats strategy for breakfast, operational excellence for lunch and everything else for dinner”.

A company’s culture, whether viewed as good or bad, can differentiate it from competitors, generate brand and reputation impacts among customers and stakeholders and, perhaps most importantly, influence employee engagement and job satisfaction.

Employee engagement is of particular importance as increasing numbers of employees – and people, generally – seek purpose from their work and their lives. 

Trust is fundamental to building and maintaining positive relationships with stakeholders, and it’s the cornerstone of high-performing teams.

Communication is the conduit to establishing that trust, and authentic internal communication is the key enabler of a strong corporate culture and vital to delivering a powerful cultural change program.

Meanwhile, culture amid the chaos of COVID-19 has become even more critical. 

This is especially true when one considers the current environment, including prevailing economic and market factors, and apparent emerging trends, such as ‘The Great Resignation’.

Global management consulting group McKinsey & Co has previously outlined why culture matters – quite simply, culture correlates with performance: research on more than 1,000 organisations and three million individuals confirmed top quartile cultures (applying McKinsey’s organisational health index) generate a return to shareholders about 60% higher than median companies and 200% higher than those in the bottom quartile.

Furthermore, culture is inherently difficult to replicate, providing a distinct competitive advantage and enabling organisations to adapt more quickly in an ever-changing world. Unhealthy cultures can also lead to underperformance or possibly even worse outcomes, as any number of corporate collapses can attest to.

And just a few weeks ago, the global firm put out new research about how businesses can combat the Great Attrition, speaking to the ‘Great Resignation’ and specifically the 20 million Amercians who have quit their jobs since April 2021 (many leaving without another job to go to).

McKinsey’s research confirmed much of the attrition is being driven by a poor employee experience; employee-manager/leader relations remains one of the strongest predictors of job satisfaction, employee experience and retention.

This aligns with a widely accepted business paradigm, née cliché, that employees don’t leave bad companies, they leave bad bosses. Poor management is understood to be the main contributor to employee turnover as people generally join good companies and leave poor leaders.

“Therefore, organisations should make work more fulfilling by tapping into a sense of purpose, creating meaningful work, and ensuring that employees feel valued by their business and boss,” says McKinsey.

While there are certain factors at play influencing the Australian labour market at present, it isn’t at the scale of resignations being seen in the US, as evidenced by the latest employment data and anecdotal evidence from local businesses nationally.

However, others argue that the Great Resignation is poised to, or may already be hitting Australia, with multiple studies showing that approximately 40% of Aussies are at least open to new roles.

As the New Year kicks off, some bosses are likely mindful of the “traditional” January exodus that can occur across jurisdictions – particularly western democracies – as some employees seek a fresh start afforded by the resolutions made at midnight on 31 December.

When you take all of that into consideration, along with varying degrees of border closures across Australia – only now beginning to open up, with Western Australia the obvious laggard – and the nation’s looming skills shortage as the economy recovers from the pandemic, it clearly paints a picture of the importance of company culture in creating the ecosystem required to attract and retain key talent and, in doing so, generating strong performance.

  

The role of Communication in developing and maintaining a Positive Culture

One of the central tenets of organisational culture and change management is that culture is leader-led, and any desired cultural change starts at the top.

Communication from leaders to managers to employees is paramount in developing a positive culture or affecting the right cultural change program. But internal communication needs to go both ways in terms of receiving and actioning relevant feedback from all levels of the organisation.

As such, internal communication must be relevant, timely, transparent and consistent, to create the desired outcome or impact.

The pandemic has seen significant change in organisations deployed rapidly – somewhat unintentionally, in many cases – enhancing awareness of and attention to this vital component of modern-day organisations.

Business leaders and decision-makers need to recognise their current situation, acknowledge the required change and embark upon it dutifully and diligently.

Seeking relevant professional advice and strategic communication support is prudent in considering any change program, be it a major game-changing program or a mild tweaking of the current cultural construct.

Organisational culture is defined by the collective norms of behaviour exhibited by the individuals within an organisation, from the top down. It is not – and can not be – about empty talk or something nice on the wall.

There are plenty – probably thousands – of quotes about company culture from some of the world’s biggest and best-known names in business.

But this one, from Louis V. Gerstner, Jr, the former chairman and CEO of IBM, is especially valid:

“Until I came to IBM, I probably would have told you that culture was just one among several important elements in any organisation’s makeup and success — along with vision, strategy, marketing, financials, and the like… I came to see, in my time at IBM, that culture isn’t just one aspect of the game, it is the game. In the end, an organisation is nothing more than the collective capacity of its people to create value.”

Gerstner is widely credited with turning around the fortunes of the “International Business Machines” juggernaut, through the 1990s and into the 2000s.

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