An Open Letter to CEOs and Other C-Suite Occupants
Organizational change is expected these days. But there are ways to manage major change that promote alignment and minimize employee confusion and stress.
Working with numerous leadership teams and organizations over the past 30 years, I've seen the impact of culture on employees and the company’s bottom line. Creating that connection between individual success and organizational success fosters an engaged, loyal, and committed workforce.
Do Not Treat Culture Change Lightly
Many new CEOs insist on putting their “own stamp on things.” Implicitly, this means ditching the long-established culture. They forget the company was successful at some point prior to their arrival. And that is where the disconnect begins.
Human Resources is told by the new corporate leader to implement her or his new culture, causing stress for the company’s current successful employees. These employees, who are the backbone of the company, start to question their place in the new organization. After all, whatever they were doing before under the existing culture; was working.
What Do You Really Want to Change?
When freshly minted CEOs speak about a pressing need to change an organization's culture they are often really referring to changing strategy. The rhetoric about the need for a new culture sends a confusing (and stress-inducing) message to employees.
Let’s say your new strategic focus is about shifting toward customers, mobility, agility, innovation, etc. but you are calling it a culture change. Your introduction becomes counterproductive. When employees hear about a culture change, fear spreads, especially with those who have been successful under the current culture. Employees lose clarity on the behaviours needed for success and become concerned about what will and will not change.
Tips for Successful Strategic Change
Here are some ways to strengthen the organization during a business strategy change by using culture as your foundation for success:
1. Ensure the covert and overt cultures are aligned
As I discussed here, there needs to be an alignment between the stated values of the organization (overt values) and the actual behaviours that define success (covert values). If a change in the strategy or the culture is desired, there needs to be a clear understanding of the covert culture. The authentic culture is defined by the ways in which people actually behave, make decisions, get rewarded, etc. Every time one of the stated values is broken without consequence, the employees become more cynical about the leaders. As well, every future change becomes more difficult and requires more management. By ensuring that the stated values are the authentic values, leaders are able ensure consistent communication to an employee population that trusts what is being said will happen.
2. Walk the Talk
Above all else – live the behaviours that define your authentic organizational values. Once the covert and overt values are one and the same, you must ensure that you live them every day. Your values are your code of conduct. Find opportunities to celebrate when employees embody the culture especially in difficult circumstances. Any divergence in your behaviour will cause suspicion among the employee population hurting their productivity and desire to stay. The number one suggestion we hear from employees about their leaders is to “walk the talk.” Without having consistency between words and actions, leaders create climates of cynicism.
3. Differentiate between the culture and the strategy of your organization
If you strengthen the culture by celebrating and always living your values, you will improve the climate and make execution smoother. Employee experience is the amalgam of all behaviours and processes within the organization. Leverage culture behaviours to achieve sustainable business change, leaving less of a trail of pain in your wake. Choose your legacy carefully or you will be stuck with one you didn’t choose.
4. Do not try to change the culture
The culture will not change easily. It is in the DNA of how work is successfully done within the organization. Leverage other ways to improve how work is done that can have greater impact with less stress. If there are managers who have moved away from living the values, hold them accountable or replace them. Using the existing culture as the foundation for strategic change gives your employees confidence and stability, mitigating the change management needs of the employees.
Come in, ask questions and learn what behaviours define the values. You need to absorb and listen, especially from those employees who have been around a while. Remember, culture is not transferrable from one organization to the next.
6. Reinforce the right behaviours by understanding what drives them
Your organizational design, recognition, and talent management practices drive behaviour. If you want to understand behavioural economics, examine the system around them. For example, I can’t count how many times I have seen organizations frustrated with the silos in their organization while continuing to maintain it as a functional structure. Systems drive behaviour, so choose your systems wisely.
7. Remember, culture does not change – it evolves
A change in values is going to take AT LEAST 5 YEARS. How long do you expect to be at this organization?8. Choose to change wisely or face the consequences
If you start to mess with the authentic culture of the company expect fallout. Recognize that change is associated with increased turnover and only choose the change that is necessary and appropriate for the organization.
The American Psychological Association’s 2017 “Work and Well-being Survey” found that employees who faced recent or current major change (e.g. culture change) were three times more likely to be looking for employment elsewhere and three times more likely not to trust their employer. Lack of trust in one’s employer was associated with being four times as likely to want to leave an organization, and six times as likely to be cynical or negative at work. Unless cynicism and negativity are part of the desired new “culture,” leaders will want to offer positive change that promotes less stress and confusion.
When implementing a new strategy, the key is to leverage the culture rather than dismiss it. It is to realize a change in strategy is not a change in culture. A major goal of my company is to help employees be satisfied in their careers and maximize their Employee Lifetime Value (ELTV), which is a measure of the net value over time that an employee brings to an organization. Unnecessarily changing the culture will limit the ELTV for all employees causing decrease in performance for the whole organization. Looking at culture as a stepping stone versus an obstacle is a choice that will impact your legacy and save every employee a lot of stress, including yourself.
Culture and Strategy Working Together
Let me be clear. There is a symbiotic relationship between culture and strategy. Culture is the foundation for strategy and strategy is strengthened by the culture. Culture defines who you are and strategy defines how you deliver. When culture and strategy are not aligned they both struggle at the expense of profitability. When they are aligned, great things can happen.
This is the first part of my Open Letter to the C-Suite. Part 2 will focus on what leadership should address to ensure they sustain a strong culture and company.