Can your organization sustain your culture as you evolve?

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Highlights of history

  • Adding layers of leadership can fracture organizational culture
  • Managers are perfectly positioned to unify the work culture
  • Provide management development that allows managers to transmit the culture

The big challenge for healthy and growing organizations, especially those moving from startup to scale, is to stay true to the vision of their founders while adapting to change. The expanding real estate footprint, technological capability, reach of sales teams and human resources is intimidating, but leaders know that the heart of the challenge is organizational culture. The ability to create and develop a culture is what makes your organization truly unique and increases its chances of sustainability and long term success.

Gallup defines culture as “the way we do things here,” and we’ve found that the more aligned employees are with the organizational culture, the better they perform. Alignment is simple at first, when founders and managers work hand in hand to advance the founders’ values, attitudes and vision – the unspoken rules of “how we do things” – that inform every aspect of it. Culture.

But as businesses grow, layers of leadership form and you start to lose direct influence over people’s behavior, social expectations, and decision-making. This is the natural result of handing over the reins of culture to local managers – and in many cases newly hired – as leaders should as an organization grows.

The big challenge for healthy and growing organizations, especially those moving from startup to scale, is to stay true to the vision of their founders while adapting to change.

Managers become the main transmitters of culture. They link your aspirations to the day-to-day employee experience. And Gallup’s work with clients – including and especially those in rapid growth stages – shows that these managers are rarely equipped to catalyze organizational culture.

This is how companies become a collection of mini-cultures. When they do, the culture the company was founded on gets lost in the noise.

Loud managers

“Noise” in this case means unwanted variability. Invented by Gallup lead scientist and Nobel Laureate Daniel Kahneman, Olivier Sibony and Cass Sunstein in their book, Noise: a flaw in human judgment, a business becomes noisy when people’s decisions and behaviors do not match with each other, with management’s strategy, or with the culture.

Leaders may not even know what is going on. When the authors performed a “sound audit” of a financial asset management company, the authors found a 41% variation in the valuations of the actions of senior executives.

In a noise audit among insurers, their executives estimated that insurers’ decisions would vary by about 10%. In fact, it was 55%, and one CEO estimated that the noise level had cost his company hundreds of millions of dollars. And the authors of the book say the costs of cumulative decisions don’t cancel out – they add up.

Managers become the main transmitters of culture. They connect your aspirations to the day-to-day employee experience.

Managers are vulnerable to noise because they are human, and humans react to their environment, are motivated by their unique CliftonStrengths, and are subjectively subjective. And “there can be a great deal of noise even in the judgments of competent and well-trained professionals,” Kahneman, Sibony and Sunstein wrote.

It’s important to note that variability isn’t always a bad thing. This can be a source of innovation, and even conflict can drive business results if the disagreement is handled properly. However, your managers hold the reins of your culture as you grow up – and the noise fractures your culture.

So, to keep your culture cohesive as you evolve, managers must be developed to be effective cultural conduits. They will lead better performing teams, but they will also eliminate jagged edges of team variance and reduce overall organizational noise.

The answer: develop managers first

The best place to start is to develop your managers as cultural ambassadors. At a minimum, they should know:

  • communicate, demonstrate and prioritize the organizational culture and make it relevant on a daily basis
  • help team members understand how their daily contributions relate to organizational culture
  • recognize and reward performance in a cultural context
  • help team members know that they are an integral part of creating and maintaining organizational culture

It is a real job. Organizational values ​​and culture are actualized differently from person to person, team to team, and across different business functions, and managers rarely learn to coach the culture.

This is a huge problem when companies are changing rapidly – that is, when they need cultural consistency the most – but development can position companies to be successful on all the metrics that matter. Managers who develop the level of engagement of their teams, for example, obtain profitability up to 23% higher, productivity 18% higher and turnover 18% to 43% lower depending on the organization.

Additionally, companies using Gallup’s management development programs have increased employee engagement by an average of 16%. As Jim Harter, Gallup Chief Scientist for Management and Workplace Well-being, said, “When a company consistently increases employee engagement levels in every business unit, everything gets better. “

Indeed, quality development is tailor-made development – it teaches managers to use their own strengths to coach the performance of individual employees within the cultural context of their company, towards the goals of leaders. Everyone uses their own voice, but they sing from the same songbook.

Ultimately, in a fast growing business where culture is shifting beyond the reach of leaders, there is no more effective way to create cultural consistency than to train managers as capable cultural coaches. to stimulate performance and change culture.

Economy Organizational culture – and extending it

Leaders can help by clearly describing their cultural expectations – say the unsaid; write the unwritten. For example, if a culture is one of aggressive competition, collaborative innovation, or positive energy, leaders should describe what aggressive competition looks like, the ways in which collaborative innovation is practiced, or the sound of it. positive energy.

Employees and managers also need to understand the “why” behind the organization’s unique culture. Does collaborative innovation differentiate you from important customers? Do customers appreciate – and pay a premium – for unique positive interactions with all of your employees? These attributes must be explained to be updated.

Your managers hold the reins of your culture as you grow up – and the noise fractures your culture.

At the same time, highlight negative cultural practices. Evil has as much of an effect on culture as good, and it can slow your growth. So if a manager has a proximity bias, or if transactional relationships between sites grease the productivity wheels, or if a handful of high achievers carry their teams, approach it.

Ugly cultural practices torpedo coaching performances and relationships and can even undermine diversity and inclusion initiatives.

An opportunity that leaders only have once

If the process seems overwhelming, have an objective third party examine the condition of your crop. Gallup frequently performs cultural audits (Kahneman et al. May also perform “noise audits”), as companies with a collection of mini-cultures can easily succumb to noise and lose sight of executives. This happens whether an organization is hybrid, in-person, or completely remote. In fact, it happens all the time when a business gets big enough.

But this is not a law of nature. The behaviors, values ​​and social models that shape a culture can be transmitted regardless of the size of a business. Leaders need to communicate and model the cultural attributes they want – and name the behaviors they don’t want – while developing managers well.

All leaders should be intentional when it comes to culture. But leaders of fast-moving companies have a unique opportunity that no other leader has: stay true to the vision of their founders before it gets lost in the noise.

Create a unified culture that improves business results:

Authors)

Nate Dvorak is a predictive analytics researcher at Gallup.

Adam Hickman, Ph.D., is a Content Manager at Gallup.

Jennifer Robison is Editor-in-Chief at Gallup.


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