Five Things to Consider When Creating a Company Culture

In an insightful new report, Spencer Stuart zeroes in on how businesses these days look at culture as well as key questions that organizations should consider when evaluating their own value systems.

May 8, 2018 – Human resources executives and recruiters have been using the term “cultural fit” – generally defined as the ability of an employee to fit with the core beliefs, attitudes and behaviors that make up an organization – for a decade or two. And culture shaping is now seen as one of the most important drivers to achieving competitive advantage among companies. Most search firms, including boutiques, now offer some variation of it to their clients.

Why is culture such a hot topic? An ever-growing body of research points to the positive impact the right organization culture can have in enabling positive financial, employee and customer related outcomes, while recognition of the destructive impact of cultural dysfunction is growing. As a result, the topic of culture has attracted more interest among business and HR leaders than ever before, according to a recent report by search consultants Sahiba Singh and Samantha Mark of Spencer Stuart.

“Leaders and leadership teams are now even being measured and held accountable for their impact on organizational culture, arguably as they should be,” the report said.

“At Spencer Stuart, culture underpins many of the discussions we have with leaders – not only when we are brought on as consulting partners for targeted culture related interventions, but also in broader conversations about executive search, assessment, development and succession, all of which are inextricably linked with the organization’s current and aspirational culture,” the recruiters said.

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Spencer Stuart looked closely at the nature of these discussions and found some common themes around the thinking of business and HR leaders on the topic of culture, including these:

The penny has dropped. Few leaders today need convincing about the importance of having the right culture in achieving organizational strategies. With the ‘why’ settled, they have largely moved on to talk about the ‘what’ and the ‘how.’

The language for talking about culture remains elusive. Lack of commonly understood, shared vocabulary and frameworks to describe culture often leads to ambiguity and inconsistency in the way it is understood and explained.

Different people, different perceptions. When asked to identify the most dominant dimensions of the culture in their organizations, it is surprising how frequently even highly tenured members of the same leadership team present misaligned or divergent views, said Spencer Stuart.

Striving for the ‘ideal culture.’ Most leaders today display an intellectual appreciation for the fact that organizations can succeed with vastly different types of culture, according to the report. “Yet, the subtle glorification of certain cultural dimensions is evident in most such conversations. Infusing greater learning, innovation and agility into their cultures – particularly inspired by organizations like Google – is a request we frequently come across,” Spencer Stuart said.

A fragmented, rather than integrated approach to culture. A large number of companies today think about their culture in some context or the other, whether it’s understanding the potential culture fit of new hires, focusing on cultural integration in an M&A situation or aligning cultural strengths to the employer value proposition. “However, few organizations look at culture in a holistic manner, taking into account all the ways in which it manifests itself, evolves and changes over time,” the search firm said.

The Idea of Cultural Fit Might Be More Myth than Reality
Human resources executives and recruiters have been using the term “cultural fit” – generally defined as the ability of an employee to fit with the core beliefs, attitudes and behaviors that make up an organization – for a decade or two.

In the last few years, Spencer Stuart has partnered with a number of organizations across various industries, helping them assess, articulate, build or transform their cultures. In the report, the search firm looked back at these and identified five key questions that organizations concerned about their culture must think about:

1. Are we thinking of culture as a magic wand?

The recent buzz in management literature around the topic of culture has led to a situation in which culture is at once blamed for, and seen as solution to, almost every organizational performance issue. “While the criticality of culture shouldn’t be understated, it is important for organizations to also think through other factors that may have the same or larger impact on the problems they are seeking to solve,” Spencer Stuart said.

2. Do we really understand our current culture?

It is commonly known that leadership teams often lack alignment in the way individual leaders perceive and describe the culture of their organizations. “It should come as no surprise, therefore, that there often exist significant differences in the ways cultures evolve and get manifested across different locations, functions, etc., within the same organization,” said Spencer Stuart. A clear appreciation of these differences and the reasons contributing to organizational sub-cultures is essential for gaining a nuanced view of where things stand currently.

It is equally important to distinguish between the articulated and the actual, emergent culture, which can be very different. “A formal, structured assessment of the current culture, therefore, is a critical first step in any culture-related intervention,” said the firm.

3. What is the impact that our culture is having?

In their desire to adopt elements of what they perceive to be the “ideal” culture, Spencer Stuart said that many organizations skip the important step of considering how the current culture is affecting various organizational outcomes and, by extension, how changing the culture would impact those outcomes.

4. What should our culture be like?

Although Spencer Stuart conceded that there is no simple answer, the firm said it encourages organizations to consider the following when thinking about the culture styles they want to emphasize: First and foremost, the culture must always be aligned to the strategic goals a company is trying to drive. “Imagine a regulatory or fraud-prevention body with a culture emphasizing enjoyment and learning, over safety and order,” the firm said.

Related: Why Your Culture Is Your Brand

It is always easier to build on what you have; so leverage and reinforce the strengths of your current culture instead of trying to change everything. “Culture has staying power; use yours to your advantage,” Spencer Stuart said. Always consider the trade-offs and unintended consequences of any change.

5. What does cultural transformation entail?

While far from all-inclusive, Spencer Stuart sees the following as fundamentals that organizations embarking on cultural change must consider:

A. Obtain the buy-in and alignment of stakeholders early in the process – ideally at the point of identifying change priorities. A process of open debate and discussion to jointly agree on the way forward helps drive the engagement of the leadership team and other stakeholders with the change agenda.

Related: Culture and Brand Seen As Top Advantages When Recruiting Talent

B. Synchronize actions and activities around change. Stand-alone initiatives, no matter how impactful, cannot drive sustainable culture change. “Organizations must think through the changes required in all aspects, to move the needle on culture – the actions of their leaders, the stories that are told in/about the organization, the systems and processes in place, and lastly the capabilities and behaviors of employees,” Spencer Stuart said.

Influencing Workplace Culture Through Employee Recognition
As employers look for ways to deal with the challenges of low employee retention and high turnover, a new survey by the Society for Human Resource Management (SHRM) and social recognition solutions provider Globoforce shows more orgs. are tying employee recognition efforts to their core values.

C. Understanding the readiness of the leadership team for driving the change agenda. The recruiting firm noted that much research has shown that leaders have a disproportionate influence on the culture of their organizations and teams. “By extension, leaders whose personal leadership styles and cultural preferences are closer to the cultural dimensions an organization is trying to reinforce, and those who display higher change agility, are likely to be early adopters of the change,” Spencer Stuart said. Structured assessments of the leadership team on these elements can help to identify the change agents within the company, and highlight when there is a need to bring in fresh blood and diverse perspectives and styles to complement existing leadership styles.

D. Ongoing measurement of the progress. Contrary to the popular belief that culture is intangible and tough to measure, experience shows that organizations that are serious about culture transformation are very disciplined about putting in place specific goals and metrics and regularly taking stock of the progress against these, said Spencer Stuart. In identifying these objectives and metrics, the firm said it encourages its clients to measure the outcomes (i.e., the actual change in culture after a certain amount of time), and also the roadmap, by having specific, measurable targets against the various actions identified for driving the desired cultural changes.

Related: Work Culture Seen as Leading Motivator among Senior Executives

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Will Schatz, Managing Editor – Hunt Scanlon Media

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