The findings of the 2013 Culture and Change Management Survey conducted by the Katzenbach Center at Booz & Company offer insight into one of the most important elements of running a successful company: Corporate culture.
The survey delved into more than 2,200 global participants’ views on the current situations at their companies, as well as whom they see as responsible for driving change within their firms, why they believe efforts to bolster corporate culture sometimes fall flat and what they think it takes to create sustainable improvement. Of the respondents, 72 percent worked at companies that had zero to 10,000 employees, while the remaining 28 percent hailed from firms with more than 10,000 people on their payrolls. Participants represented a number of industries, including retail, health care, finance and engineering.
How important is culture, anyway?
It can be easy for organizations to get so caught up in measurable metrics and reaching concrete goals that they forget “softer” elements, such as culture.
“It’s not that technical skills aren’t important, but they’re much easier to assess,” Mark Murphy, author of “Hiring for Attitude,” explained in an interview with Forbes. “Virtually every job (from neurosurgeon to engineer to cashier) has tests that can assess technical proficiency. But what those tests don’t assess is attitude; whether a candidate is motivated to learn new skills, think innovatively, cope with failure, assimilate feedback and coaching, collaborate with teammates and so forth.”
However, just because culture can’t be reduced to a series of numbers and precisely plotted on a chart or graph, that doesn’t mean it’s unimportant. On the contrary, cultural misalignment is a chief cause of executive recruiting failure and a heavy contributor to turnover at all levels of a firm. Even if new hires are able to successfully assimilate, weak corporate culture can still hold companies back by manifesting itself in the form of workforce disengagement, high levels of absenteeism and low productivity.
It’s understandable for metrics-focused members of senior management to feel at sea when it comes to quantifying something as slippery as culture, but chances are that they’re overthinking things. Although they might not be able to put their firms’ culture into words, meeting with potential executive candidates should give them an idea of who would – and wouldn’t – be a good fit.
“For example, a newly hired executive may have the intelligence, business experience and financial acumen to fit well in a new role, but if that same executive has an authoritarian, hard-driving style, and they’re being hired into a social culture where happiness and camaraderie are paramount, that combination is unlikely to work,” Murphy told the news source.
How do leaders view culture?
The majority of leaders who took part in the study seemed to understand the importance of culture. More than eight in 10 (84 percent) participants from across the globe said they believed it to be critical to business success, while six in 10 stated that they thought it was more important than strategy or operating model. Among North American respondents, 87 percent said culture was critical to success, while 61 percent prioritized it over strategy and operating model.
When it came to their own firms, just half of all participants said corporate culture was up to snuff, with 51 percent reporting that they thought theirs needed “a major overhaul” and only 35 percent opining that culture at their organizations was being effectively managed.
Who’s in charge of building and maintaining a strong corporate culture?
More than half (53 percent) of survey respondents held leadership positions within their companies, with 24 percent at the management level, 17 percent at the director level and 12 percent in the C suite. A total of 43 percent of respondents said CEOs and other C-level leaders should be responsible for culture change, while 42 percent stated that all employees had a part to play. In terms of the current setups at their firms, nearly six in 10 (59 percent) said the CEO and other top leaders were the ones driving change, while just 14 percent pointed to all employees.
What causes change efforts to fall flat?
Just under half (48 percent) of survey participants agreed that the capabilities needed to sustain change were not in place at their firms. They identified the top barriers as competing priorities that create change fatigue among the workforce, as well as incentives, systems and processes that do not support new initiatives.
Additionally, they listed the three top reasons for employee resistance to change as:
- Skepticism borne of previous failed efforts
- Lack of understanding as to why any kind of shake-up is necessary in the first place
- Lack of involvement in the process, which breeds disengagement
How can firms create sustainable change?
Leaders eager to address cultural shortcomings within their organizations may be tempted to take a no-holds-barred approach by implementing a battalion of new initiatives and policies, but this may not be the best way to make improvements last. Survey respondents gave the following three pointers for enacting sustainable change:
– Isolate and focus on a handful of behaviors that will have the most impact on culture, rather than blitzing the workforce with a panoply of policies that are unlikely to stick and may result in the aforementioned change fatigue
– Expand the responsibility for cultural evolution beyond the management level, getting all employees involved and making them feel accountable for driving change within the company
– Activate informal levers to make employees accountable and give efforts the best chance of having a sustainable impact (peer networks, storytelling, etc.)
What can executives take away from these findings?
Booz & Company’s research indicates that the keys to implementing successful improvements to corporate culture lie in involving workers at all levels, paring down efforts to only focus on what’s most important and making it clear why change is necessary and how employees can help.
About Caldwell Partners
Caldwell Partners is a leading international provider of executive search and has been for more than 40 years. As one of the world’s most trusted advisors in executive search, the firm has a sterling reputation built on successful searches for boards, chief and senior executives, and selected functional experts. With offices and partners across North America and in London, the firm takes pride in delivering an unmatched level of service and expertise to its clients.