I recently came across the results of the 2017 study on organizational culture by Gartner. They researched how best to create a company culture that performs and drives ongoing business performance. It was an interesting read and I’d like to share the highlights with you.
Gartner found that only 31% of HR leaders agree their organizations have the necessary culture to drive future business performance. Despite the fact that 80% of organizations currently actively manage culture.
Three key gaps around company culture
Their analysis revealed companies face three issues when trying to get employees to demonstrate the needed culture.
- Knowledge gap: employees lack awareness of the culture the organization needs (69% of organizations)
- Mind-set gap: employees do not believe in the culture the organization needs or don’t believe culture matters (87% of organizations)
- Behaviour gap: employees do not engage in behaviours related to the culture the organization needs (90% of organizations)
They also found that closing one gap does not close all three. Only improving all three simultaneously had impact. Which is logical because you want employees to know it, believe it and do it!
Three common challenges
Gartner found the combination of knowledge, mind-set and behaviour to be powerful. Organizations with alignment between these factors achieve higher performance against revenue goals and hiring/retention targets, increased employee performance, and more positive public reputations.
A further analysis revealed three common challenges, each of which affects knowledge, mind-set, and behaviour:
- Few organizations really understand their culture.
- Leaders aren’t driving the culture.
- Employees can’t operationalize the culture.
To understand culture, use an employee-led diagnosis
Typically companies do a periodic – often yearly or once every two years – survey on culture satisfaction and HR or business leader interpretation. But this approach falls short due to a too narrow focus on satisfaction, outdated information and easily misinterpreted data.
To address these limitations, the best organizations are shifting to employee-led culture diagnosis by monitoring how employees experience the culture and involving employees directly in interpreting culture input.
One organization shared that they moved from measuring culture once a year to asking employees daily culture questions as they logged into their workstations. The results are available to managers in real time as long as four people on their teams participate on a given day. Leaders then have the autonomy to decide how they will use the daily feedback, but based on Gartner’s research, they will now consider empowering employees to be the ones who take action.
Make leaders drive culture by role modeling
The research identified three key elements of effective leader role modeling:
1. Say: what leaders communicate about culture (1% impact)
2. Behave: how leaders personally demonstrate the culture (5% impact)
3. Operate: how leaders manage business operations (e.g., budgets, processes, policies) in line with the culture (18% impact)
The addition of the “operate” element, which goes beyond simply focusing on what leaders say and do, reveals why so few organizations see desired results from their investments in leader role modeling.
78% of organizations rely on leader role modeling as a key component of their culture strategies
Equip employees to apply culture in their day-to-day work
Finally, organizations must help employees operationalize the culture day to day. We know organizations invest in a high volume and variety of culture communication, but that investment has failed to remove two employee-cited barriers to living the culture day to day:
- Translation barrier: employees struggle to translate the culture into the specific context of their day-to-day role.
- Tensions barrier: employees frequently encounter cultural tensions they don’t know how to address.
Unsurprisingly, the number of employees who struggle with each of these barriers increases significantly as you move deeper into lower levels of organizations. If communication efforts haven’t addressed these challenges, what will?
The best organizations remove the translation barrier by moving ownership of context-specific
translation to employees themselves. An ideal way to accomplish this is to use a peer recognition system that empowers all employees to share examples of how to live the values and show appreciation for doing so.
Removing the tensions barrier does not necessarily mean removing tensions but rather ensuring employees are equipped to manage tensions they encounter in their work. Organizations can ensure employees are equipped to do so by providing training. This way you can help employees deal with a typical tension like for instance between quality and speed of work.
Do you want more tips on how to make your culture transformation succeed? Then be sure to read Culture transformation: 11 Lessons learned from 11 top consultancies.
Helping HR & Management to boost company culture & engagement