Article Building A Winning Organizational Culture
Article Building A Winning Organizational Culture
Article Building A Winning Organizational Culture
Culture
By Richard Barrett, Chairman and Founder, Barrett Values Centre
In the last three years Deloitte, Ernst & Young (E&Y), and PwC have all issued
reports focusing on the importance of organizational culture in driving a company’s
success.
• According to E&Y, 55% of the FTSE 350 companies have seen a 10% increase
in operating profits driven by their investment in culture. Overall 92% of the
Board Members of these companies said that a focus on culture had improved
their financial performance. i
• According to Deloitte, culture has become one of the most important business
topics of 2016. CEOs and HR leaders now recognize that culture drives people’s
behaviour, innovation, and customer service: 82% of Deloitte’s survey
respondents believe that “culture is a potential competitive advantage.” ii
The starting point of every cultural transformation initiative should be to find out what
is working and not working in the organization. This involves carrying out a cultural
diagnostic (Cultural Values Assessment) for the whole organization, including data cuts
for each business unit, department and team, as well as organization-wide
demographic categories such as gender and age. The results of the assessment will
allow you to identify the Cultural Health of the organization, and the Cultural Health of
the sub-cultures in each business unit, location, department and team. Also, because
the Barrett Values Centre’s Cultural Values Assessment enables you to measure the
current culture as well as the desired culture, the results provide you with a roadmap
for change.
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Figure 1 (b): The cultural transformation process—steps 6 to 10.
The process of cultural transformation is not something that can be delegated, nor can
it be handed off to a team of consultants. Consultants can help facilitate the process,
but they should not be in charge of the work. Culture work is something that the
organization has to do for itself, and it is always ongoing: culture has to be managed,
and the way we manage culture is through values.
At the start of the cultural transformation process, it will be important, if the leader
has not already done so, to handpick his or her leadership team. As Jim Collins says
in Good to Great, getting the right people on the leadership team and sitting in the
right seats is extremely important. vi
It is quite usual for there to be one or two naysayers in the leadership team who are
not willing to sign up to personal transformation. This is the point where they have to
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decide to get on or off the bus. There is no room on the bus for anyone who is not a
willing participant and committed to the process. Usually, at this point, those who
find the prospect of personal change too challenging, start looking for alternative
employment. It is important that the leader be aware that this might happen and is
willing to go ahead despite the fact that he or she might lose some of his or her best
performers.
The object of the scorecard is to develop a set of baseline indicators from which you
can measure the progress and impact of your cultural transformation journey from
year to year. This is also the best moment to do a values clarification exercise. This
involves setting up focus groups across the whole organization to help people develop
a deeper understanding of the impact and behaviours associated with the top positive
and potentially limiting values that show up in the results of the Cultural Values
Assessment.
The process of building internal cohesion should begin with leadership team
alignment.
The leadership team can be regarded as a cultural fractal of the whole organization.
If you don’t have internal cohesion in the leadership team, you will not have internal
cohesion in the rest of the organization. The only way to build internal cohesion in a
leadership team is to create a climate of trust. This requires that the leaders spend
quality time together, getting to know each other at more than a superficial level.
You will find the Trust Matrix exercise, which is described in The Values-Driven
Organization, extremely useful in this regard.
There are several different things that can be done to facilitate the alignment of the
leadership team. First, you can pull out the leadership team’s results from the
Cultural Values Assessment. This will tell you the level of Cultural Health and Cultural
Entropy the leadership team experience. This could well be different from the level of
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Cultural Health and Cultural Entropy at the management and supervisory levels of
the organization.
Second, you can pull out each leader’s individual values plot and have them share
their results with the rest of the team. Early intervention with the Executive Team is
critical so that they enter the organisational values discussion with accountability and
humility. What we are looking for at this stage of the process is both their individual
and collective accountability.
In large and medium-sized organizations setting the vision and mission is the job of
the leadership team. This task cannot be delegated. The direct reports of the
leadership team (the leadership teams of the members of the leadership team) and a
cross-section of the rest of the leadership group should be asked for their comments
once the leadership team has sketched out some draft statements.
The vision and mission statements should be short, easily memorable and
inspirational. They should reflect a higher purpose. The purpose of the mission and
vision statements is to give focus and direction to the organization, so everyone is
working towards the same goals. In small organizations, as long as it is manageable,
it makes sense to involve as many people as possible in setting the vision and
mission. Guidelines for developing mission and vision statements are provided in The
Values-Driven Organization.
The results of the Cultural Values Assessment will be useful in this regard since they
will highlight the values that are most important to employees in their personal lives
and their desired cultural values. To the extent possible, all employees should be
involved in this process. The values should be single words or small phrases that are
easily memorized and support the vision and mission. Normally, there should be no
more than five values: Four is ideal. Preferably, the values should be spread over
multiple levels of consciousness with at least one value at levels four and five (see
the Seven Levels Model described on the Barrett Values Website and in The Values-
Driven Organization). Some organizations prefer to choose seven values—one at
each of the Seven Levels of Consciousness. Some organizations also like to prioritize
their values. This is useful if a particular decision requires adherence to more than
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one value. It is important that the values can be easily recalled from memory. The
need to prioritize values becomes important when you have more than four values.
Once the espoused values have been chosen, two or three behaviour
statements should be developed for each value.
To determine what behaviour statements are appropriate for each value you can use
a technique such as appreciative inquiry. vii
• To give clarity to what each espoused value means in the context of the day-
to-day operations of the organization so you can recognize the value in action.
• To provide a way of evaluating executive and employee performance—to
measure the degree to which leaders, managers and supervisors as well as
other employees are living the values of the organization.
Because behaviours are always contextual, it is not unusual for different behaviours to
be used for the same espoused values in different parts (business units) of the
organization. The behaviour statements should be short, memorable, one-sentence
statements that describe the actions that support the value they represent, and they
should be appropriate for the context of the work unit. For example, the value of “trust”
on a factory floor may give more focus to competence-based behaviours, whereas
“trust” in a sales or accounting department may give more focus to character-based
behaviours.
Together, the values and behaviours, and the vision and mission, should define the
unique character and personality of the organization, the levels of consciousness it
aspires to operate from, and the key features of the brand. The ultimate purpose
of defining the vision, mission, values and behaviours of an organization is to create
internal cohesion and a capacity for collective action.
It provides a way for employees to communicate directly with the leaders of the
organization about what they believe is working and not working, what is important to
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them and the needs they have that are not being met.
Organizations that use the Cultural Values Assessment on a regular basis, and act on
the results, have found that the number of employees taking the survey each year
increases as employees realize that the leaders of the organization are not only taking
note of what they are saying, they are also taking actions that address their needs.
When this happens, the year-on-year results of the Cultural Values Assessment will
normally show a drop in Cultural Entropy—an increase in Cultural Health.
To this end, it is important for all members of the leadership team and the extended
leadership group to get feedback from their colleagues on the extent to which their
behaviours support or detract from the desired organizational culture. One way of
doing this is for all members of the leadership team and the extended leadership group
to carry out one of the Barrett Values Centre’s Leadership Values Assessment tools.
The feedback from this assessment should include a coaching session to support each
leader in lowering his or her level of personal entropy and shifting his or her focus to
a higher level of consciousness—helping them to make progress with their personal
development. This will involve developing their empathy and compassion skills and
tapping into their intuition and inspiration. After the leadership team has embarked on
the process of personal alignment, the direct reports of the leadership team should
follow suit. Eventually, everyone in the organization who is a leader, manager or
supervisor should participate in some form of feedback process that enables them to
grow and develop and improve their performance.
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alignment workshop.
As already stated, different behaviours may be associated with the same value
depending on the functions that a particular unit, department or team performs. It is
useful, as part of the values alignment process, for employees to define the behaviours
of their unit during the values alignment workshop. Once employees in a particular
unit have agreed on a set of behaviours, they should individually and collectively
commit to them, and be accountable for supporting each other in living the agreed
behaviours.
The purpose of values alignment is to inculcate the espoused values and behaviours
into the executive and employee population. Apart from the informational content, the
values alignment workshops should give participants an opportunity to explore their
own most important values and practice the concept of values-based decision making.
The Personal Values Assessment (PVA), which can be found at
www.valuescentre.com/pva, can be used as part of the personal values clarification
process.
FREQUENT MISTAKES
The four most frequent mistakes made in culture transformation programmes are as
follows:
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not rewarded.
CONCLUSIONS
To build a high-performing, values-driven organization that engenders high levels of
Cultural Health, employee engagement and well-being and low levels of Cultural
Entropy, you will need to develop a cultural transformation process that targets both
the personal alignment of the leaders and the structural alignment of the organization.
Carrying out an annual Cultural Values Assessment allows you to determine the needs
of your employees, and monitor the extent to which they feel aligned with the culture
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of the organization (values alignment), and the extent they feel the organization is on
the right track (mission alignment). Together with the level of Cultural Health and
Cultural Entropy, these indicators will enable you to assess the level of employee
engagement.
Richard Barrett
November 2016
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i
http://www.ey.com/Publication/vwLUAssets/ey-culture-and-boards-at-a-glance/$FILE/ey-culture-and-boards-at-
a-glance.pdf
ii
Global Human Capital Trends 2016. The new organization: Different by design, Deloitte University Press, p. 37.
iii
http://www.strategyand.pwc.com/culture-and-change
iv
Richard Barrett, The Values-Driven Organization: Unleashing Human Potential for Performance and Profit
(London: Routledge), 2012.
v
Cultural Entropy is a measure of the degree of dysfunction in an organization due to fear-based behaviours.
vi
Jim Collins, Good to Great (New York: HarperCollins), 2001.
vii
Appreciative Inquiry (AI) is a process or philosophy for involving individuals in a dialogue that focuses on renewal
and change. See The New Leadership Paradigm, pp. 456–457.
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