According to a study released by the research and advisory firm Gartner,1 there has been a recent prioritization of corporate culture. Defining and describing corporate culture may be important in communications to shareholders, employees and prospective employees, suppliers, vendors and the general public.
Family businesses share with other businesses the imperative to define, deploy and live up to their statements of corporate culture. According to the Gartner study, CEOs of public companies discussed culture 7 percent more during earnings calls in 2016 than in 2010. Amazingly, every year companies spend an average of around $2,200 per employee to better their corporate culture.
Unfortunately, only about 30 percent of these companies report a good return on that investment. What are the other 70 percent of companies doing wrong? They are failing to follow three main strategies.
First, Avoid Using Simple Adjectives to Describe Corporate Culture
Instead of using generic adjectives likes “collaborative” and “innovative,” use language that accurately reflects your family business’s work environment and goals. More specifically, focus on tensions that your business faces, how those realities manifest themselves day to day, and how your business addresses those tensions.
For example, your business may experience the tension between achieving short- and long-term goals and acknowledging your employees’ well-being and work/life balance. By addressing culture through the reality of tensions, your leaders are avoiding the disillusionment that comes when leaders adopt one culture but ignore its effect on employees.
Second, Do Not Measure Culture With Data Alone
Culture is often described as intangible and hard to describe. In an effort to find clarity, companies often depend on employee surveys to see what they think about culture, focusing heavily on employee engagement. The issue with this is that those results can be misleading by getting “sanitized at the leadership level,” despite efforts to do otherwise.
The solution is unfiltered feedback.
Your family business should include open-response questions in corporate surveys and provide that feedback directly to leaders. You can even take things one step further and create a safe atmosphere that allows employees to openly discuss their thoughts and feelings without a survey. According to researchers, “CEOs must not only encourage the unvarnished truth, but also create an environment that demands it.”
Third, Alter Corporate Policies to Support Cultural Change
Most descriptions of corporate cultures focus heavily on collaboration. But far too often companies use forced-curve performance management systems that require a certain percentage of employees to receive lower marks than others.
This system directly contradicts the notion of collaboration by putting employees in a win/lose competitive environment. Likewise, a corporate culture that centers on customer satisfaction may be diminished by a company’s failure to invest in the expenses necessary to let sales reps meet these customers in person.
“This is the area where leaders are least consistent – putting the operating model behind the culture,” says Bryan Kurey, Gartner’s managing vice president for HR research. Successful leaders realize that corporate change may originate from those higher up in the workplace but manifests itself through actions taken by lower-level employees.
Think about these three simple strategies – they will help your family business actually adopt the corporate culture you strive to have.
Source: The Wrong Ways to Strengthen Culture, Harvard Business Review
FOOTNOTE
1 https://www.gartner.com/en/human-resources/trends/three-ceo-heads-of-hr-culture-conversations.html?utm_source=hbr&utm_medium=banner&utm_campaign=RM_GB_2019_HRL_NPP_BN1_THREE-CEO-HR-CULTURE