How to strengthen company culture
A toxic culture can disrupt business by creating low engagement and high turnover, and ultimately damage your company’s reputation. However, your firm's eco-system can be influenced and new norms can be internalized to help companies bounce back. Even if a company is not suffering from the effects of a negative work environment, creating a strong purpose and values from the beginning helps to institutionalize the right kinds of behaviors.
As researchers Lindsay McGregor and Neel Doshi highlighted in a recent Harvard Business Review article, identifying with the values and goals of your job, or purpose, is one of the three key factors that motivate employees at work. Therefore, the first step to creating your company’s culture should be mapping out a clear and inspiring purpose and set of values.
Your company’s vision and mission statements are important for mapping out where you want your company to be in the future and what you want to achieve. Unlike these elements, a company’s purpose describes the value your company seeks to contribute to society, beyond financial and personal goals. For example, teachers typically don’t choose their profession for the great pay and amazing benefits. It’s the opportunity to open up students’ minds to new ideas and influence the next generation that motivates them each day. As such, your company’s purpose should connect your employees’ work to how it impacts your customers’ daily lives, creating an emotional rather than financial incentive to the job.
For example, Southwest Airlines’ vision is “To become the world’s most-loved, most-flown, and most-profitable airline” but its purpose is to “Connect people to what’s important in their lives through friendly, reliable, low-cost air travel.”
Purpose and values are two different but intertwined concepts. Values provide guidance on the way you’d like your goals to be achieved.
Some of Southwest Airlines’ core values include demonstrating proactive customer service and having fun. They reinforce these values by recognizing employees for going above and beyond to help a customer in their Spirit magazine and encouraging staff to get creative with their daily tasks, such as a flight attendant who rapped safety instructions in a viral YouTube video. As a result, the airline has reached a 20-year customer satisfaction high and is recognized as one of the best places to work by Glassdoor, Indeed and Fortune.
However, keep in mind that this doesn’t have to be a complete overhaul. Sometimes changing just one practice can have a major impact. In his book, “The power of habit: Why we do what we do in life and business,” Charles Duhigg explains how Alcoa’s new CEO boosted innovation and output by making worker safety a top company value. Eliminating accidents on the job not only decreased hospital leave but also increased employee trust. By encouraging communication across hierarchies about ways to improve worker safety, people were also encouraged to communicate other ideas they had on technical improvements to upper management. This increase in upward communication generated profitable new ideas. When the CEO retired, Alcoa’s annual net income was five times higher and it was considered one of the safest places to work.
Creating new norms
Once you have a purpose and list of values, it’s time to start institutionalizing them into your company. For values to truly be adopted and internalized a simple top down process isn’t enough. A study by Meliorate found that 70% of all change initiatives fail. They attributed 33% of those initiatives to management behavior that does not support the change, 39% to employee resistance to change and 28% to budget and other obstacles. To complete an effective culture change a socialization process needs to occur during which values are transformed into norms that guide behavior in your company.
In their seminal paper, “International Norm Dynamics and Political Change,” researchers Martha Finnemore and Kathryn Sikkink describe three stages to norm evolution: emergence, cascades and internalization. Though their paper is focused on how norms are developed in society, it is also highly relevant to the creation of norms at the organizational level. The steps of the norm life cycle are as follows:
During this stage communication is key. Your company’s norm entrepreneur, or the figure leading this change, should begin by calling attention to the issue you want to change by using the appropriate language and interpretation, known as a process called ‘framing’.
Norm entrepreneurs must start off by convincing leaders to embrace the new norm. These norm leaders will play a critical role in communicating your vision and then acting as ambassadors for change within your organization.
Stages one and two are divided by a tipping point in which a critical mass of people begins to adopt the new norm.
After the tipping point comes a process during which international socialization occurs to induce norm breakers to become norm followers.
At this stage emulation, praise for norm supporting behavior and publicizing negative behavior is important to support the socialization of new norm(s).
A major factor that pressures actors to adhere to new norms is their identity as a member of society. “State identity fundamentally shapes state behavior and identity is, and that state identity is, in turn, shaped by the cultural-institutional context within which states act.”
In the company context, if enough employees adopt a new norm it can redefine the behaviors that are appropriate for that particular identity. At that point, the legitimacy of those who fail to adopt the new norm is called into question.
At this stage norms are almost taken for granted and become second nature.
To put the norm life cycle into context, a study of nearly 20,000 employees conducted by the Harvard Business Review and researcher Tony Schwartz found that 54% feel they’re not regularly respected by their leaders. When asked to respond to this claim, 25% of these leaders explained they were simply following the example of other leaders in the company.
To avoid the negative impact of bad management, Google’s Project Oxygen set out to identify the qualities that make a good manager. They found that the best managers were good coaches, empowered their team and expressed interest in their employees’ well-being. These qualities were then institutionalized into the system by creating feedback surveys and management training centered on these skills. Thus they evolved into norms that came to define what it means to be a good manager at Google. As a result, Google has retained the No. 1 spot in Fortune’s ‘100 Best Companies to Work For’ list for six years in a row.
Reinforcing your company’s culture with feedback
Factors such as new hires, growth and acquisitions will all continue to impact your company culture. Though giving more autonomy to your workers is a good thing, spreading out responsibilities and different layers of management makes it easier for new practices to grow that may go against your vision. It’s therefore essential that you continue to reinforce and institutionalize your values throughout all aspects of your people management strategy.
Start by promoting and recognizing behaviors that align with your new company culture. The “2015 Employee Recognition Report” by Globoforce and SHRM found 88% of HR leaders saw company values based recognition to be helpful in reinforcing common values. It resulted in 90% employee engagement and 68% employee retention. The report also revealed that 32% of employees feel that celebrating milestones with peers is emotionally impactful. WorldatWork found that 94% of companies that have peer recognition programs incorporated into their company culture see a positive effect both on employee motivation and engagement.
At the same time behaviors that undermine the focus and values you’ve created can also be remedied with continuous feedback and coaching. This is especially important during the onboarding process and after training sessions to reinforce new skills.
McGregor and Doshi’s study into employee motivation identified play, purpose and potential as top motivating factors. Employees, especially millennials, want the opportunity to grow and develop. Developing their skills with values based feedback will ensure they grow with, not away from the company, generating an engaged and culturally minded workforce.
Now that you’re ready to start your own culture change remember these key steps:
· Come up with an inspiring purpose and set of company values.
· Turn managers into role models.
· Root out practices and behaviors that hinder the development of your new culture.
· Reinforce positive practices through feedback.
By doing this, companies are encouraging employees to think about their actions in relation to company values and live them on a daily basis.