Lisa's Fresh Thoughts
Employee Engagement – Six Critical Elements of Culture
By Lisa Hays, Fresh Perspective
Posted July 15, 2015
When considering factors with the greatest impact on employee engagement – positively or negatively – an organization’s culture nearly always rises to the top of the list – or at least among the top few.
And, companies ranking tops among “Best Companies to Work For”, “Highest-Performing Organizations” and similar lists, nearly always include “culture” as a critical part of their “DNA” – which they view as the driver of their success.
An organization’s culture is not static. Just as there’s no “one-size-fits-all” culture, culture can – and will – evolve over time, often as a reflection of organization leadership. Company leaders have the greatest influence over 1) the culture itself, and 2) the strength of that culture throughout the organization.
While there’s no single definition of “culture”, and “culture” itself isn’t easily captured in writing, a few common themes depict the essence of culture:
- Values, beliefs, objectives, strategies and approaches commonly shared within the organization
- Defines and characterizes the members of the organization and how organization members will interact with each other, and external stakeholders (e.g. customers, community)
- Collectively distinguishes the organization from other organizations
Review of the most frequently included elements in high-performing companies with strong corporate cultures shows six critical elements that together represent a strong culture. These are:
1. Organizational Design
Several elements of organizational design directly impact – and are impacted by the organization's culture. These include:
- Organizational structure and capabilities aligned in support of business strategy.
- Organizational structure supports effective communication throughout the organization – including those working remotely.
- Hiring and promoting employees whose values, beliefs and actions fit with important elements of company culture.
- Actions convey company culture externally. Culture, brand and company reputation are used to attract and retain talent.
- Leaving enough flexibility for:
- Entrepreneurial endeavors
- People to grow into new roles
- Stepping out of the norm to do something really important to building the company
2. Commitment to Employees
Many of the important ways to demonstrate commitment to employees involve frequent, direct and clear communications.
- Provide employees with challenging assignments
- Clearly spell out different paths to advancement; establish methods for employees to learn about different areas of the business and provide input into specific interests and/or skills they would like to acquire to expand their experience and expertise and facilitate advancement
- Tell them how they will be measured/evaluated (while maintaining a company-wide focus on accountability)
- Make it safe for employees to ask questions and disagree – most often within their work group/team, but occasionally in a wider setting
- Provide frequent and specific feedback – particularly from their direct manager, but also from managers at higher levels who have occasion to observe actions and/or review their work
The fun side of culture
Put employees in charge of finding fun ways for the company to work, celebrate successes or showcase employee individuality. Whether that means “no email Fridays”, a flamenco-dancing demonstration and lessons over the lunch hour, yoga groups, softball or bowling teams, tickets to local arts or sporting events for those exceeding objectives, or a myriad of other options – integrating fun is critical to – and should be unique to – a company’s culture.
A strong culture will clearly focus on listening to and understanding customers – across brands, channels, industries, etc. in order to consistently deliver high-quality products and services.
Giving employees across the company the ability to hear directly from customers will help them better understand their customers and direct their efforts to create satisfied and loyal customers.
4. Responsibility and Accountability
Culture itself needs to clearly show responsibilities and accountability begins at the top, and is unwavering. Find a variety of methods to communicate progress toward objectives, acknowledge challenges and outline plans and strategies to deal with whatever obstacles occur in the ever-changing business environment.
Clearly define each individual's responsibiliities, ensure they understand, and monitor progress frequently to identify and address any issues..
Ensure rigor, explicit standards and definitive processes for financial management, oversight and decision making are in place. And, operational efficiency is critical. Provide interim reports internally – not necessarily at set times (e.g. quarterly), but when they make sense based upon the business' pace and milestones reached.
Ensure time is considered a top management issue and a finite resource. Set time budgets; limit new initiatives when human capital is low. Identify and cut time-wasting activities. Set appropriate discretionary budgets at all management levels to eliminate senior management time spent approving what can effectively be addressed at lower levels.
Monitor changes taking place throughout the organization to identify and address "change fatigue."
Team-building exercises also provide leadership building opportunities. The ability to effectively work with very diverse groups of people and varying areas of expertise will help facilitate cross-functional knowledge. Create short-term assignments for talented individuals to gain experience in other areas. .
Top leadership must model a collaborative and team-centered mindset, while also letting employees know that although much is expected of them, humor and fun are also valued.
Promote both group – perhaps self-selected based on causes of importance to individuals – and individual cause-related volunteer opportunities. Given several options even the most diverse workforce can support causes they care about.
Aside from the significant benefits to employees and the company, the ability to collectively make a difference pays dividends of its own. Being a responsible corporate citizen and "giving back to the communities" in which the company operates are both opportunities and responsibilities.
Cause-related volunteer opportunities – and a corporate culture that supports them – are of particular importance to Millennial employees, who often seek an employer with values similar to their own. Companies with multiple opportunities, matching employee contributions, time off for community volunteering, with top leadership involved in volunteer efforts and other obvious commitments to the world outside of the company will reap employee respect and loyalty.
In the early 2000s Aetna's business was clearly struggling. Strong revenues hid the reality that Aetna was damaging relationships with customers and physicians. And, their reputation was marred by lawsuits and a backlash against HMOs and managed care – which Aetna had strongly advocated. Making matters worse, due to internal processes, massive overhead and inappropriate acquisitions the company was losing about $1 million daily.
Many issues related directly to their culture. Aetna was known internally as "Mother Aetna", out of respect for the company's 150-year history. However, the Mother Aetna culture rewarded dedication and loyalty above all else. The result was a workforce that resisted taking risks, tolerated mediocrity and distrusted outsiders. Leadership's mentality was, "We take care of our people for life, as long as they show up every day and don't cause trouble." (Yikes!)
Not surprisingly, the company churned through multiple CEOs and leadership teams rapidly. The leadership team that successfully navigated the huge cultural shifts necessary to turn the company around first took the time to talk with employees at all levels within the company. What they learned:
- Aetna's biggest problem was its strategy that focused narrowly on managing medical expenses to reduce the cost of claims – at the expense of alienating those patients and physicians they depended on for success.
- Aetna's greatest cultural strength was tied to their underlying pride in Aetna's history and purpose – substantial concern for patients, providers and employers, broad respect for peers and committed professionals.
Because they listened, Aetna's leadership was able to implement what in total were huge changes, by starting with a few, but meaningful changes. Their strategy was to rejuvenate Aetna's culture while protecting and defending its strengths.
Example: When speaking at an employee meeting about some of the changes, the CEO used employees' pride in the company as a reason to embrace the changes. Employees felt leadership was listening to them, cared about their concerns, and willingly adopted the changes that created the "New Aetna.
As demonstrated in the Aetna example, your organization already has a culture in place. As a leader it is your responsibility to work with others throughout the company to thoughtfully and integrate change wherever it is needed. While not easy, nor quick, taking the steps to strengthen the organization's culture are among some of the most important steps you will take.
*Harvard Business Review: Cultural Change That Sticks: Start with what's already working can be accessed here.
- Ask key customers to describe your organization's culture from their vantage point. Address situations where their description is lower/negatively different than you expected/believed
- Survey employees to gain insight into their views of how well they perceive their values and beliefs to be in sync with those of the organization. Break out results by meaningful subgroups.
- Set periodic culture reviews among senior leaders to evaluate each of the six critical elements, where weaknesses have been identified, and/or where changes are desirable based upon changes within or outside the organization.
Fresh Perspective helps business leaders make key strategic decisions. We adeptly research, analyze and synthesize results to deliver only ‘need to know’ insight to leaders so they make the right decision the first time. Lisa Hays, founder and CEO, gained considerable experience from widely varied roles in large corporations. She combines her 30+ years’ experience, expertise and objective viewpoint to directly help business leaders.
Lisa Hays, Fresh Perspective, Inc.
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