Driving culture is a Board’s key role – how a CEO can assist
In an earlier blog I reviewed the key issues identified for Board attention in the 2015 Grant Thornton Global Governance report.
One of these issues was setting, driving and supporting corporate or organisational culture. Todays blog focuses on how you as a CEO might practically assist the Board in this challenge.
Why, and how to, engage the Board
Sometimes a Board needs to see the value of culture setting in terms of how it contributes to the success of the business.
Once identified and convinced they can actively provide the stewardship and guidance needed to propel the culture setting to the next level. This link is often not immediately obvious and it is helpful to spell it out for the Board.
Alternatively a Board might not know where to start from the position of the boardroom, in this case providing guidance and examples can prove a catalyse.
So in your leadership role it would be useful to bring this issue to the Chair and/or Board’s attention.
In this blog I’ve tried to identify some practical ways you could approach this agenda setting role.
1. Demonstrate the value of corporate culture on business outcomes
A word of caution though before you set out – in order to champion the benefits of culture investment you yourself must have a conviction to the outcomes, you should not just be doing it because it’s the done thing or expected!
A good starting point for you to engage the Board on this journey is to show them the value of culture from the perspective of
- how it can drive your competitive advantage,
- distinguish your from your compatriots, and
- make or break your business.
One way you can achieve this is to share insights from other Boards or businesses on their success in leading on culture. This approach can be compelling and allow for comparison of the respective Boards’ roles.
Good examples can be found in the business literature generally. One example we found compelling was that outlined in Building a winning culture which showcases the work done by Gail Kelly at Westpac.
Others are available
2. Encourage reflection of your corporate culture
The next task should be to explore the value and significance of culture to your business, brand, products or services.
This involves some internal navel gazing with a report and summary of your findings to the Board.
Such a report would encourage the Board to spend time reflecting on the core elements of your culture that drive achievements, or are required, to deliver on your ‘promise’ and goals. In order to do this however the Board needs to know the ‘lay of the land’.
This might start with a review and reaffirmation of your business ‘values’ in the strategic plan.
In considering your organisation values you might like to know or establish
- what is your businesses unique ‘heart and soul’ – what do you strive for, commit to and value at the core of your business?
- how are these values demonstrated in practice? – define precisely the high performing behaviours that deliver on your culture,
- what accountability do managers have to uphold and champion these values? and
- how do you celebrate when these values are ‘lived’?
You can see from all of the above that these discussions require the input of senior management and staff before reporting to the Board.
A useful model for understanding the interrelationship of business systems on culture has been developed by Melcrum. You will also find on their site a useful set of questions to frame the discussions when diagnosing your corporate culture which can be downloaded for your use.
3. Determine the key drivers and controls over corporate culture
Having done this work, the next most important step is an audit of your culture. From here the Board can begin to define how it will manage the drivers that will deliver a change in culture.
The Board’s role, having reviewed your report and analysis, is to ask questions that prompt a deeper exploration of culture and from this vantage point set the tone or the drivers of the desired culture.
Drivers of culture can include (see also Melcrum’s model above)
- behaviour expectations which should be clearly defined.
- how to measure and drive these behaviours.
- What actions represent the embodiment of the culture.
- the reward systems that support and reinforce the culture.
Booz & Company suggest that in selecting the drivers you should
leave aside all-encompassing culture change initiatives and instead focus on a “critical few” elements are more successful.
They identify the three key drivers to focus on are
- “critical behaviours (the behaviours that will quickly and easily spread),
- existing cultural traits (the elements that resonant emotionally with your staff and represent the collectives identity) and
- critical informal leaders (the key individuals who have power and influence to act as change agents).”
Typically an approach which provides for the following will assist in embedding the ideal future and culture you and your Board have envisioned.
- Clear expectations – that is by setting expectations in areas such as
- the need to change,
- culture expected and supported, and the
- link or connection of desired culture to the business goals.
- Enrol and gain the commitment of the leadership team – they must do and act in a way that reflects the cultural expectations.
- Embed accountability for delivery on business goals – don’t overly focus on culture what is important is the business goals
- Enforce the drivers – what is the behaviours desired – how are people held accountable, reward or encouraged to ‘walk the talk’.
- Reinforce, communicate and celebrate – accept that change does not happen overnight and there will often be missteps along the way. Wherever possible reinforce the message, congratulate and celebrate actions and examples that align with the desired culture.
It is useful to also remember to develop some rituals, habits and routines which embed corporate culture this makes shaping the culture become everyday – that doesn’t mean it is easy or will not stumble but it builds some repeatable and over time automatic responses to events and approaches in the workplace.
Remember ‘culture is a means to an end, not an end in itself’.