By John Harte, Managing Partner at Integrity Governance
For real, tangible business growth having a positive culture in the workplace is essential. This requires having healthy day-to-day attitudes, behaviours and work ethics within an organisation.
For those boards who have put off reviewing the culture at their business because they were in crisis mode during the pandemic, now is the time to undertake a review. With the world experiencing another crisis with the invasion of Ukraine, uncertainty and volatility are the new normal.
Also, at a time of intense competition for talented people, the culture at organisations is an enabler or, in some cases, a limitation on being an “employer of choice”.
It is therefore timely for boards to assess the culture of the board and their organisation to ensure that the culture is fit for purpose to deliver long term growth.
Boards are custodians of company culture
Effective boards recognise that they are responsible as custodians of culture – keeping, protecting and nurturing the good things, the “assets”, in company culture.
They also need awareness to address where the culture is not appropriate and must change for the business to be “fit for the future”. This requires that they understand and address the cultural liabilities of their organisation.
In fact, effective boards enact their role in culture by inspiring it, ensuring alignment, demonstrating authenticity by both reflecting and demonstrating the behaviours implicit in the culture, while guiding, encouraging and assuring themselves about it.
Three types of directors on the issue of culture
Culture is a hot topic for boards. We observe three populations on the boards that we work with:
- The”Jurassic”: To them, culture is the latest management fad, which will fade like previous ones; for example, total quality management and mindfulness.
- The “restless”: This group acknowledges that culture is important, but just don’t understand or know what to do, or how to deal with it as a board.
- The “effective enablers”: These are directors that not only comprehend how critical culture is to their organisation, but are vigorous in actively engaging and enacting their role as shapers and custodians on culture.
The pillars of culture that support business success
Effective and successful boards over the past couple of years have demanded adaptability, resilience, courage and candour. These remain just as relevant today with the current volatility in the world, and must be the pillars of company culture moving forward.
- Agility and adaptability are critical factors for evolutionary success, and are now required of boards and businesses as they navigate and stive to thrive in a more uncertain world. To create and deliver a culture of adaptability and agility requires boards to promote an entrepreneurial spirit, which releases the potential of their people to provide new ideas to help take the business forward. It also necessitates that boards engender a curiosity and fearlessness to inspire creativity, innovation and continuous improvement. To achieve this boards must lead by example in demonstrating diversity of thought and ideas in the boardroom, as this will give confidence to the rest of the business to follow suit. However, it’s important to realise that it’s only those boards that have diversity across demographics, skills, experience and thinking styles which will have a true diversity of thought.
- Resilience, the capacity to bounce back from setbacks, is a prized cultural characteristic. Resilience can only be delivered by businesses with a strong, transparent and visible leadership, engaged and empowered employees, and strong brand trust, both internally and externally.
- It is time for directors to be courageous in confronting reality. This requires them to have a healthy scepticism, but avoid the corrosion of cynicism. However, it shouldn’t just be those at the top that have courage – a culture of courageousness must run throughout the organisation. This will see all staff having the opportunity – and responsibility – to speak up, to do the right (if difficult) thing. To achieve this there additionally needs to be a culture of psychological safety to encourage employees to speak up and protect those that do.
- Finally, an open culture where bad news comes more quickly to the board than good news is critical for effective governance and leadership by the board. This way they can swiftly focus on and solve challenges before they potentially become bigger problems.
Ignore culture and face the consequences
Ignoring culture will more likely than not see boards preside over an organisation with poor company culture. It can lead to a major disconnect between the behaviour that was promised and what was actually delivered by the business, along with bad practices which will damage the reputation and performance of the organisation. Also, the damaging practices and harmful outcomes caused by a poor culture is motivating governments and regulators around the world to make directors legally liable for the culture within the companies they lead.
In a volatile world, it is more important than ever that boards step up and become “effective enablers” when it comes to culture. Fostering a culture of adaptability, resilience, courageousness and candour in the workplace will play a critical role in ensuring their organisation delivers a strong performance in uncertain times. However, to achieve this boards must support and demonstrate the culture they shape at all times, and help provide assurance around it. If they don’t the culture they nurture will not be effectively adopted throughout the organisation.
