Following recent high-profile examples of culture issues being investigated or uncovered, HRM asked two experts: how should a company move forward and rebuild its culture?
There has been no shortage of companies making headlines for seemingly problematic leadership behaviours and poor workplace cultures practices in recent months.
These have included Nine Entertainment’s external culture review that reported “concerning levels of inappropriate workplace behaviours”, the resignation of WiseTech and Olympus’s CEOs, and the engagement of an external lawyer by Sydney hospitality group Merivale to undertake an independent investigation of employee complaints.
In situations such as these, companies often undertake independent reviews, revise internal policies and commit to implementing plans to improve their workplace culture.
While these actions are essential starting points for rebuilding trust, respect and safety within their workforces, they prompt a critical question: is this sufficient to drive meaningful and lasting culture change?
Understand the full picture
As soon as cultural issues of any kind come onto HR’s radar – be they isolated or widespread – it’s important to start a review process to learn about the underlying causes, says Jason Clark, Director and Co-Owner of Worklogic.
“Look at what current employee feedback is telling you; look at exit surveys, prior complaints and supporting data. Also, start encouraging feedback and providing various channels for that, including some where people can participate anonymously. That will encourage some people who may not be ready to trust the organisation yet to come forward.”
Next, it’s important to define the scope of the review.
“Be really clear about what the review will do and what it won’t do. For example, one of the criticisms people often have of culture reviews is that they think it’s going to deliver disciplinary outcomes, but cultural reviews aren’t set up for that.”
They can make recommendations about appropriate disciplinary approaches, but the actual details of what that looks like happens further down in the process, he says.
“When we do cultural reviews, we spend a lot of time making sure the communication is very specific and very transparent about what we’ll do with the information they provide us with, and what the outcomes of our process will be.”
It’s also important to be transparent about the timeline you’re working towards, he adds.
“There’s nothing worse than an employee participating in a culture review, then the organisation goes away [and doesn’t act quickly], then employees look at each other and go, ‘What happened? It has been six months. Where are we heading?'”
Clark also suggests appointing ‘culture champions’ within your business who can oversee the review process and report back on progress.
“It will often fall to HR to lead this, but culture is everyone’s responsibility. So finding someone who has social capital and influence – someone [employees] feel trusting towards – to lead this alongside the senior leadership team and board can be useful.”
He suggests committing to an interim review six to 12 months after the initial review is completed.
“Whether you do that as an engagement survey or another mini workplace review, check on how you’re tracking. Are things settling in? And, if not, why?”
Systemic discovery sessions over diagnostic tools
Too often when cultural issues have occurred, organisations jump into diagnosing what’s happening at a presenting level – i.e seeking to air out the symptoms and ‘bad’ behaviours, and then playing this back to people.
This is sometimes combined with an analysis of the issues and recommendations to fix it, says Joan Lurie, CEO of Orgonomics, consultant and advisor to several leading organisations.
However, Lurie suggests this is not sufficient.
“Culture emerges from the implicit system – the roles, relations, rules and hidden agreements or ‘contracts’ between different parts of the system,” she says.
“Leadership teams and HR typically commission a diagnostic to reveal what’s occurring on the surface. Often, all you’ll get from that is a mirror back into the organisation of what most people already know, instead of a view of how this underlying system – the narrative and relational network – is functioning, which may explain the emergent symptom.
“If you’re having employees tell you what’s happened to them, which often could be quite traumatic for them, and then just replaying it back publicly – even if done so anonymously – without an acknowledgement of what’s really going on and without a sense of how you’ll change this, that’s not going to work. It’s understandable then that employees would be angry and feel let down.”
“It’s really important to have frank conversations with executives and the board – no sugar-coating.” – Jason Clark, Director and Co-Owner, Worklogic.
While some level of this diagnosis may be necessary and important – particularly to understand the scale of the issue – don’t stop there.
“Instead, do a discovery of the system which implicates not only the ‘perpetrators’, but others who played a role in either maintaining or enabling such behaviour. While individual perpetrators need to be held accountable, you must also [acknowledge that] no behaviour is isolated.”
This makes implicit assumptions, agreements and systemic patterns that have become embedded in the organisation visible, says Lurie.
For example, in the case of some of the public examples listed earlier, many employees said they didn’t speak out because they felt fearful of the consequences.
“The implicit rule of engagement somewhere in those systems is, ‘Don’t make this visible because you’re more at risk if you do… you will get punished.” This message overrides the declared, explicit rule of ‘calling out unwanted behaviour’ in [a company’s] ‘speak up culture.'”
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Avoid ‘sheep-dipping’ responses
Taking a system discovery approach rather than a diagnostic approach challenges the misguided assumption that culture problems of this scale sit with one or two bad apples.
“Organisations often assume the problem is with individuals, or a group of individuals, and their values, so therefore they must go. But then, paradoxically, they end up running education and training sessions for all employees, assuming everyone needs ‘sheep-dip fixing’,” says Lurie.
This assumption more often than not leads HR and leaders towards Band-Aid solutions.
“They’ll run educational workshops – that might be on cultural sensitivity, unconscious bias or sexual harassment training – for everyone in the system. That’s a reductionist response because you’re painting the whole system with the same brush.
“For example, is [the problem] with the leadership team and how they understand or take up their roles in relation to their peers? How they stayed silent, looked the other away… or deliberately didn’t act because they believed they couldn’t challenge a colleague?” or assumed it was their manager’s job? These are the assumptions and patterns to disrupt.”
Symbolic versus systemic change
When looking at the types of changes to implement, Clark says to go beyond the low-hanging fruit to assess the underlying, systemic issues.
“When I was in the military, they conducted regular cultural reviews. Quite often, however, some of those initiatives didn’t land, which meant that 12, 24 months, or even years down the track, the same types of behaviours were still occurring.”
Lurie says it’s important to distinguish between necessary symbolic actions (e.g. an apology and/or firing a problematic CEO in a procedurally fair manner) – which may be important to demonstrate accountability to all stakeholders – and systemic changes, such as changing the leadership system and how it functions.
When organisations move away from purely symbolic (first-order change) to system changes, they stop thinking of change as a list of technical action items to action or recommendations to implement. Instead, they view it as an adaptive shift in behaviours and how the whole network of assumptions, roles, rules and narratives function, says Lurie.
“I see this all the time. These reviews make certain recommendations, like changing a policy, implementing new processes or running a program. Of course, many of these recommendations are completely valid, but they’re first-order changes that leaders can very easily agree to, but which don’t necessarily implicate them or change how things work in a linear, causal way.
“When you drop solutions which are technical, educational, generic and individual into a system, you’re doing first-order change, which often changes nothing. In this way, HR unwittingly may be complicit in maintaining the system they’re trying to change.”
“Unless there’s a reset and an acknowledgement and display of how leadership is going to show up differently, I don’t think you can rebuild trust.” – Joan Lurie, CEO of Orgonomics
One important systemic shift is for HR to challenge the narrative that culture change is always a huge, unwieldy task that will take years to reveal any progress, says Lurie.
“Some change happens quickly. If we allow leaders to hold an assumption that change always takes a long time, we’re letting them off the hook. If you assume something takes a long time, you’re going to assume you can take a long time.”
You can’t control culture in a linear directive way, she adds, but if organisations focussed on key leverage points within the system, they could potentially change aspects of a culture quite quickly.
“I’ve worked with organisations to help them bring about some forms of culture change in months rather than years,” says Lurie. “When leaders take ownership and responsibility for seeing their system and changing their role in it…that’s when you get second-order change – change to the structural patterns of relations.”
Working with the board and leaders
Following the discovery sessions that reveal entrenched behaviours and patterns requiring change, HR practitioners must step into the role of strategic accountability partners to the board and executive leadership.
“It’s really important to have frank conversations with executives and the board – no sugar-coating,” says Clark. “We need them to understand the feedback that is about them, if it’s relevant, or just generally about the wider organisation.”
This is often a challenge for HR, as leaders typically go into self-protection mode in the aftermath of a cultural issue, says Lurie.
“Some advisors, in trying to protect leaders, may suggest that they don’t take accountability, but, paradoxically, it’s absolutely what needs to happen at some level,” she says.
“HR has a critical role to play in creating interventions where leaders are tasked with looking at and acknowledging the role they’ve played, sometimes without bad intent and maybe even protectively. This is not a blame game, but rather about making visible to all how behaviour emerges through co-creation.
“Unless there’s a reset and an acknowledgement and display of how leadership is going to show up differently, I don’t think you can rebuild trust.”
If you can’t get them over the line with the moral argument, speak to these stakeholders through the lens of risk mitigation, says Clark.
“Under work health and safety laws, they’ve always had a requirement to provide a safe work environment, but now the obligations under positive duty and the requirements to reduce psychosocial risks means that organisations that aren’t doing this [could be under the microscope] of WorkSafe.”
Lurie says we’ve got to extend the boundary of what leadership looks like to encompass ‘system leadership’.
“If you see something and remain silent, you are complicit,” she says.
“When leaders start to say, ‘I’m only accountable for my patch and my own behaviour,’ that’s letting them off the hook. It’s not good enough to assume that leaders must role model the right behaviours themselves. We must extend the boundary of leaders to be co-accountable for each other’s behaviour, as well as the system beyond the boundary of their own patch.”
To achieve this, Clark suggests embedding culture more formally into leaders’ performance frameworks.
“There has to be some way of ensuring that they take every effort to improve the culture and make it part of their performance framework, their KPIs and, dare I say, a part of how their bonuses are calculated. This is a very effective way to get a commitment from people.
“On top of this, giving them some coaching and training around good leadership practice, emotional intelligence, inclusive leadership and conflict resolution is also important because sometimes leaders get promoted on technical ability and maybe not necessarily on leadership ability. And so giving people those skills can also help.”