Posted by Anthony Abbatiello on January 20, 2016.
Culture and engagement top the list of talent challenges in Deloitte’s Global Human Capital Trends 2015 report; nearly 90 percent of respondents believe their organizations are not effectively driving the desired culture. That is an astonishing number. Why does this matter? Because culture and engagement play a critical role in business performance. Organizations that want to inspire the best from their employees must acknowledge that motivations have changed and respond accordingly. People, especially Millennials, are often driven by purpose and experience more than career ambitions. This is creating a growing disconnect between organizational goals and employee behaviors. By better understanding emotional connectedness—engagement—as an essential part of even the most mundane decision making, companies can take steps to close the gap between employee behavior and desired business outcomes.
Typical cultural assessments focus on common cultural types
It’s not that companies haven’t tried to gauge and steer their culture; cultural assessments have been around for years. They have focused on common cultural types, such as an innovation culture, a safety culture, or a customer-centric culture. To capture these types, an analyst looks at a range of metrics, such as Collective Focus—how much do you emphasize collaboration and teaming over individual initiative? Or Risk and Governance—how important are compliance and structure in shaping people’s behavior? These metrics place companies in different positions on various continuums such as flexibility vs. control or internal vs. external facing. A company can land at any point on each continuum, with the goal that its overall cultural type fits with its strategy.
The missing link: emotion
Look around at the marketplace and what moves people toward greater loyalty, commitment, and ultimately a purchase. The behavioral sciences tell us that emotions trump logic and reason. So, for a sustained and significant change in culture, typical cultural assessments don’t go deep enough: they’re missing attributes that gauge emotions.
Deloitte has identified new metrics to analyze how people experience their organizations, highlighting positive indices that can translate to differentiating performance. These include:
These new metrics provide leaders with much better visibility into how people actually “feel” about their organizations. Generally, the farther along a company is on these measures, the better it can rally employees toward a desired new direction, and the better the long-term outcome for the business. Culture becomes a competitive asset that can help differentiate a company in the marketplace. By actively managing their culture, companies can achieve superior returns and outlast their rivals.
Connecting emotions to behaviors
Consider this example, a large pharmaceutical manufacturer that was struggling through a turnaround. The company had shifted its strategy without building up the organization’s capacity to handle the growth that would result. While revenues were strong, the lack of focus was badly hurting the bottom line. Turnover was high among leaders as well as employees. A company-wide culture analysis highlighted low scores on the index measuring courage.
Further analysis indicated that a culture of blame was keeping people from speaking up about areas of concern. Insecurity was driving many of them to offer only a “safe” performance—not their best efforts, which would likely include some risk-taking that might help the company get better at its new scale of operations. Without a change in the culture, the company’s new structure and policies might fail to take hold—undermining the turnaround.
To help close the gap between culture and strategy, the company focused on behaviors—especially how people decide on new initiatives. A key component was “share your story,” a series of forums held by leaders. In open lunches and office hours, senior executives talked about the company’s mission and its challenges, and the behaviors that needed to change. Their stories included details on how they had taken chances to move the company in a new direction—despite risks to their personal standing in the company. This program in particular helped break down barriers and provide empowerment to employees, putting them on a path to meeting the new strategy. Trust and courage were shown to be not just welcome but also positive contributors to the organization’s success.
Bridging the gap from head to heart
As this company discovered, culture shouldn’t be left to coast along. Our new publication, Take your corporate culture off cruise control: Power up the emotive engine in your workplace, takes a deeper look at why and how organizations foster a sense of purpose in their employees and strengthen their emotional stake in the company’s success. By making emotional connections, organizations can better motivate employees and actively manage the behaviors that will drive the strategy, support the vision, and deliver on the mission.
As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.