Every time I lead a research study to learn how companies are (and aren’t) succeeding in digital transformation and innovation, corporate culture is consistently cited as the leading inhibitor in both cases. Said another way, corporate culture is to blame for the lack of innovation and change. Yet, most of the time, executives will actually say the opposite, that they do in fact have a culture of innovation.
However, in my recent report with CapGemini, “The Digital Culture Challenge,” we found a significant gap, 75% of senior executives believe their organization has a culture of innovation, but only 37% of employees feel the same.
In that same study, we also learned that 62% of respondents considered culture as the number one hurdle to digital transformation - yet just 7% of organizations have created a culture where employees can test, learn and deploy new ideas rapidly.
In an era of digital Darwinism, one where technology and society are evolving at accelerated paces while businesses are not, culture must shift from being the number one inhibitor to become the number one catalyst. These times warrant a new mantra, “adapt or die!”
The decline of corporate culture
I recently had the opportunity to present at the Digital Workplace Experience conference in Chicago, Illinois. My topic was “Culture 2.0 – The Art and Science of Human-Centered Change and Innovation.”
One of my biggest takeaways from the event is that many organisations aren’t looking at culture as a solution as much as they’re seeking the best technology tools, platforms and case studies to improve work, productivity and employee engagement. However, as I pointed out in my previous article on the subject of employee experience, technology is a means, not an end.
In reality, employees are actively disengaged - something technology will not solve. Employees are looking for vision and purpose in their work. They are looking for a culture of leadership empowerment and incentivization to move in new directions. As I discovered in my research with CapGemini, 75% of, who are culture leaders align their employee incentive mechanisms to digital vision.
In a 2016 research report in partnership with Jostle, we discovered that over 50% of employees are neutral in their company culture and more than 25% felt their corporate culture was dysfunctional.
So, if most employees are disengaged and corporate culture is blamed as the reason companies can’t move forward, why aren’t executives taking immediate action?
I have found time and time again that culture isn’t a mandate, nor is it a program or effort or thing that one single person takes accountability for defining and shaping. Culture is more of an after-effect of management, operations and policies rather than intentionally designed.
Rebecca Ray PhD, executive vice president for human capital and engagement research at the Conference Board, emphasises the importance of culture in her work with CEOs: “The culture you create or the culture you destroy will determine the success of your business.”
What is Culture and Who Owns It?
The truth is that culture is the lifeblood of any organisation. It defines how people treat each other, how they relate to customers and stakeholders of all kinds. Yet, culture is one of the least understood and underappreciated assets in any company:
- Culture happens with or without leadership
- Culture becomes what people agree it is
- Culture happens while management focuses on profits or quarterly numbers
- Culture happens while you run from back to back meetings
- Culture happens every time a legal makes it clear that taking risks is too risky.
The dismal stats shared here reflect what happens when culture is either relegated or disregarded as a byproduct of work. This is what happens when culture isn’t defined and no one is accountable for it.
So, who owns culture in your organisation? Who is leading the charge for defining the north star, where the team is headed, why it is they want to show up to work every day? Who, how and what inspires them day in and day out?
If you don’t articulate your culture, it’s decided for you.
Universal Truths of Culture
Did you know that 80% of what we learn as human beings, is done socially? As such, culture must be more than a result of work or a business initiative: It is at its core a social initiative. I learned this in my experiments with GapingVoid (which provided the illustrations in this article), an inventive culture design consultancy that takes a human-centered approach to change why and how companies foster leaders and engage employees.
To understand where our work begins, we had to accept some basic, but overlooked universal truths about employee behaviour, the state of work, and desired outcomes:
- Toxicity, egos, silos, low morale, lacking engagement, unproductivity, compromised performance, are a result of culture.
- Harmful cultures happen when people are not aligned around purpose and rewarded for enlivening that purpose.
- At the core, corporate beliefs, mindsets and norms dictate organisational behaviours.
- Those behaviours are tied to organisational outcomes…for better or worse As a result, there is a direct correlation between beliefs and outcomes. Enter culture design.
Pillars of Culture Design
The next big thing in business transformation is culture design, the intersection where humanity, business, art and science meet. This is where management becomes an extension of renewed leadership and employee engagement becomes of a function of purpose. Managers and employees act together against a shared vision and in a meaningful direction. Everyone is united on that mission and clear on their role and their impact on that movement.
In my experiments with GapingVoid, we also learned that there are universal truths about designing and shaping cultures with intent and purpose:
- Healthy, happy cultures shift work socially. They connect emotions to the outcome.
- The act of designing culture forces unestablished, nonexistent conversations about work, why we are here together and what’s in it for everyone.
- The formalisation and articulation of meaningful cultural beliefs establish new cultural norms and behaviours.
- Physically manifesting those beliefs through words, art, communication and management internally shape employee experiences
- And: projecting, sharing and conveying those beliefs externally also shape customer experiences, humanise the brand and bring customers into your culture.
These universal truths led to the development of a simple but potent formula:
CC=FMS x AB x S
GapingVoid partnered with BJ Fogg, a behaviour scientist who is also the founder and director of the Stanford Behavior Design Lab. Together they developed this formula to serve as the foundation for culture design.
Culture change (CC) is the outcome when you define a future motivating state (FMS) to communicate the vision for “why” we are all in this together. Then, formalise and articulate those beliefs (AB) to express the “how” you will work toward that vision. And lastly, develop platforms, artifacts and programs to socialise (S) those beliefs internally and externally.
The magic of culture takes shape as you intentionally go through these steps.
- Assemble leaders to define the future motivating state
- Define, articulate and socialize beliefs inside and outside the company.
- Give employees the too - every day - to be successful.
- Reinforce beliefs through art, employee engagement programs, updated policies processes, and HR to deliver intentional employee experiences.
- Manage and reward new behaviours against these beliefs.
Your corporate beliefs and actions will then affect organisational behaviours. Moreover, those behaviours will drive desired organisational outcomes. Remember, there is a direct correlation between beliefs and outcomes.
Culture is your biggest competitive advantage or your greatest disadvantage. You can’t delight customers if you aren’t inspiring your employees. Business innovation, digital transformation, change - it’s all human. It all starts with culture and now’s the time for culture design. At the heart of it, we’re all just looking for something to believe in.
Read more about drive desired organisational outcomes and what are the biggest digital transformation challenges for organisations by downloading our “Guide to DigitalTransformation“ e-book.