By Guest Blogger Jerry Pico
I originally posted this article on LinkedIn several months ago. It was based upon my experience in leading two culture change programs in two very different global companies. I worked with the premise for many months before publishing it.
What surprised me was the amount of interest and dialogue it generated. My takeaway was that many others were wrestling with this issue in their organizations.
I had considered re-writing the article in light of my upcoming talk, but decided that it was still relevant as it was originally written, and decided to add this introduction. The article also serves as somewhat of an ideological framework for the programs I designed, which will be the subject of my presentation.
Culture is one of the most valuable and powerful assets an organization and its members have. When it is healthy – it can drive engagement for the people who are part of it and be a competitive advantage commercially; when it is toxic it can create a breeding ground for discontent, stagnation and inertia, and ultimately commercial failure.
The clear sentiment within the feedback I received is that everyone (or at least a large percentage of people) in an organization needs to live the culture for it to actually exist. However, I still maintain that someone, i.e., a core group of individuals need to own and model the culture – for me, that is one of the key responsibilities that is at the center of leadership…and leads to the question – who should own it at a leadership level?
What do you think? How do you feel about it? Please feel free to leave your comment below.
Organizational culture – who owns it, business or human resources?
In recent years, I’ve led some incredible teams and partnered with some amazing leaders to design and facilitate major culture change initiatives in two very different global organizations – one is a privately held premium FMCG (Fast Moving Consumer Goods) company, and the other is a leading financial services corporation. Yet they both had one thing in common, the leadership had decided that the companies needed to assess the performance of themselves and their employees on ‘how’ they achieved their ‘what’ targets. In other words, their behaviors in achieving results carried as much weight as the results themselves – a practice I fully support.
In both cases, I was also confronted with the question “Who owns the culture, and therefore, the culture change – human resources (HR) or the business?” This begs another, more fundamental, question: “How does one define culture, in particular, organizational culture?”
The second question first: due to its subjective nature, I have seen many definitions of what organizational culture is, and countless ways that it can be measured – though it is still very difficult to define and be measured. The definitions that make the most sense to me are, “It’s the way things work around here.”, or “That’s how business gets done.” Technically, it’s a shared set of implicit and explicit values and behaviors in an organization that guide everyday decisions. I would also add that it’s how people are nurtured and led – because people live the culture.
Now, back to the primary question: “Who owns the culture, and therefore, the culture change – human resources (HR) or the business?”
Based upon my experience and training in business and human resources, it is essential that the business owns a company’s culture – because that is how things operate and business gets done, internally and externally – this is especially true when a company decides to change its culture.
HR has a major role in enabling the business to live (or change) its culture by supporting it with the appropriate tools, systems and processes, and when needed – professional expertise…but in essence, it’s all about how the people in an organization are nurtured and led Click To Tweet– by their direct managers, and how a business values its external stakeholders – tasks that HR simply cannot perform.
Deloitte’s Global Human Capital Trends 2016 report, stated:
“Culture is a business issue, not merely an HR issue. The CEO and executive team should take responsibility for an organization’s culture, with HR supporting that responsibility through measurement, process, and infrastructure.”
In the two interventions that I led, we designed and facilitated programs, i.e., learning experiences (virtual and live) for employees up to Board level executives; and in both cases I decided that HR’s participation would be minimal and behind-the-scenes. While many of my partners in HR understood and supported that position, I received some push back from some key stakeholders in HR saying that they needed to have a higher level of visibility, in both cases the Board level sponsors supported my position.
The other reason to let business take the lead is because if HR takes a lead role, the business may take less ownership and responsibility for the change, often citing that it’s HR’s job or another administrative task. One senior executive who I interviewed during the design process joked by saying, “I do performance reviews so I can check that box for HR.” While it was meant as sarcasm, there was a strong element of truth in it, maybe not for him personally – but there are many who truly feel that way.
Another benefit of requiring the business to take ownership of culture is that it frees up HR’s resources to focus on the areas where they have the greatest positive impact.
This position was echoed in a recent HBR article – HR Can’t Change Company Culture by Itself, in which Rebecca Newton wrote:
“True culture change means altering the way the organization lives and breathes. It shapes the way people make decisions, get their work done, what they prioritize, and how they interact with colleagues, clients, and customers. It is really only successful and powerful when business leaders see it as their responsibility and see HR as a resource for helping them achieve it.”
Finally, one of the challenges with culture and change is how to measure them. In most cases, culture change is gradual and takes time, the most common measure is the longitudinal measurement provided by Employee Engagement Surveys.
The results of the first intervention that I led four years ago are now documented by noticeably higher employee engagements scores – especially around performance management, and in the increased attractiveness of the company’s employer brand.
It will take some time to measure the long-term impact of the intervention I led last year, however, one measure of success – the Net Promoter Score (NPS) for the program was almost 3.5 times higher than the previous program, which had a much higher level of participation by HR. This perception was also validated by the qualitative feedback received from the participants and sponsors, and by the depth and breadth of actions taken by the business leaders who participated in the program to live the new culture.
Two things are clear in sustaining or changing a healthy, thriving organizational culture:
1. Leaders at the very top of an organization need to live and model the behaviors of the culture or change they want to see.
2. Business leaders and human resources professionals need to partner closely to foster a healthy, inclusive culture and successful culture change, and that these are most effective and can even be accelerated when the business takes the lead.
This article originally appeared on Linkedin, on February 13, 2017.
About the Author: Jerry Pico, Senior Learning Executive, Allianz SE
Jerry Pico works for Allianz SE in Munich designing and delivering technical and executive learning programs. For over 20 years he has successfully designed and led regional and global projects for other sector-leading companies such as Google, Ernst & Young, W.L. Gore and Swarovski. He is an expert in developing and applying best practices and innovative methods in the domains of leadership, learning and organization development to create effective and scalable programs that engage and enable diverse leadership and employee groups.
Jerry will speak at the upcoming HR Congress, his presentation will be: Engaging Business Leaders to Successfully Drive Culture Change!