Engaged employees produce better business outcomes than other employees – across industry, company size and nationality, and in good economic times and bad. Photo / Getty Images
Engaged employees produce better business outcomes than other employees – across industry, company size and nationality, and in good economic times and bad. Photo / Getty Images
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Sandy Burgham is a principal at Play Contemporary Leadership CoLab, a consultancy practice specialising in leadership development and organisational culture. She writes for listener.co.nz about her observations of modern corporate life.
Probably the most well-worn cliché when it comes to organisational culture is “culture eats strategy forbreakfast”. Aside from this being wrongly attributed to management guru Peter Drucker, my only issue with this quote is that it is so cutesy that the heart of the meaning is glossed over.
It is not just how people feel about working in a place. The interesting bit is that no matter how clever the strategy and business plan, healthy business outcomes, including the bottom line, are contingent on the true engagement of the people who implement it (well, for now, anyway, before AI robots take over).
So much research confirms this that it is hard to quote just one piece of evidence. But Gallup’s 2017 meta-analysis The State of the American Workplace is a good place to start, as it drills down to culture within pockets of an organisation as well as looking at overall organisational culture.
It confirms all its previous studies showing that engaged employees produce better business outcomes than other employees – across industry, company size and nationality, and in good economic times and bad. Business or work units that score in the top quartile of their organisation in employee engagement have nearly double the odds of success (based on a composite of financial, customer, retention, safety, quality, shrinkage and absenteeism metrics) when compared with those in the bottom quartile. Those at the 99th percentile have four times the success rate of those at the first percentile.
So, employee engagement has become the shorthand go-to measure for organisational culture. It’s a good indicative measure, but there is a risk of the siloing and sidelining of the measure itself, i.e. something to keep an eye on while the more important business of delivering profits to shareholders is attended to.
Very rarely is engagement the starting point for conversation about the whole business. Perhaps this is because leaders are busy scrambling to keep up with the complexity of the business environment or perhaps it is because they don’t actually understand what culture really means. Probably both.
Many times, people mistake culture for climate. The latter is a dipstick temperature check for an organisation – are people happy at the moment or are they feeling tense because of the latest round of restructuring? Is the climate running hot or cold; yes, there is climate change in organisations, too. But the organisations with the most robust cultures can withstand it and self-correct organisational climate change. Culture is something different.
One of our collaborators is a cultural anthropologist who introduced us to the work of British cultural theorist and sociologist Stuart Hall, widely regarded as one of the founding figures of cultural studies and influential in the way we look at the leadership of an organisation. Hall considered culture “a critical site of social action and intervention where power relations are both established and potentially unsettled”.
So, when we go into an organisation to work with leaders, we also have one eye on the whole culture of the organisation – how does power weave through the organisation? Who has the social power? How is power leveraged or wielded and by whom?
Culture is symbiotic with power. It is not about bean bags and remote working options. Those things are window dressing. Using a fish-tank analogy, we know that fish need a particular environment in which to survive. Do they have the right food? Have the new types that provide diversity been acclimatised in the right way? If climate is the temperature of the water, culture is the water itself, fundamental to the whole ecosystem. It needs to be filtered, monitored, cared for, tested and someone needs to be prioritising this. That person is the Leader. Those with the most power are the ones ensuring the environment is healthy so everything within it thrives. If the environment is toxic, we know where to look.
Understanding the link between culture and leadership is as relevant to the 2500 large businesses in New Zealand who employ more than 100 people as it is to the 10,000 medium-sized businesses with 20-100 employees and the 500k small businesses with 20 or fewer employees. Large listed organisations usually have a board that will have at least one director asking the executive teams gnarly questions around culture. But many of those other private-sector organisations don’t.
In most of these organisations, leaders are unlikely to fully grasp the complexity of culture and the range of factors that influence it, ie, they will not be truly committed to ensuring a healthy and thriving workplace culture let alone understand how they themselves are contributing to cultural aspects that need addressing.
Improving organisational culture is not a to-do list that anyone can execute. It is not about tracking and then sharing data around employee engagement. It is a transformational process that requires the leaders themselves to go through their own transformation. And if it was easy, everyone would be doing it.
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