Why it matters: This is a time-sensitive question for board members and C-suite leaders to ask themselves as they scale back capital expenditures and consider cost optimisation steps and operating expense reductions in response to economic uncertainties.
Our thought bubble: Leaders need to take a fresh look at the long-term value that high-performing organisational cultures generate.
- A first-rate culture diminishes workforce backlash to cost-reduction measures.
- Corporate leaders can expect to outlast near-term economic gyrations.
- Strong organisational cultures also play a pivotal role in helping companies accelerate out of economic downturns faster than their competitors, which should make culture-building a priority.
Traditional talent management mindsets and strategies still pervade in many organisations.
Developing and sustaining a best-in-class organisational culture is a challenge:
- Culture-building requires buy-in among all business leaders along with the alignment of cultural values and decisions at every level of the organisation.
- Harmonising stated cultural values and individual organisational behaviors demands a grasp of the interrelated influences elevating the value of organisational culture.
- Equipped with that understanding, board and C-suite leaders can design a game plan for strengthening the culture.
- This begins with taking a hard look in the mirror.
5 ways to build a better culture
- Look in the mirror. Leaders set the tone.
- Parse the short- and long-term implications of talent management decisions.
- Measure (to manage) your culture. Common KPIs include employee engagement scores, attraction and retention measures, and success rates of new hires.
- Rethink how managers are selected and groomed. CHROs and their C-suite colleagues should assess the efficacy of management training programmes.
- Cultivate and sustain transparency when communicating bad news.
Call to action – Build a better culture blueprint
What they’re saying: In a rundown of companies that have downsized their workforces in 2023, The Wall Street Journal emphasises that announcements of layoffs are often misleading.
- These announcements communicate to employees the degree to which leaders’ decisions, behaviors and communications align – or fail to align – with cultural values.
The bottom line: Actions with workforce implications need to be executed in ways that reflect the organisational culture and build trust while also supporting business objectives that align with shared values. This is the path to building an organisational culture that will create long-term competitive advantage.
(The Bulletin — Volume 8, Issue 5)