Management consultant John Pope explains how best to develop an effective company culture to ensure business success and a motivated, loyal workforce.
I once knew of two manufacturing companies located within half a mile of each-other. They recruited from the same two housing estates at either end of a long hill. They were both profitable, modern market leaders, but with very different, yet effective cultures. Let’s call them X and Y.
Company X was tough, the people were a bit rough, the workers were on a steep bonus system based on fairly rough work standards. They had a high work pace and were tightly supervised. Those who did not get up to standard quickly, including managers, were fired quickly.
Company Y was much gentler. It had a charming second generation MD who had the radio on in his office when the cricket was on. His father came in to pick up his pension in cash on Thursdays with the other pensioners. The managers were similar; there was no bad language, no noticeable aggression. They had a happy workforce and little labour turnover.
The workers in one company would have been unhappy in the other, as would the supervisors who would have been ineffective in the other company.
Why did both work well? How could each company do so well? The X manager was distrustful, a hard driver; the Y manager achieved his results in a different way and looked after his people. In many lectures on management, an X manager is a ‘baddy’, with a bad style, and Y is good.
The culture of an organisation
Here are a few thoughts on the above scenarios:
- The theory Y style is nicer than theory X, but it may not suit all circumstances or all people.
- It is essential to have a consistent style of management and culture so that all who deal with the organisation know where they stand and what to expect.
- You get the workforce you deserve – theory Y people won’t stand theory X managers for long – they either modify their behaviour to fit in or get out. Customers take the same approach.
- Culture does not happen by accident. It reflects the attitude and values of the founders as modified and carried on by their successors. It is the way people are treated and ‘the way things are done round here’.
- Culture can be different between different departments, organisations, or between different organisations which are part of the same service, such as the police force.
- Culture, though difficult to define, is easy to recognise.
Does your culture hold the organisation back?
Initially, find out which aspects of your culture discourage people from using their initiative; make your customers unhappy at dealing with you; suppress your people’s talents; reward conformance rather than performance; generate conflict or unnecessary difficulties, and lead to internal disputes and territory wars.
Is your culture effective?
To be effective, the culture must suit the circumstances, the nature of the work, the workforce, and the working conditions. But it must also be clear and consistent. The people with whom you deal, whether inside or outside the organisation, need to know what to expect. You can easily identify an ineffective culture by the disputes, misunderstandings, turf-wars, and confusion over responsibilities. It is more difficult to count the cost, but this can be substantial.
Strong culture, strong management
Many organisations have problems with the discipline of the workforce. Managers bemoan the levels of lateness, absenteeism and Monday-morning illness.
Mars, the confectionary group, does not believe in lateness. It is rigorous in enforcing this and applies it at every level, with severe penalties along the lines of ‘three strikes and you’re out’. Also, it does not deal with suppliers who deliver late, and it pays suppliers ‘on the nail’. Other aspects of its culture are similarly clear and rigorous. People understand the rules and abide by them. Tough culture, but it works for company and its people, and allows for strong and effective management.
What can you do to change the culture?
Well, what do you want to change? You can’t change it all at once, and despite your best efforts there may be pockets of resistance for years. Some of the attitudes, built up over a generation, may take an employment generation to change.
If you want to change the culture, you will need to find some strong reasons which appeal to the whole workforce. That means serious, visible and strong leadership, maintained for a long time, until those who harbour for the old ways are in a tiny minority. It also means that, starting at the top, all managers must set an example of the way things have to be.
It is easy to make statements along the lines of ‘our people are our most important asset’ and ‘we will treat our staff fairly’. Look at the anomalies. Read the works rules; some that I have seen look as though they were written 100 years ago – the language used in writing to the staff, the way in which some departments have a way of upsetting people while others do not. You might also compare what the HR team says about its principles with how it looks from the outside.
What will you change and in what order?
That depends on your view on what is practical, what could show early benefits and what the costs and risks might be. A new chief executive with a clear agenda and strong leadership gives an opportunity to make radical changes quickly; an existing management may be restricted to more gradual change. You can start on aspects where people can understand the commercial importance of change and where benefits could be visible early; you could move on to change the way in which innovations and initiatives are resisted, or suppressed by management; you could give managers more support in handling employment problems and reduce sloppiness in aspects of discipline – preferably staring at senior level.
You could make a statement of the principles on which the business and employment is to be conducted, but this must be followed up by practical action and the disciplining of those who fall back into their old ways. But wherever you start, statements of policy must lead to action, and reviews of progress.
How can HR help?
HR is in a good position to help since many issues concerning staff performance, excess loss of staff, and disputes arising from breakdown in relationships, land on HR’s doorstep. HR should be aware of serious issues where poor culture is a substantial factor and must be able to assess the resultant damage.
Yet HR can do more than count the costs of the problems and the need for change. For instance, it can advise management on ways in which the culture of the organisation can be improved, because above all, successful culture change requires top management commitment.
John Pope has been a management consultant for over 40 years. He has worked in a wide range of businesses where performance and service were the keys to success. He continues to advise businesses at senior level on their direction, strategy and on the management of change. John can be contacted at [email protected].