HR executives in high-performing firms are highly skilled in understanding the nuances of market-based business priorities and their cultural implications, writes Wayne Brockbank
Six weeks ago I had the unique opportunity to interview the senior HR executives from 15 globally recognised firms in the financial, defence and high-tech sectors. Most of their companies were the highest performers in their sectors. Each interview lasted two to three hours, and the focal question of each interview was: “What two to three HR practices or agendas create the greatest performance differentiation between your company and your competitors?”
The overwhelmingly most frequently mentioned agenda by the highest-performing companies was the seamless integration of the following:
- Connecting HR to a clearly defined shortlist of business imperatives
- Focusing on culture as the basic integrating framework for all HR practices and as the primary mechanism through which HR practices are linked to business requirements
- Leveraging all talent tools to sustain the culture agenda, while also ensuring their role in hiring, developing and retaining the best individual talent.
These findings are supported by recent empirical research. The Deloitte Global Human Capital Trends 2015 report shows that culture and engagement are rated as the most important human capital issue, edging out leadership which was the most highly rated in previous years.
An important recent article in Group and Organization Management indicates that CEOs’ personalities have significant influence on business performance primarily through their influence on culture, which in turn has an influence on business performance.
Finally, an article in the latest issue of the International Journal of Organizational Leadership, states that leadership has a strong influence on employee commitment, but only through the mechanism of organisational culture.
“In the midst of economic turbulence, high-performing companies effectively respond through the fundamental cultural values on which they are built”
This recent resurgence of culture is undoubtedly the result of three conditions. First, in the midst of economic turbulence, high-performing companies effectively respond through the fundamental cultural values on which they are built.
Second, with mergers and acquisitions again increasing, the shelf-life of technical expertise plummeting and individual talent being increasingly uniform (at least, among major competitors), culture becomes the key mechanism through which to successfully integrate merged companies, to develop and leverage technical knowledge and to integrate individual talent so that the organisation as a whole is greater than the sum of its parts.
Finally, the resurgence of culture is also a result of HR departments being more sophisticated and rigorous in designing, creating and leveraging business cultures.
As I found in my recent benchmarking trip, HR executives in the high-performing firms are highly skilled in understanding the nuances of market-based business priorities and their cultural implications; they are considerably more exacting in defining specific cultural behaviours that drive business performance; movement away from the generic behaviour or competency-based models is noticeable; and they are much more disciplined in aligning the full range of talent management tools with critical cultural capabilities and their accompanying behaviours.
They ensure that the tools of staffing, performance management and rewards, training and development, communications and organisation design are fully integrated and focused on creating and sustaining the culture that is required for business success.
4 action items for HR
- Be clear about your company’s prioritised business imperatives. HR professionals should not only understand the surface statements of business strategy but should also understand the market and economic logic and big data on which they are based.
- The words that are used to frame your company’s culture must be carefully and parsimoniously selected. There are literally hundreds of potential words to describe a company’s culture. When selecting your culture vocabulary, the following question should be addressed: “What are the words that would describe the culture we must have in order to outperform our competitors.” The communications literature is reasonably clear that a company can have three major cultural messages. In their attempt to be thorough, many companies fail the proven test of parsimony.
- The cultural descriptors must be rigorously translated into specific behaviours that will drive high levels of performance.
- All HR tools should be designed and delivered to drive the behaviours that are required for high performance. This will require a substantial amount of discipline and focus that can sometimes be highly elusive.
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