Who is to blame for Australia’s corporate culture crisis? (and how to fix it)

Who is to blame for Australia’s corporate culture crisis

If an organisation truly wants to stamp out culture failings then it is up to the leadership team to ensure that the systems that support the day-to-day work match the cultural rhetoric, writes Aaron McEwan

Pick up a paper from today, yesterday or a month ago and you’ll no doubt see an article exploring the corporate culture failings of corporate Australia, especially in the much scrutinised financial services sector.

From a predatory approach to securing business to the sins of omission (what the leadership team didn’t see or didn’t say), the actions of those at the top of corporate Australia are under the microscope.

Institutionalised bad behaviour is more often than not connected directly to those in charge – a ‘fish rots from the head’ as the expression goes. However, assuming that a new narrative and call from the C-suite for better behaviour will drive cultural change is simplistic and misguided.

Research by Gartner has shown that the old mentality of setting the culture at the top won’t create a values-driven workforce, nor will it enhance financial performance.

In fact, what leaders say in terms of the desired culture of a business is shown to have just a one per cent impact on workforce culture alignment.

Gartner’s Creating a Culture That Performs research doesn’t let leaders off the hook. On the contrary, it shows that what they say, do and the systems that support the work are all of equal importance.

Knowledge, mindset and behaviour – the cultural trinity
Most HR leaders (70 per cent) are confident that their organisation can define the culture that they need to be successful. So what’s holding them back from achieving their goals?

“There’s no point talking about ethical business practice if the KPIs and incentives given to staff can’t be achieved without taking a ‘win at all costs’ approach”

Gartner’s research shows that there are three key areas where organisations struggle to implement cultural change – knowledge, mindset and behaviour.

  • Knowledge: Less than a third (31 per cent) of HR managers surveyed felt that there was strong employee awareness of the desired culture within their organisation.
  • Mindset: Just 13 per cent of HR managers felt that their employees strongly believed in the culture. This scepticism towards company values can create a critical gap in the mindset of workers that will stop them from truly embracing change.
  • Behaviour: The final area is behaviour, where just 10 per cent of HR managers strongly felt that employees were actually incorporating the preferred values into their daily work lives.

The mistake many organisations make is that they try to address just one of these challenges, typically awareness. However, as the results show, knowing isn’t doing. The key to changing workplace culture comes from investing in processes that improve all three of these areas simultaneously.

Matching the systems to the rhetoric
If an organisation truly wants to stamp out cultural failings then it is up to the leadership team to ensure that the systems that support the day-to-day work match the cultural rhetoric.

For example, there’s no point talking about ethical business practice if the KPIs and incentives given to staff can’t be achieved without taking a ‘win at all costs’ approach.

Instead, staff should be rewarded for demonstrating behaviours and traits that represent the organisations preferred values.

Organisations looking to achieve real change must adapt the way they train, coach and set goals within the organisation to match the company’s desired values. This means reviewing all business units, processes and budgets to identify areas of cultural misalignment,

By undertaking this review, the business can reset what ‘business as normal’ looks like, along with the unwritten rules that define the working environment and what’s expected of employees to get the job done.

When goals, systems and culture are aligned, organisations can see performance revenue increases of up to 9 per cent, improved reputational outcomes (16 per cent) and see a 22 per cent increase in employee performance.

It’s time for a new era of leadership that knows that together, culture and performance lead to quality outcomes for employees, leaders, customers and stakeholders alike.