Why corporate Australia should stop talking about culture and start acting

Culture and leadership

When organisations stop paying mere lip service to their values and instead align with and act on their values, then trust, customer satisfaction and a high-performance culture follow, writes Aaron McEwan

As Benjamin Franklin once said, “Well done is better than well said.” And we’ve heard a lot of talk across corporate Australia about culture over the past 12 months, many apologies and multiple promises to address bad, unscrupulous and even illegal behaviour.

From the banks to sporting clubs, the aged care sector to Australia’s religious institutions and more, words of contrition have claimed headlines and become a staple part of our media diet.

Where, though, are the actions to follow up on these remorseful claims?

Sure, a few heads have rolled, and some shareholders have felt the sting of a temporary dip in share price, but there has been little evidence of a corporate cultural revolution or a public commitment to changing behaviour for the long-term.

It’s not about restoring customer trust through acts of justice. Without real change to the processes that guide corporate performance, cultural failures and reputational loss will continue because organisations simply do not live up to their customers’ expectations.

Corporate Australia must stop paying mere lip service to the values proudly displayed on websites and corporate brochures and start living them. When organisations align and act on their values, trust, customer satisfaction and a high-performance culture follow.

“There has been little evidence of a corporate cultural revolution or a public commitment to changing behaviour for the long term”

The process is called workforce culture alignment (WCA) and when done well organisations can increase their revenue goals by 9 per cent, increase reputation outcomes by 16 per cent and see a 22 per cent increase in employee performance.

Cultural realignment
Almost all organisations have clear values, but few employees actually live these values on a daily basis. Gartner research shows that there are three key areas where organisations struggle to implement cultural change:

  • Knowledge: Less than a third (31 per cent) of HR managers believe their employees actually know and understand the desired culture within the organisation
  • Mindset: Just 13 per cent of HR managers are confident that their employees believe in the culture and company values
  • Behaviour: Just 10 per cent of HR managers believe employees incorporate preferred values into their daily work routine

The key to changing workplace culture is to focus on processes that address all three of these areas simultaneously.

Redefining performance
Employees can only live an organisation’s values if they are reflected in the people strategies, systems and processes of the business.

For many corporates, the biggest challenge lies in redesigning performance management and rewards programs to encourage employee performance and meet customer expectations in terms of quality, ethics and service.

This can mean redefining the very meaning of ‘performance’ in some organisations. In the minds of most business leaders and managers, ‘performance’ and ‘revenue’ are intrinsically linked. As too are phrases such as account growth, wallet share and retention.

“The biggest challenge lies in redesigning performance management and rewards programs to encourage employee performance and meet customer expectations in terms of quality, ethics and service”

What’s missing from this mindset are the customer’s expectations and their experience. When cultural values and the customer experience are prioritised over performance expectations, the results translate directly to the bottom line.

Gartner analysed over 75,000 customer surveys and found that the most accurate prediction of purchaser loyalty (40 per cent more accurate) comes from measuring customer effort, not customer satisfaction.

For the focus to be firmly on the future, HR leaders need to evolve performance management conversations to embrace review and reward processes that focus on customer-centric outcomes.

The removal of sales targets for customer service reps (as a number of financial institutions have recently announced), is a good start. But we should be wary of trying to incentivise and financially reward ethical behaviour.

Gartner’s extensive research on employee performance shows that employees are intrinsically motivated to meet customer needs and operate in an ethical manner. Paying them to do these things or setting them up to compete against each other is likely to achieve the opposite of what we intend.

Instead, we should:

  • Help employees understand how their actions contribute to the bottom line
  • Empower them to use their judgement to deliver an effortless customer experience
  • Take a firm stance on ethical breaches and misconduct

Organisations who take a good hard look at their culture and consciously disrupt themselves to ensure that the needs of customers are prioritised over profits will ultimately yield loyalty and financial success for today and tomorrow.