Getting the senior leadership team on board has been critical to transforming a toxic workplace culture at Shape Group, which has in turn improved the company’s business performance and lifted safety performance, profit, employee engagement and customer satisfaction levels.
There is a hard link between positive workplace culture and positive business outcomes, according to group executive – people and culture for Shape Group, Kate Evans, who explained that HR can play a critical role in successful cultural transformation through securing buy-in from the whole senior leadership team.
Shape Group is a leading commercial refurbishment specialist in Australia and in FY17 it delivered around 300 projects across Australia with a combined value of more than $500 million to clients including ASX listed firms as well as Federal Government departments across multiple states.
In the early 2000’s it embarked on an aggressive growth strategy, which saw an influx of new employees, including several leaders who had less constructive leadership styles.
Evans explained that this was a precursor to a toxic workplace culture which featured patches of aggressive employee behaviour, departments working in silos and a culture of one-upmanship.
“The influence of these personalities was palpable across several states where we have offices in Australia,” she said.
“When the GFC hit, we had to backtrack on this (largely unprofitable) growth and were forced to downsize our people numbers by more than a third; and our remaining people were insecure, vulnerable and disengaged.
“At Shape, we had always believed the organisations that thrive are those that attract, retain and inspire great people.
“We had lost our way in this regard,” said Evans, who explained that the company had two choices.
“Although we build things, the single most important thing we will ever build is a great place to work”
The first was to follow a “ruthless path of pure cost-cutting”, with all the associated fallout on its people and clients and engage in a race to the bottom, while the second was to reinvest in its people and rebuild the company’s workplace culture.
“Thankfully, we chose option two,” said Evans, and the company started the journey in 2014: “acknowledging that although we build things, the single most important thing we will ever build is a great place to work.”
Setting the strategy
There was inconsistent leadership across the business and employees’ experience was “vastly different” depending on the state they worked in, and the manager they reported to, according to Evans.
“To improve our workplace culture, we knew we first needed to increase the standard of leadership across the organisation,” she said.
“Being a construction company, we have a lot of analytical types and therefore it was important to choose a robust measurement and diagnostic tool to support this.”
After investigation, Shape Group chose the Human Synergistics LSI tool and all senior managers undertook LSI surveys, debriefs and coaching over a 12-month period.
“One of the challenges in this journey was being prepared to make the hard calls on people – particularly those in positions of influence who were not interested in being part of the journey”
Evans explained that the tool helped to set a shared vision for the standard of leadership behaviour at the organisational level, while providing each individual with awareness and development on how to improve their own personal effectiveness.
“We had invested a lot of our time in getting our senior leadership team to a consistent and constructive level, and the next step was to measure our culture to understand the impact,” she said.
A workplace culture measure was conducted in 2016, which helped identify the ways in which people believed they were expected to behave within the business, and upon analysing this data it was found that there was a strong correlation between the culture results and the business performance results of each state operation.
“Where a constructive culture existed, superior business outcomes were being achieved [and] where a defensive culture existed, less than satisfactory outcomes were the norm,” said Evans.
Not surprisingly, further analysis showed the individual leadership and state culture styles were mirrored, confirming that leadership drives workplace culture, and culture drives performance.
“This was a transformational moment for Shape and the members of the senior leadership team,” she said.
“From this point forward, culture measures became our key leading indicator of business performance.”
Challenges and outcomes
There were a number of keys to the successful transformation of Shape Group’s workplace culture, according to Evans.
“We believe behaviours filter from the top, so for us, success was ensuring we had a senior leadership team who not only shared the vision but were passionate about it,” she said.
“People who found difficulty in developing a constructive leadership style and were unable to transform their operations culture within the business were removed from the team.
“One of the challenges in this journey was being prepared to make the hard calls on people – particularly those in positions of influence who were not interested in being part of the journey.”
There have been a number of tangible benefits as a result, according to Evans, with significant changes in workplace culture measurements and the whole organisation shifting from a defensive culture to a highly constructive one over the past four years.
“With this shift has come significant improvement in traditional business performance metrics including safety performance, profit, employee engagement and customer satisfaction over this period,” she said.