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Corporate culture: why change must come from within

Author: ICAEW Insights

Published: 24 May 2022

Restoring trust in business hinges on good corporate culture, but it’s a false belief that cultures can fixed by expert and specialist team-led initiatives, says Andrew Cocks.

As we emerge from the COVID-19 crisis, organisations of all kinds will be asking themselves some fundamental questions about their purpose, values and culture. There is an opportunity for businesses to redefine their relationship with employees, customers and society. We were presented with a similar opportunity following the banking crisis, but we dropped the baton. We can’t afford to make the same mistake again.

The unfortunate truth is that trust in institutions of all kinds is at an all-time low and falling. To reverse this decline, organisations need to be seen to act with complete integrity by showing alignment between an organisation’s stated values and their observed actions and decisions. To demonstrate this alignment, everyone needs to understand where their organisations are culturally, and have a clear view of where they need and want to be and how to get there. In other words, they need cultural self-awareness. 

Very few organisations have anything like this level of insight as they completely fail to measure and manage their cultures in any coherent way. A major reason for this is an enduring belief in the myth that culture is intangible and difficult to measure. This leads many to see culture as something academic that can only be assessed through psychometric instruments based on complex models. It also causes them to rely on external ‘expert’ consultants to lead the process of change. This approach fails because it effectively excludes most employees from actively participating in the process of understanding and changing culture. 

Other organisations seek simple, more familiar vehicles for assessing culture. This is usually through employee experience or engagement survey programmes. These are not fit for this purpose as culture largely exerts itself at an unconscious level, and the conscious ‘espoused values’ expressed by leaders and employees are inherently unreliable. This explains why there can be such disparities between what people tell us and the objective evidence. 

The truth is, over the years we have unwittingly used such surveys to train and incentivise employees to tell us everything’s OK, reinforcing the biggest single barrier to progress – complacency. Against a backdrop of corporate scandals and persisting inequities, employees telling us that everything is fine is a poor starting point for driving change. The organisations that drive the most positive change will be those that encourage everyone to constantly challenge their practices and acknowledge both individual and institutional misdemeanours and biases. 

We need to ditch the demonstrably false belief that cultures can somehow be fixed from outside or even from inside through expert and specialist team-led initiatives. People are fundamentally not resistant to change, they simply don’t think it applies to them. People will continue to see culture as somebody else’s problem and something that’s ‘done to them’ unless we move away from a traditional view of the change agent and recognise everyone’s role in creating and reinforcing culture. 

It’s imperative to do everything we can to make change everyone’s responsibility, to give them agency and hold them to account. This means moving our focus away from imposing change, to creating the conditions within which it can happen. We cannot continue making the mistake of believing that the exhortations of our leaders, elaborate communication plans and change management initiatives will make any difference either directly or indirectly. Changing procedures and processes in this way can only reinforce culture change that has already happened, not create it. 

If we are ever to get to a place where we are managing risk effectively, we have to accept that everyone has the capacity for wrongdoing and any response that does not enhance learning is a wasted opportunity. This will allow us to be honest about and less tolerant of behavioural lapses, but more considered and balanced when we impose sanction for transgression. 

Questioning practices, voicing concerns and admitting to mistakes and individual and collective shortcomings is not a sign of weakness, it is quite the reverse. Relaxing the reins of control and helping people become more aware of what drives their behaviour while maintaining constant vigilance will result in an environment where inevitable errors or transgressions have the minimum possible negative consequences.

There is nothing unmeasurable and unmanageable about behaviours, and the assumptions that drive them can easily be exposed if only we ask the right questions. When a desired culture is expressed in terms of simple tangible behaviours, everyone can be actively involved in the process of change. It shifts the conversation from ill-defined and abstract concepts to what we need to do, how we can do more of it, what is stopping us, and how we can remove these barriers. It helps us to gain consensus about what needs to be done and empowers everyone to be part of the solution. 

Now is the time to redefine how we measure and manage organisational culture. A continued failure to do so will be bad for employees, bad for customers, bad for wider society and bad for organisations of all kinds.

Andrew Cocks is an assessment psychologist and the author of Counting the Dance Steps: Rethinking how we measure and change organisational cultures for the good of all

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