Why Leaders Should Invest in Changing Workplace Culture
CEOs who fail to lead contribute to a toxic workplace culture and negatively impact their company’s bottom line. Here are seven ways to improve your company’s culture.
Shortly after I launched HR Asset Partners, the former CEO of a well-known Fortune 500 company asked about my work. After I explained our focus on helping companies prevent human capital risk, he told me, “No one is going to pay for culture.”
My response: “They already are.”
Research shows a direct correlation between culture and your organization’s bottom line. According to a Society for Human Resource Management report, toxic workplace cultures resulted in nearly one in five employees quitting in the past five years and have certainly played a role in The Great Shuffle. That turnover cost an estimated $223 billion.
The origin of organizational failure and its resulting costs can be traced back to the culture set in motion by CEOs and reinforced by senior leaders, managers, and employees complicit in unproductive behaviors.
What Is Organizational Culture?
First, let’s start with what it’s not: employee engagement on steroids or an updated mission, vision, or values statement. Organizational culture can be described as values, beliefs, norms, and habits that inform how people behave in an organization. Think of it as engrained, involuntary actions that guide — or define — your organization. Although you won’t find them listed as assets or liability line items on a balance sheet, a healthy workplace culture will lead to profitable outcomes. But it requires active diligence. If neglected, culture can become toxic, dysfunctional, and lead to negative results that ultimately impact your organization’s bottom line, such as unwanted turnover.
How Is Culture Developed and Fostered?
Over time and with concerted effort. Organizational culture doesn’t just happen. It is developed through consistent patterns of behavior — positive or negative. It is relative to how you, as the CEO, and your employees handle situations of varying degrees. During a crisis, setback, or other conditions, do you and your leadership team run toward or away from conflict?
For instance, say some of your more conservative long-term clients made derogatory comments to your VP of Sales about your Black and/or Hispanic employees who now wear braids, dreadlocks, or simply their natural loose curls. Although each employee’s hairstyle is well-maintained, your more vocal clients want their accounts reassigned to staff who are “more relatable” to their product lines and services. Those customers represent some of your company’s most prominent revenue-generating lines of business and have been with you for years. What’s your first inclination? Your natural behavioral tendencies become embedded in your organization and impact everyone affiliated with it, including internal and external stakeholders. Additionally, dynamics resulting from COVID have heightened employees’ desire to have a voice in decisions that impact where they work (whether fully remote, hybrid, or in the office), flexibility in when they work, and how to re-engage with their colleagues. To that end, a shuffle has occurred, and organizations should be soliciting employee feedback, which subsequently will influence culture.
Who’s Ultimately Responsible for Culture?
Although informing and maintaining culture is shifting to become everyone’s responsibility, the CEO is ultimately responsible for infusing the desired collective culture across the organization’s smaller subcultures. As the leader, you must assume responsibility for final decisions and outcomes—the good, the bad, and the ugly. Your behavior sets the tone for a functional or dysfunctional organizational culture and, therefore, garners you the title of Chief Culture Officer. Regardless of your organization’s size, industry, and geographical region, you must make culture a top priority and a business imperative in your organization’s strategic plan. Failure to do so is a dereliction that will impact morale, psychological safety, and perpetuate “the Great Shuffle.” A well-thought-out plan will include relevant and actionable goals, metrics, and accountability — for you and everyone within the organization. Arbitrarily delegating this critical initiative to the Chief Human Resources Officer will not suffice.
Change Your Workplace Culture
If a toxic organizational culture has developed under your leadership — or you inherited it from your predecessor but haven’t made addressing it a priority — all is not lost. Here are seven actions you can take to change your leadership narrative and your legacy, and start contributing profitable results to your organization’s bottom line.
Acknowledge there’s an issue and view it as an opportunity to build a workplace culture that will attract, develop, and retain motivated employees and increase customer loyalty.
Accept responsibility for your role in cultivating a toxic workplace environment.
Be humble and show genuine remorse when discussing the need for change.
Invite employees of ALL levels within the organization to provide candid feedback — openly or anonymously. How employees choose to participate will reveal their level of trust.
Listen intently and reflect succinctly — without judgment — on what your employees are saying.
Collaborate with your cross-functional senior leaders to develop a culture strategy informed by employee feedback.
Surround yourself with emotionally intelligent people willing to contribute to and support efforts to cultivate a healthy organizational culture for the collective good.
As always, be sure to communicate, implement, measure, evaluate, share results, and pivot if needed throughout the process.
And remember: When it comes to healthy workplace culture, there’s no one-size-fits-all prescriptive approach, but ignoring a toxic culture and allowing it to fester are not options for any responsible CEO — or your company’s profit margin.
Comments