Managing your reputational risk

Managing your reputational risk

The challenge

The challenge

When a corporate scandal hits the press, it’s rarely an isolated incident, but rather a spike in a pattern of behaviour that already exists within the culture. Certain behaviours have probably been encouraged, or at least tolerated, which lead to reputational problems. The results are the same- reputation damage and financial loss.

The News of the World, FIFA, Volkswagen, BP, Nike, Enron, Lehman Brothers all suffered. Reputation damage will at best dent your performance and tarnish your name, at worse it will cause the collapse of your business.

The challenge for organisations is not to merely define corporate values and standards, but to ensure they are truly lived in the day-to-day.

Recognise the risks

Recognise the risks

  • Are there behaviours present in your business right now that may give cause for concern? Sexual harassment, gender or ethnic inequality, high risk behaviours, unethical behaviours, or even extreme achievement behaviours? If these are occurring in your business then you could be sitting on a cultural and reputational time bomb.
  • Is culture discussed? Companies that have an open dialogue about values, beliefs and behaviours are more adept at managing reputational risk.
  • What happens when performance pressure is applied? Where are the risks? How can you reassure your people that no matter the pressure, certain corporate values and standards will always be preserved?
Action checklist

Action checklist

  • Run an honest assessment of your current culture. You need to understand what behaviours are present in the organisation and the beliefs and values upon which they are built.
  • Define your values and standards. Make it easy for people to understand the behaviours which are going to be encouraged and discouraged. Be wary of how behaviours become tolerated over time.
  • Be overt in describing how the intended culture will impact decision-making in the business. Creating a strong culture story and communication are vital.
  • Find your culture champions, those already exhibiting the behaviours you want, and work with them to influence the rest of the organisation.
  Your culture in a merger

Your culture in a merger

The challenge

The challenge

A merger not only brings together two or more organisations, it brings together multiple - and unique - cultures. It’s a high-risk situation. Studies show that in 50-70% of cases where mergers dilute value, the cause is a failure to successfully manage the culture. So how do you unite these in order to construct a strong culture for the new entity? How do you manage culture in a merger?

Recognise the risks

Recognise the risks

  • A merger is a sudden cultural shock which requires expert and active management if you are to succeed. Mergers can often accentuate cultural issues which may have been tolerated in less pressurised situations.
  • Executive focus tends to be on how to integrate the systems, products and processes of the businesses. But taking the time and energy to understand the culture of each organisation –which elements to protect and which to adapt to deliver the merged business goals – is just as vital.
  • It’s natural for people to be worried and expect rationalisation. In such situations, the other organisation can be demonised as the enemy, so you may need to focus on managing how people feel throughout the process. Remember however, addressing the happiness of your workforce is not the same as managing your culture.
Merger action checklist

Action checklist

  • Think about having at least one person with culture management expertise on your Merger Team. It’s a good place to start.
  • Be clear about each organisation’s current cultural strengths and weaknesses and set a well-defined target culture for the merged organisation. Do your cultural gap analysis in order to fully understand the task ahead.
  • Provide space and time for the organisations to understand each other and build respect. Facilitate communication and information sharing across the teams.
  • Train your managers on how to manage culture. It will stand you in good stead, not only through the merger, but as a continuing business management capability within your business.
Managing culture during rapid growth

Managing culture during rapid growth

Rapid organisation growth challenge

The challenge

It’s the cloud to the silver lining of every organisation that goes through rapid growth: How do you identify and preserve the aspects of your culture that forged its success at the same time as a wave of new recruits threatens to dilute its cohesiveness?

It’s not just numbers coming into the business. As organisations grow, they have to hire new people with specific skill sets, and cultural fit can easily become secondary to an urgent need for the business to acquire such skills.

Growth may also mean geographic expansion, or multiple sites, which can lead to an additional breakdown of cultural cohesion. So, how do you manage culture during rapid growth?

Recognise the risks of rapid organisation growth

Recognise the risks

  • Too often we hear clients remark that their organisation is a great place to work, without being able to say exactly what makes it great. Are you conscious of your cultural assets and the values and beliefs that drive your organisation?
  • Importantly, do you know which cultural assets you need to ensure you keep to meet your business imperatives? Your culture has delivered to date, but will it do so as you grow?
  • Embrace evolution. Your business is going to change, and this period is going to be about managing that change effectively. You cannot, nor should you want to, be in cultural stasis.
  • You are recruiting new skills. Do you have the right balance between skills and ensuring cultural fit? How are you defining the culture within which they should fit?
Action checklist for rapid growth risk

Action checklist

  • Know your culture. Make conscious what may have previously been instinctive and unconscious. Name, define and communicate your culture and what makes it that way.
  • Be clear about what is precious to the culture of the organisation and encourage freedom to explore and develop in non-critical areas. If you are bringing in new people, you want to be able to benefit from any contribution they’ll make to the culture, rather than rigidly indoctrinate them.
  • Be realistic. An influx of new people is highly likely to change culture. It's how you manage the cultural transition that's key.
  • Renovate your recruitment process to build in behaviour and culture from the start.
  • Consider running regular culture assessments. These can be a useful tool to check direction and development over time.
 A new leader

A new leader

New leader challenge

The challenge

A new leader or CEO will want to put his or her own stamp on the organisation. They are likely to bring an influx of sweeping changes and the installation of new systems and symbols.

These may work, but must always consider in parallel the behavioural and cultural aspects. Dissonance and cynicism between the leader and his or her people can slow down growth.

So, how can a new CEO make their mark, utilise past experience and effectively harness and develop or change culture to realise genuine benefits?

Recognise the risks of new leadership

Recognise the risks

  • Take time to understand the role and influence of the departing leader. A charismatic leader that built the culture at the core of the organisation’s success is a different act challenge to follow than a leader that has been ‘helped out’ of the business due to a management style built on a culture of fear, avoidance and blame.
  • Realise that the ways in which you’ve built success elsewhere will add insight to your new role, but can rarely be used as a cookie-cutter solution from company to company.
  • When asking ‘why do you do it that way? - a phrase commonly used by new CEOs - take the time to unearth the values and beliefs that drive the reason, rather than just focus on the process aspects of the task.
  • Too much, too soon. Sweeping changes can lead to the impression everything before your era was wrong and that you are right. Remember, many in your workforce are emotionally engaged with who or what came before you.
Action checklist for new leaders

Action checklist

  • Identify the cultural heritage of the organisation and invest in understanding the corporate values and beliefs which drive the behaviours, that in turn drive actions, which drive the results.
  • Create a compelling vision and clearly, patiently and frequently share this with everyone in the organisation. Creating change to deliver something new for the future is more engaging than creating change because the past was wrong.
  • Try to build upon any change programs currently taking place within the business. Steering these towards an amended vision may be more effective than starting over.
  • Understand your own set of values and beliefs. Leaders cast a long shadow. Understanding yours will help you interact with and steer the culture around you.
  Aligning the senior team

Aligning the senior team

Aligning Senior Team challenge

The challenge

The senior team casts a long shadow. They set the culture through their behaviour, the decisions they make and their priorities. If you have defined performance outcomes that depend on certain behaviours for their achievement, the senior team must ‘walk the talk’ and align their behaviours, values, and beliefs to the culture they require to implement the business’ strategy. It's the basis for truly effective senior team behaviour.

How do you achieve such alignment in a group that may have their own agendas, drivers, beliefs and unique personalities? How do you get those who don’t yet see the value in culture management as a business tool to work with you?

Recognise the risks

Recognise the risks

  • The culture debate may be seen as intrinsically part of employee engagement and HR.
  • Individuals may believe that their areas have healthy cultures, with the need for change lying elsewhere in the business.
  • Individuals may not be aware of their own management style and belief system; they believe they are already good role models for the organisation. It can be particularly difficult for those whose careers have rewarded them for being the way they are.
  • The organisation is investing heavily in value statements, new review procedures and internal communications to raise awareness of the desired culture, but the senior team are doing the same things as they did before. The senior team are failing to walk the talk.
Action checklist for the senior team

Action checklist

  • Review the culture. Are the differences between the stated culture and the cultural reality created by the leadership team and experienced by your employees?
  • Build culture leadership capabilities within your senior team. Managing culture is like any other business skill, doing it successfully is often not intuitive. You’d train your team to use a new IT system, so why not train them to build skills in culture?
  • Leading culture well is frequently a personally transformative experience. It requires high levels of self-awareness. Consider 360 reviews and 1-2-1 coaching to build effective senior team behaviours.
Aligning culture with strategy

Aligning culture with strategy

Aligning culture with strategy challenge

The challenge

Every business strategy represents a change from the past. You want more market share, more revenue, more products, more customers and less cost. You are asking the business to achieve something new, whether it is to do the same thing but better, or to do something entirely different things. So how will your people need to behave differently in order to achieve this?

When we work with clients, we help them identify how much of their strategy will be risk if the existing behaviours remain unchecked. If, for example, you want to achieve a revenue increase of $500m and believe half of this may be at risk if behaviours do not change, then it is well worth investing in culture management.

Recognise the risks of aligning culture with strategy

Recognise the risks

  • You can’t keep doing the same things, in the same way, and expect a different result. When you plan for the future of the organisation, do you also consider the culture you will need?
  • The more extreme the strategic ask, the more you’ll need to lead and manage your culture. Perhaps you need to adapt to shifts in your marketplace, to become more innovative, more focused on results, or more customer-centric. It’s time to be rigorous about exactly which new behaviours you need to instil within your organisation.
  • Don’t expect a new ‘to-do’ list for the organisation to drive through cultural change. The values and belief patterns of your people won’t alter simply because the process has. Without working on the deeper motivations that sit underneath the behaviours you’re trying to change, you leave a backdoor open for the old ways to sneak straight back in.
Action checklist for aligning culture with strategy

Action checklist

  • Create a culture strategy that sits alongside your business strategy. This process starts by setting a well-defined target culture that will deliver your business imperatives.
  • Create culture management capability within the business to lead and manage the change.
  • Identify those people already exhibiting the behaviours you want and work with them to influence others.
  • Create Key Behaviour Indicators against which you can track progress.

FAQs

What if this is our first time doing work on culture?

If your organisation is at this point, you’ll need to focus on getting buy-in for this investment. Take the time to clearly define your business imperative, identifying how people must behave differently in order to achieve it, and identifying what values and beliefs will underpin it. This work can be achieved through facilitated sessions with the executive team.

How can we implement our values?

We use the BE-DO-HAVE model to help translate values into tangible behaviours, decisions, priorities, and systems. Our assessment process looks carefully at your organisation’s values hierarchy and provides practical ideas for implementing, measuring and aligning values into action.

How do we align culture with strategy?

When your organisation has defined strategies that represent a change from the past, it’s a good time to focus on culture. Our Culture Transformation System defines your behavioural and strategy needs, delivering the changes required to support these. Without this, performance is at risk.

We have good diagnostics, but the implementation is unclear:

There are many great assessment tools on the market, but not so many good implementation plans. Walking the Talk will help you extract relevant data, in order to build the best culture plan for your objectives. We also have experience working with Barretts, Human Synergistic, Hewitts Engagement, Great Place to Work, and other known tools.

We’ve already used multiple consultants and/or frameworks:

Different consultants have different ways of working with values, behaviours and culture, and individual business units will develop their own approaches too. The Walking the Talk Culture Transformation System is content-neutral, so that you can use it to integrate existing initiatives and not reinvent the wheel. Our priority is training your leaders and culture champions on how to implement and use the process consistently.

How can we link culture to our branding work?

If your goal is to explicitly demonstrate how culture is the internal expression of brand values, and how behaviour with customers aligns to the brand promise, your culture work will be led by a close-knit alliance between Marketing and HR. Brand data should be included in the assessment data used for culture planning and branding initiatives should be linked to culture initiatives.

How can we link this work to established leadership curriculum?

Leadership development is one of the most powerful levers available to build the culture you want. Current leadership programmes should already be contributing to your target culture. Your culture assessment will provide feedback on leadership programme effectiveness, so it can then become more closely aligned to the culture priorities.

We’ve had lots of communication, now what?

'Talk’ is the easy part, but it’s achieving the ‘walk’ that's the primary contribution of our Culture Transformation System. If you've done lots of communication of values or cultural goals, you’ve already lifted the bar and delivering on the ‘walk’ becomes all the more important.

What if we’re already measuring engagement?

Work on culture goes to the heart of many frustrations employees have in their working life: slow decision-making, politics, bureaucracy, people not keeping their word, or ideas not being valued. By looking at the values, beliefs and behaviours that are the norm in the company, our culture process will uncover the root cause of these characteristics. Work on culture is the long-term fix for high engagement.

How do we engage the senior team?

In our experience, you can make a start on culture management without full engagement of the senior team. Our Culture Leader's Programmes are a good place to start if you don’t have full executive engagement yet. They show you how to calculate the business benefits of an investment in culture, so that you can convey these to senior executives.

How can we link local culture to head office’s chosen direction?

If your global or national organisation has already communicated a set of values that may not be linked to a programme, we can help these come alive. The Walking the Talk methodology takes into account global influences. We measure their impact in our Culture Assessment, so you can consider their contribution as you move through the Culture Planning Process.