The Rise of Employee Voice in Connected Cultures
The word “culture” has many definitions, but within a business context it usually speaks to the connectedness between the people of an organization, the central mission of the organization, and how the work gets accomplished each day.
Until very recently, culture was often marginalized or perceived as something that could be delegated to HR or the office manager. It was frequently viewed by the executive management team as a peripheral concern, and if problems cropped up, the assumption was that they could be easily remedied with the occasional happy hour. Even within many HR departments, culture was only urgently prioritized if there was evidence of a real ongoing problem.
But, culture runs much deeper than perks and can have a profound impact on the health of an organization. In fact, new research indicates that culture is much more critical to an organization’s success than most top executives realize, and it may become one of the most important business topics of 2018.
If you still think culture is one of those squishy HR terms, just consider these four statistics:
- 7 out of 10 workers in the US are either actively disengaged or not engaged in their work, according to recent research by Gallup.
- The Bureau of National Affairs estimates that US businesses lose $11B annually as a result of employee turnover.
- A study by Dale Carnegie Training found that companies with engaged employees outperform those without by up to 202%.
- Companies with a higher sense of purpose outperform others by 400% (Jim Stengel, 2012).
What is causing this epidemic of disengagement? A likely reason is that people don’t feel that their opinions matter within the workplace. Employee voice is being undervalued. Most business leaders have spent significantly less time thinking about culture than they have about strategy, which requires long-term thinking, commitment to core ideas, and evaluations of how to best corner your market.
But if you think about it, how can you implement a strategy take if you have a poor culture, in which your people are disengaged and not connected to the intended outcomes of that strategy? Without having a solid culture, other business concerns like strategy, innovation, efficiency, customer satisfaction, and financial discipline are unsustainable.
What’s more, developing a winning culture requires the involvement and commitment of the organization’s top executives, even when they have other urgent priorities competing for their time and attention. That’s why one of the most critical challenges for HR and business leaders today is to figure out how to successfully create a winning culture without ignoring other pressing business concerns. Tweet This!
Millennials drive the trend
According to the Center for Creative Leadership, rapid organizational change is one of the biggest leadership development challenges facing businesses in coming years. In today’s volatile business climate, businesses experience unprecedented degrees of turnover, competition, disruption, uncertainty and other types of obstacles that make goal attainment much more difficult. The challenge for many leaders is how to get everyone moving in unison when the goal posts and the rules of the game are changing in real time.
This need to move organizations forward quickly and collectively is getting even more complicated as millennials begin to dominate the percentage of the workforce. The millennial generation (individuals born between 1976 and 2001) will soon comprise nearly half of the workforce and have a very different view of professional success than the generations that preceded them. The shift in the workforce is quickly driving profound changes in the cultures of organizations large and small.
As explained by Bob Moritz, US Chairman and Senior Partner of PriceWaterhouse Coopers (PwC), “When I was coming up, we knew what we were doing, but we didn’t ask why we did it. We didn’t give much thought to our, or the firm’s, role in society. For me, that point crystallizes the generational issues that PwC and many other organizations are facing as they hire greater numbers of millennials.”
According to Moritz, millennials not only demand to know the organization’s purpose, they also want every action the firm takes to represent their values. They are more eager than previous generations to understand the decisions of the executive team and, in turn, they want to be asked for their input on important issues.
In response to those expectations, organizations like PwC are making changes to the traditional human-capital approach, developing a system of evidence-based HR practices that address the shifting needs of the workforce. And many are implementing crowd-sourced communications platforms that enable everyone to take part in the ideation process and have a voice in where the organization is going.
Leading with purpose
Sara Roberts, author of Nimble, Focused, Feisty, says that the key to success in the current era of Volatility, Uncertainty, Complexity, and Ambiguity (VUCA) hinges on the business’ ability to create a purpose-driven culture.
Roberts explains, “Purpose is a fundamental need for human beings, as individuals and in groups, in our lives and in our work. The most productive, effective, and authentic way to operationalize purpose in an organization is to figure out how to support and drive value for the customer in line with that purpose. When key questions are asked, decisions made, and actions taken accordingly, the organization can be said to be leading with purpose. That clarity not only connects the business to the customer in a deeper way, but it drives innovation in service of customer value, leads to more sustainable growth and profitability, infuses authenticity into marketing and brand, brings employees and stakeholders together, and helps the world become a better place.”
A 2015 survey conducted by Harvard Business Review and the EY Beacon Institute found that more than 80% of executives believe that purpose is important to many key measures of a business, and 70% believe it is important to integrate purpose into core business functions. Less than half, however, believe that their organization has a shared sense of purpose or aligns its strategy to a purpose, and fewer than 38% say that employees are clear on purpose or that the business model and operations are well-aligned with their purpose. That gap points to an opportunity for organizations to engage more deliberately with their purpose, connect more meaningfully with their customers and employees, and generate and execute on strategies and innovations that will drive growth and profitability aligned with their organizational values.
That’s why many organizations prioritize the creation of a clearly defined mission statement that can be articulated by every member of the team. And, most critically, tie the mission to something deeper than logistics and transactions. Without this direction, it’s hard for anyone to know how to make decisions and prioritize actions.
Having a purpose-driven culture will become even more important as organizations start to hire more freelance workers. According to recent research from Waggl and Medius Advisory Group, 70% of organizations clearly articulate their missions and value statements to on-demand workers. As an example, look at a purpose-driven organization like Lowe’s, which has identified its purpose as “Helping people to love where they live.” This empowers workers in ways that go far beyond merely selling home improvement goods for a fair price.
To effectively transform an organizational culture, you need to start from the inside out, beginning with the foundation of all human relationships: trust. Tweet This!
New research indicates that cultivating high levels of trust is critical for long-term business success and viability. In fact, according to Great Place to Work®, there is such a strong connection between a high-trust culture and business success, they advise strategy-minded leaders who care deeply about the financial wellbeing of their business to make trust a top priority.
“Regardless of industry, company size, or leadership styles, a high-trust culture is a defining characteristic of every company that wins a coveted spot on the Fortune 100 Best Companies to Work For® list that we have produced each year since 1998 with our publishing partner, Fortune. These are companies that consistently outperform their competitors and the rest of the market. They define what it means to be great, and these companies ensure everyone in the C-suite knows how to foster a high-trust culture—which fuels the organization’s continued success.”
For more than 30 years, Great Place to Work® has studied the relationship between a high-trust culture and a company’s overall success. They’ve identified several compelling business outcomes:
- Turnover rates that are approximately 50% lower than industry competitors.
- Increased levels of innovation, customer and patient satisfaction, employee engagement, organizational agility, and more.
FTSE Russell annually conducts independent research that analyzes the cumulative stock market returns of publicly-traded Fortune 100 Best Companies to Work For. According to their research, stock market returns on high-trust organizations are approximately two to three times greater than the market average. In other words, if you invested in the publicly-traded companies featured on the 100 Best Companies to Work For® list (all of which meet the definition of high trust), and each year divested stock in the companies that were no longer on the list and invested in companies added to the list, your returns would be nearly three times that of the general market. In fact, best places to work companies that have exceptionally strong cultures outperformed the S&P 500 by an average of 122%.”
So, it’s evident that trust must be part of the organization’s DNA in order to create a winning culture. But what happens if trust isn’t present in an organization? Can anything be done to cultivate it?
Giving employees a voice
According to the experts, the best antidote for mistrust is creating an open 2-way dialogue between leadership and employees. In traditional organizations, decisions are often made in a closed room with a small, narrowly defined set of leaders, and are rarely shared with the larger organization. But in order to engage the people who will actually execute on those decisions, that has to change. In order for all members of an organization to trust their leadership, they need to have visibility into decisions as they are being made, and into the reasoning behind them.
Providing greater visibility into executive decision-making eliminates the traditional knowledge hierarchy, but it can offer many benefits to the organization as a whole. For one, it builds collaboration between co-workers, teams, departments and offices. Wider dispersion of knowledge can contribute to shared goals, and allow all levels of the organization to grasp the larger vision of what management is working on and where the organization is trying to go builds a shared sense of purpose.
For another, involving everyone in the ideation of solutions often creates a greater sense of connection with the process, which leads to more personal investment. For the organization, this contributes to increased agility, higher performance and, ultimately, more resilience in the face of changing business conditions.
But this kind of visibility needs to run both ways. Not only do employees need to have some transparency into executive decision-making, they also need a forum to express their ideas and opinions. In order to be successful in an environment of constant change, you need to have your finger continually on the pulse of the input from your people. It is clear that the “traditional” annual survey approach is not sufficient for gathering real time feedback.
Fortunately, new trends in pulse technology have created many options for establishing an open forum for continuous feedback. This kind of ongoing stream of 2-way communication generates immediate input, builds alignment across the organization, and facilitates forward momentum and growth.
Providing an open forum for continuous dialogue affords the greatest benefit of all — the ability to tap into the voice of your people. After all, your people are your organization’s most important asset, and there is really no way to transform your organizational culture without listening to their voices.
4 steps toward culture transformation
Enterprise-level culture transformation doesn’t happen in nanoseconds. It takes staying power and a clear focus on the dynamics of the system. That’s why the best approaches combine the power of continuous real-time data within an action-oriented methodology that is grounded in what is going to matter most for your organization. This approach creates both breadth and agility that will keep the organization focused on a process that drives real change.
So what should an organization do if it wants to change its culture? Here are 4 steps toward a successful cultural transformation from Dan Denison, Professor of Management and Organization at the International Institute for Management and Development and CEO of Denison Consulting:
- Clarify how the culture of the organization is influencing the performance of the business. All successful transformations start with a thoughtful discovery process. Interview key stakeholders and utilize technology that gathers and shares real-time input to involve everyone in the organization.
- Establish an accurate and comprehensive baseline. Creating a baseline helps to capture a breadth of understanding around key aspects of organizational effectiveness, which are critically important to long term success and are often closely linked to strategy implementation.
- Crowdsource perspective on key priorities. Disseminate results from the enterprise-wide analysis and use a real-time feedback platform to surface ideas for taking action on those key priorities.
- Pulse the organization regularly. Identify key action indicators quarterly, even monthly, to ensure that the right actions are being taken, allowing for course correction as needed.
Pulse surveys can help provide perspective on timely issues as they arise (e.g., What is most important for leadership to clarify during our upcoming all staff meeting?), but the real value comes from harnessing the power of this technology to facilitate a thoughtful action planning process that is grounded in what matters for managing the business.
Real-time feedback is a valuable way to feed an action-planning process that is grounded in a proven transformation process. It creates connection and collaboration, and when pointed at the organization’s key priorities, creates alignment and facilitates adaptive change across the organization.
Great leaders understand that times of change offer an unparalleled opportunity to grow and thrive. The best way to do that is to tap into the organization’s most valuable asset – its people. By harnessing the collective wisdom of the people who best understand the dynamics of the business, the organization can become stronger and more effective than ever before.