In 1988, General Motors (GM) executive Elmer Johnson wrote: “We have vastly underestimated how deeply ingrained are the organisational and cultural rigidities that hamper our ability to execute.”
They were prophetic words, particularly in the context of GM’s near-collapse this year. Early this year, a former employee, Rob Kleinbaum, attributed GM’s imminent bankcruptcy to its internal relationships. “Unless GM’s culture is fundamentally changed, (it) will likely be back at the public trough again and again,” he warned.
Both employees recognised flaws in the company’s employee culture - that system of beliefs, norms, practices and values that guides behaviours.
While corporations display their public identity through mission statements and marketing slogans, the employee culture is more indicative of what’s really going on in the company: how decisions really come about, how emails are composed, how bonuses and promotions are really earned and - most importantly - how people are really treated.
Employee cultures are often glossed over for a valid reason – they are less conspicuous and more difficult to define. But some speculate that culture plays such a large role in an organisation’s functions that it should be at the forefront of HR’s major considerations. “The unsaid culture is so much more powerful,” Rebekah France, Senior Vice President, HR & Communications, BW Shipping advises.
Recently, executives announced priorities for the new GM – customers, cars and culture will be the new measures. “Business as usual is over at GM,” Fritz Henderson, CEO, GM, says – referring in part to the company’s insular culture. The new goal is to create a flatter organisational structure, one which welcomes feedback and encourages more open communication.
Culture does not simply occur - it is built upon the HR frameworks that are visible to the organisation. This framework generates unwritten rules, forming a guide by which employees decide what constitutes acceptable behaviour. What happens within the organisation’s walls affects its output. GM employees had described its culture as bureaucratic and out-of-touch with their needs. Not surprisingly, customers had the same complaints.
Observers say GM is finally getting it right - while changes in financial models are being called for, a transformation in the company’s culture is also essential. However, cultures take time to develop. Skepticism about the corporation’s ability to transform its inner workings is reasonable: culture is certainly not created overnight. And oftentimes it is not consciously or methodically planned.
This isn’t to say that culture completely evolves on its own either. HR has a significant role here. “HR can celebrate aspects and shape the culture,” says France. She says HR’s role is potentially great, but only if it is appropriately integrated from the start. She warns that if HR doesn’t have a fundamental grasp of business strategies for the organisation, it can have unintended consequences. HR staff may know what the ideal culture is, but not what is necessarily best for the business.
A Singapore teacher describes her school working environment as “authoritative.” Trust has to be earned, and if rules are broken, staff are summoned to the principal’s office to explain themselves. “Sometimes we’re treated like students,” she says. “The language is the same. Kids ‘pass up’ their homework; we ‘pass up’ our reports.
“Before class, (students) try to determine how much they can get away with. ‘Is she in a bad mood today?’ they ask schoolmates in other periods; we ask our colleagues the exact same question before meetings with our Department Heads.”
The list of behavioural similarities goes on. In this case, the employee culture is built upon the key relationship in the organisation – that between teachers and students. The classroom serves as a small-scale model of hierarchies and employee communication naturally follows the same pattern. Parallels like these are not unique to the education sector; across various industries, employee cultures take their cues from a central power dynamic.
Some HR professionals believe staff treatment should correspond to customer treatment, because it sends a clear message that the organisation places equal value on both parties. Microsoft, for example, aims to keep its employee environment consistent with its business goals. For example, the company’s focus on efficiency in technology for customers is matched by efforts to build cutting-edge workspaces.
Byron Clayton, HR Director, Microsoft, says this is just one of many company efforts to provide an inclusive employee culture. Recognising that Microsoft is a complex organisation, Clayton says it takes time for people to grasp its cultural nuances. “I have not yet met a person who thought Microsoft was an easy organisation to join,” he says frankly.
Microsoft’s brand name and history work to its advantage. People are proud to work in a reputable and historic company, says Clayton. Nevertheless, HR knows it cannot be complacent. New employee initiations are highly structured, with mentors and coaches, orientations, online training programmes and networking events.
Eventually, as new employees experience the organisation for themselves, they gain a fuller understanding of what it means to be a Microsoft employee. “And then it’s like somebody switches the lights on,” Clayton says. “Once people are out of the woods, retention levels are high. They know how to be successful in the organisation because they are included.”
Diversity is a strong indicator of how far an organisation goes to include all employees. Clayton stresses the importance of allowing employees to express their individuality as well as integrate into the company’s culture. “Every new person changes the DNA a little bit each time,” he says. The balancing act can be summed up in these words: how does HR make the environment help people be themselves but also be the best for the organisation?
Celebrating ethnic and religious diversity is one way to go about it. Staff attended talks about Ramadan to better understand the beliefs of Muslims in the Microsoft community. Some non-Muslim staff abstained from eating and drinking, and experienced firsthand the challenge of fasting while continuing their daily office routines. “It creates a culture of understanding,” Clayton explains.
And this understanding goes beyond religious harmony. Understanding creates trust and a sense of freedom for employees. The informal dress code makes this apparent as well. “Wearing expensive clothes won’t get you anywhere. The talent is inside your head,” Clayton asserts. Jeans and t-shirts represent the Microsoft employee mindset – be practical and comfortable.
Another important external factor in determining employee culture is the country’s cultural context. France works closely with BW Shipping’s offices in Oslo, where she notices a different organisational culture from its Singapore arm. She notes that Scandinavian culture infuses into the offices there, creating a flat employee culture. “In Asia, bosses groom people, whereas Scandinavian bosses have no such responsibilities,” she says.
France believes employers in Singapore are at a unique advantage. With such an international workforce, no single identity is likely to dominate the employee culture. “You can really shape the culture by including all the different ways of doing things,” she says.
Many employers assume their culture is aligned with their mission statement. BW Shipping had a list of “values” which eventually became redundant because they were so common. “Things like ‘team success’ became background noise – who wouldn’t want team success?” questions France. HR had to decide what the goals and values actually meant in practice.
And so HR rethought its priorities. “It didn’t have to be a fancy statement,” France recalls. “We wanted to decide what leadership really holds important.”
The department came back with some more specific responses. From then on, the company strived to “deliver on promises”, “act for the future”, and always “try to improve”. The present culture was built on these values because they were considered “true” to the organisation.
However, BW’s HR also wanted a great team to work with. This was not so much a value – given it had not been achieved yet – but more of an objective. BW Shipping gave itself ten years to achieve its goal – “to have the most inspired and competent employees”. This “aspiration value” allows employees to understand what they need to work towards.
France says this is having an important impact. “If you meet a group of BW people, you will find that they aren’t similar, but they hold the same things important,” she says. Furthermore, no one culture is right or wrong. “The right culture for one company is wrong for another,” she says. “You have to put it in context of what works for the business.”
Although culture itself is difficult to quantify, there are ways to measure its importance to employees. In Microsoft’s employee opinion surveys, a “culture index” is gauged by questions asking how long stafff plan to stay with the company and if they would recommend the work environment to friends and family. How people view the company over the long term is indicative of how the culture is working and what improvements are yet to be made.
Clayton says there are other ways to judge if the present culture is right for the organisation. Attrition rates give employers a good idea. As leaders, managers must carry forward the culture. “They monitor the symptoms – is the heartbeat irregular? If managers resolve the problem by searching for somebody else, they aren’t doing their job,” he says.
A tale of five monkeys
Behavioural scientists placed five monkeys in a cage with a ladder against one wall. At the top of a ladder was a bunch of bananas. A set of sprinklers was installed in the ceiling.
As the monkeys scrambled up the ladder, the sprinklers were turned on, and they got drenched. This process repeated itself several times until the monkeys gave up trying to get the bananas.
The scientists then replaced one monkey with a new one. The new one spotted the bananas and began climbing the ladder. The other monkeys pulled down the climbing monkey. The monkey repeated its attempts several times, facing the same consequences. Eventually, it stopped trying.
The same thing happened when another monkey was replaced. By the end of the experiment, all five monkeys in the cage were replacements, and none reached for the bananas. The scientists put a sixth monkey in the cage. The other five aggressively pulled it down, deterring it from going against the established protocol in their “organisation”.
This study highlights the power of an organisation’s past on its present culture. Stories and histories are passed down, creating rules of behaviour that employees sense without necessarily understanding the reasons behind them.
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