Why culture should to be tied to performance.

Culture is much more than “the way we do things around here”. It’s unique to the fabric of each organisation. Companies that have created extraordinary work cultures have lived through something at times daunting, at times precarious – and come out the other side.

Culture is not something you can take off a shelf and apply to your organisation.

Too often people see developing a culture as a solution to something. Instead, it should be approached the other way: focussing on the performance required, which in turn delivers significantly improved business results, as well as a culture capable of engendering high performance consistently. When the people in an organisation focus on what’s of fundamental importance, their aspirations align with its strategy and everyone does what it takes to move beyond any barriers to greater success.

Case study: Z Energy, New Zealand

When CEO of Z Energy, Mike Bennetts, took charge of the company in 2010 just after it was sold off by multinational Shell, the firm was essentially the branch office of a global institution, suddenly expected to stand on its own as an independent New Zealand company. The organisation was burdened with a 99-year-old “big oil” culture and was desperately in need of a new identity. Bennetts says he began by sitting down and talking with people about culture. He then set incredibly high-performance goals, many of which were met with resistance. Not every person got on board or ultimately remained with the company, but most did.

One reason they did was because Bennetts led people through the steps required to get there – ensuring that the high aspirations didn’t set people up to fail, but rather, to succeed in a way they didn’t know was possible.

“There was no script to follow and I didn’t walk into Z talking about grand plans. We were looking into the unknown. But in a sense, that cleared the way for us to do something bold and declare that some very lofty objectives were actually achievable.

“It wasn’t easy, but eventually people at all levels of the organisation – even our retail franchisees at the fuel pumps – understood what we stood for, and they were on board to deliver.”

Within three years, Z emerged as the number one-preferred New Zealand energy company, received top accolades for its new brand and reputation, more than doubled its book value, and completed a hugely successful IPO.

Case study: Victoria’s Goulburn-Murray Water

Real breakthroughs are possible when leaders understand that culture and performance go hand in hand.

In the wake of the millennial drought when Victoria’s Goulburn-Murray Water was struggling with debt, underperformance, and intense government scrutiny, a newly-appointed executive team took a stand that had observers shaking their heads in disbelief. They told a defeated workforce that the organisation could achieve millions in cost savings, win back consumer confidence, and operate better than ever with a reduced budget.

The work began with a strategic forum involving 28 key leaders – where underlying issues limiting performance were aired, a new strategy was collectively agreed upon, and targets were set. Next came a series of intense management sessions, and a blueprint to guide people at all levels of the organisation as they worked to make progress with cost cuts, a turnaround in consumer confidence, and overall performance. Although many in the company initially thought the senior team “was dreaming,” before too long, those same people were all pulling in the same direction in what would be a true organisational transformation.

How can HR plan for cultural transformation?

• Get absolute clarity of strategy. The culture is an outcome of focussing on the delivery of a well-articulated business strategy. The bottom line and everything that feeds into it has to be front and center.
• Take a leadership stand. The very top leader and all senior leaders must align on the significance of the performance transformation.
• Equip and empower your people. At all levels of the organisation, everyone has to be involved in the process of articulating and embracing the kind of organisation they are committed to being.
• Build the capability to deliver. The development of leaders, managers, and staff will position them to stay on track and ensure that the intersection of strategy, results delivery, leadership, and culture is one of sustained business value.

Cultural change doesn’t have to happen under dire circumstances. You don’t have to have a broken business to want a better one. You might be an HR leader seeking to take your organisation from great to extraordinary – from strength to even more strength. That can be a powerful starting point.