A healthy culture can help steer companies through uncharted waters. And, in a crisis, it may prove to be an invaluable lifeline. So, what has the pandemic taught us about organisational culture?
In a year characterised by uncertainty, one thing is for sure: the organisational culture you had before the pandemic won’t be the same when you emerge.
COVID-19 has meant usual ways of working have been turned on their heads. Teams are dispersed, water cooler catch-ups are over and jobs have been shed due to a recession estimated to cost the Australian economy at least $170 billion.
While culture has not always protected businesses from failure during the crisis, it has added layers of resilience in some instances and exposed fundamental weaknesses in others.
And if the lessons of a crisis are not to be wasted, now is the time for HR professionals to reflect on what the pandemic has taught them about culture.
Reset, reimagine, renew
To better understand the cultural lessons of COVID-19, the Australian Human Resources Institute, in partnership with Dr Marc Stigter, global strategy expert and honorary senior fellow University of Melbourne, recently surveyed more than 230 HR leaders.
They were asked about the impact the pandemic has had on remote working, changes in employee behaviour, the effectiveness of leadership and the extent to which the crisis has changed their organisational culture.
“One of the most interesting findings from the study is that there is almost an equal split between those who say COVID has positively or negatively impacted their culture,” says Stigter. “I find this fascinating, because culture is normally so hard to change.”
Research from cultural change consultancy Human Synergistics shows that organisational culture can typically take years to shift. For instance, it estimates that it takes about three to five years to change from a defensive to a constructive culture.
Stigter says the unprecedented scale of the pandemic has had swift and decisive effect on culture.
“What typically happens during a crisis is that organisations contract and go back to their ingrained practices and habits. But COVID-19 has had such a huge impact – it may create the impetus to reset, reimagine and renew,” he says.
Culture is widely viewed as a key differentiator in how organisations perform, but what does it actually mean?
Aaron McEwan VP research & advisory at Gartner, likens it to quality – it’s hard to define, but you know it when you see it.
He says popular definitions of culture, such as ‘it’s how things are done around here’, are problematic because they make it difficult to measure and manage.
“Some of the difficulties that organisations have in managing culture might come down to the fact that it is often a set of unwritten rules or ways of behaving, and you don’t know that you have contravened them until you do,” he says.
Aaron McEwan is speaking on this very topic at the AHRI SHIFT20 Virtual Conference. Get your tickets today.
McEwan’s view of culture includes a combination of knowledge, mindset and behaviour.
“It’s called workforce-culture alignment,” he says.
“It’s about the degree to which employees behave in a way that is consistent with the values and the aspired culture of the organisation. This gives you something you can measure.”
Measuring culture – and cultural change – has proved challenging during the pandemic. AHRI’s research shows fewer than half of all respondents believe they have the metrics in their organisation to measure cultural change and, while 42 per cent said they are planning to measure it in the future, the metrics remain elusive.
However, it’s a challenge leaders must rise to, says Sally Calder, partner in KPMG Australia’s People and Change team. She says measuring culture has been vital to organisational success during the crisis.
“We spent time building a validated baseline of where our culture was at the beginning of this pandemic and we were very engaged in shaping the culture that we all wanted to hold us through this time of uncertainty.”
An example of this culture emerged early in the pandemic, when KPMG employee groups started Spotify music challenges.
“They put together a playlist, some of them made videos and all kinds of crazy stuff to share, connect and build relationships. While our leaders didn’t design this kind of thing, I know that it happened because we’ve created a culture where anybody’s idea is welcomed at any time. They don’t need to ask permission to bring it to life – they can just run with it.”
“Culture is all about balancing the personal granularity of individual relationships with hard-edge measurements and science,” adds Calder.
“We use science to survey, report and measure it every week. This is what helps leaders to adapt.”
The power of leadership
A key culture lesson to emerge from the crisis is that leaders must never take their eye off the ball.
While open, honest leadership can guide a team through a crisis, Stigter says the opposite can cause a culture to crumble.
“Culture is revealed when you have a crisis, because you see the true qualities of leaders,” he says.
While AHRI’s research shows 3/4 HR practitioners believe their leaders are displaying empathy and care during the crisis, only half stated that their leadership team is energising the organisation and less than half (42 per cent) suggest their leaders have the courage to address their own shortcomings.
Transparency in leadership has been a key lesson from COVID-19, says Calder.
“Look at what’s going on from an economic perspective, let alone a health perspective,” she says.
“As there’s wave after wave and no vaccine yet; we don’t know how long it will go for.”
“Culture is revealed when you have a crisis, because you see the true qualities of leaders.” – Marc Stigter
As the average age of KPMG employees is 27, Calder says most weren’t in the workforce when the 2007–2008 GFC rocked global economies.
“They don’t know what it’s like to live through a major economic downturn,” she says. “So you have to paint the context for people; otherwise it’s very hard for them to understand why you’re making some of the decisions you are.
“The job of leaders is to be context whisperers and make things clear for people.”
Calder adds that leaders aren’t expected to have all the answers, but they should share what they know in an authentic way.
“People need to believe there are solid values that underpin why we are making the decisions that we need to make,” she says.
“We always talk about values-based leadership. At a time like this, if we are wedded to a solid set of principles that support how we work through it, then I think that makes it much easier.”
An agile response
Along with leadership, HR leaders cited themes of communication, flexibility, collaboration and agility as the biggest culture lessons from the crisis.
McEwan expects agile organisations will perform better than others during the crisis as they are more adept at managing uncertainty.
“Agile working is about experimentation, so there’s an inherent willingness to fail. But I would argue that most responses to COVID-19 are the perfect example of wide scale, agile principles in action.”
He cites an example of these principles in action.
“A large Australian media company introduced onsite childcare prior to COVID and, when the pandemic hit and everyone had to work from home, it quickly shifted the childcare program to be virtual to help mums and dads with home schooling.
“I think this is a great example of being agile – taking something that already existed and experimenting with it,” McEwan says.
“You could jump onto Zoom to access the program, and someone would keep your kids occupied while you were trying to do your job.”
Calder says agility includes monitoring cultural health to ensure it supports the organisation’s larger purpose and goals.
“You have to continually be diagnosing the culture and designing the culture you need,” she says.
“This means designing interventions, recalibrating, measuring their progress and adapting.
“We are experiencing this massive cognitive dissonance right now because we have to stay apart to stay safe, and it is the opposite of what our brains want us to do.” – Fiona Robertson
“Doing this in a virtual environment is different, because the subtle clues that you can pick up in a physical space don’t exist anymore,” says Calder.
“I don’t think we are ever going to go back to a world where most people are in an office space. So, the way leaders shape, maintain and build high-performing, enriching cultures is changing. Some people are doing it really well – others aren’t.”
Culture goes remote
Recent research from Gartner shows that 82 per cent of leaders plan to allow employees to work remotely some of the time and almost half intend to allow employees to work remotely full-time in the future.
The majority of respondents in AHRI’s research believe the crisis has taught us that remote working is more achievable than previously thought, but more than 70 per cent believe building a culture with a remote workforce presents a challenge.
Fiona Robertson, former head of culture for the National Australia Bank and author of the recently published book Rules of Belonging – change your organisational culture, delight your people and turbo-charge your results, believes culture is all about belonging. She says organisational culture can be undermined in remote working environments because “seeing the signals of what earns and what loses belonging becomes much harder”.
“We are experiencing this massive cognitive dissonance right now because we have to stay apart to stay safe, and it is the opposite of what our brains want us to do,” says Robertson.
“There’s a whole lot of subconscious work that goes on when we’re physically together.”
“Leaders are having to expend more time and energy on the people part of their work than they probably ever have in the past,” says Robertson.
A matter of trust
Trust has emerged as one of the greatest enablers – and barriers – of a successful remote working culture.
“Research shows that if you report to a manager who trusts you, you tend to be higher performing, more productive and more engaged,” says McEwan.
“That seems to play out during COVID-19 as well.”
Why do remote workers with trusting managers perform better? McEwan says it’s simple.
“If your manager trusts you, you can work in the way you want with autonomy,” he says.
“If you have autonomy over when and how you do the tasks, you can match that to your energy levels and your life commitments, so you can maximise the productivity and output,” he adds.
“If your manager doesn’t trust you and they’re constantly monitoring you, you will do the work when they expect you to do it, and that could be when your kids are coming home from school.”
COVID-19 made remote working mainstream, and this is a positive lesson for workplace culture.
“It democratised remote working because everyone was in the same boat and people who had traditionally worked remotely no longer had to pretend they were sitting at home dressed in their suit and that their life was completely under control,” says McEwan.
This is one of the positive lessons to come from the crisis, says Stigter.
“What COVID may have done is allow people to open up on a more personal level and ask each other how we are all going,” he says.
“That may be a beautiful thing – that people are having more than just a cognitive discussion about work. This would be a wonderful aspect for organisations to try to keep in their cultures.”
This article originally appeared in the October 2020 edition of HRM magazine.