I continue my exploration of how to change the culture in an organization based upon a series of articles in the most recent edition of the Harvard Business Review (HBR) by Boris Groysberg, Jeremiah Lee, Jesse Price and J. Yo-Jud Cheng. This series of articles was based on their research into some 230 companies, together with the leadership styles and values of more than 1,300 executives across a range of industries. Their findings were generally that corporate culture most directly affects employee engagement and motivation, followed by customer orientation. All of this was laid out in their article “The Leader’s Guide to Corporate Culture”. The conference issue is paramount for the compliance professional.

I found this to be particularly significant for any Chief Compliance Officer (CCO) or compliance practitioner for a couple of reasons. First is that having a culture which is dedicated to doing business ethically and in compliance can be the single most important motivation for employees and that the customer base for the CCO and compliance function is employees. This means the focus of who is being motivated and engaged are the primary bastion of compliance. Yet it is the underlying style of your organization, which ultimately will move you towards your overall goal. It is these convergences and how to arrive there that I want to consider today.

As we noted yesterday, to move the needle forward on culture, a company must know where it stands. In an article entitled “What’s Your Organization’s Cultural Profile” the authors suggested asking the following questions as a starting point:

  • What do you most like about the current culture in your organization? Is your organization a caring environment where the focus is on relationships and mutual trust? These types of work environments are warm, collaborative, and welcoming places where people help and support one another. Further, employees are united by loyalty; leaders emphasize sincerity, teamwork and positive relationships.
  • What behaviors and mindsets might you evolve? Is curiosity and learning emphasized in your company? If so, you would expect employees to engage in exploration, expansiveness and creativity. Such companies are inventive and open-minded places where people spark new ideas and explore alternatives. Leaders emphasize innovation, knowledge, and adventure and employees are united by curiosity.
  • How efficient are your organization’s leaders at role modeling the culture? Does the culture tend to be authoritative and hierarchical, most generally defined by strength, decisiveness, and boldness? Such work environments tend to be competitive places where people strive to gain personal advantage. This type of culture is generally facilitated by leaders who emphasize confidence and dominance and where employees are united by strong control oversight and control.
  • What are the characteristics of people who are most successful in your company’s culture? Is your company results oriented, characterized by achievement and winning? Many such workplaces are outcome-oriented and merit-based places where people aspire to achieve top performance. In these businesses leaders emphasize goal accomplishment, where employees are united by a drive for capability and success.
  • When new employees do not succeed in your organization, what is the most common reason? If they failed did these outsiders break the order of the organization that may be more focused on respect, structure, and shared norms. Many such places are methodical places where people tend to play by the rules and want to fit in. In these types of businesses the company leaders emphasize shared procedures and time-honored customs and employees are united by cooperation.

All of these are clearly adaptable for the CCO or compliance professional to use in such a survey.

The authors lay out three phases to setting your new cultural target. Through the prior steps you will understand where you are culturally. After examining your culture, through such mechanisms as the company’s founding and heritage, it’s espoused values, subcultures, leadership style, team dynamics and the impact on the organization today, you should consider the “current and future external conditions and strategic choices and determine which cultural styles will need to be strengthened or diminished in response.” From this, you should “formulate a culture target according to which styles will support future changes.” Finally you should “translate the new culture target into organizational change priorities.” The authors noted, “It should be framed not as a culture change initiative but in terms of real-world problems to be solved and solutions that create value. Focus on leadership alignment, organizational conversations, and organizational design as the levers to guide the culture’s evolution.”

After you have assessed where you are, you can consider where you want to go. The authors note you should “identify culture targets. The best ones have some attributes in common: They align with the company’s strategic direction; they’re important to execute; and they reflect the demands of the external business environment.” Obviously doing business within the context of the law (i.e. legally) should be paramount. But doing business ethically might be considered another step. Here you might consider Dun & Bradstreet and it’s #DoTheRightThing campaign or a similar example of how you can use other key phrases and tools to move forward in this area.

To converge all of these concepts together requires a focused campaign, communicated to your employees, all with the backing of senior management. It also requires employee engagement beyond the first step of communication. Here I thought of Peter Löscher who was hired as the first outsider to become the Siemen’s Chief Executive Officer (CEO) since it’s founding in 1847. Löscher’s attitude when he was hired can be summed up with the following quote from another HBR article, entitled “The CEO of Siemens On Using a Scandal To Drive Change”, where he said, “never miss the opportunities that come from a good crisis – and we certainly didn’t miss ours.” More importantly, Löscher recognized that as strong as a strategy might be, the key is in how you change the culture of the company.

The Siemens story is an important one in both the compliance world and in the greater business world. It demonstrates that a company can change its culture so that it can operate and do business ethically and it has become an example of how a company can do so.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2018