Executive Buy-In Essential & Necessary for Culture Change

Continuing the conversation on the importance of executive buy-in, you cannot expect to change the fundamental culture of your organization unless that change is seen as needed by your CEO and then promoted through actions and words by the CEO directly. A recent article in the Wall Street Journal discussed just this topic:

A study of 30 large corporations done during the past five years by Senn Delaney shows that a program of cultural change led from the top and encompassing every part of the organization can "deliver huge cost savings, improve performance and boost profitability."

In the report, John Roberts, chief executive officer in 1999 of United Utilities PLC of Warrington, England, says: "I saw my role as chief executive being about getting the very best people at the highest level and letting them get on with it, not telling them how to do their job.” …

Chris Roebuck, a visiting professor of transformational leadership at Cass Business School in London, says: "In the right culture, people believe in the organization, in their land manager, and therefore help them perform as much as possible, they think they are valued by the organization, both employers and workers are gaining mutual benefit.”

When employees feel there are valued by the organization and believe in the organization, they will do the right thing. The upscale American department store, Nordstrom, epitomized the truth of this. As the late founder, James Nordstrom was quoted as saying:

“People work hard when they are given the freedom to do the job the way they think it should be done, when they can treat customers the way they like to be treated. When you start taking away their incentive and start given them rules, boom, you’ve killed their creativity.”

This CEO attitude – promotion of a culture of trust to do the right thing – played out in two simple rules for store employees:
1) In all situations, use your good judgment.
2) In other situations, refer back to the first rule.

Have you attempted culture change with executive buy-in? How successful was the effort? Tell me about initiatives in your organization spearheaded by the CEO. What was different in how the effort played out over time?

Why You Must Secure Executive Sponsorship for Strategic Recognition

Securing executive sponsorship is one of our five tenets for strategic employee recognition, but not one I blog about frequently enough. So this week I’m focusing my blog posts on the importance of executive sponsorship, kicking off with an excellent article by Judy McLeish in Engagement Strategies Magazine.

“Employee Engagement is an employee’s psychological and emotional connection with their job, which influences both their loyalty and performance. The definition seems logical enough. So how hard can it be to foster an environment where employees want “to stay; say positive things; and use their discretionary effort to benefit a company”? …

“I believe that this traditional approach on solving for the “whole” has caused companies to brush over those that have the greatest impact on engagement: themselves – in other words, senior leaders and managers. After all, it’s the leader who has to drive engagement, the leader who has to understand how to engage his/her staff, and the leader who has to show progress and motivate change. It’s the engagement of these leaders and managers that companies rely on to move the needle. Yet, according to Development Dimensions International, only 25% of senior leaders and 17% of frontline leaders are highly engaged. No wonder companies are having a difficult time making progress.

“To reap the full benefits of engagement, companies must first engage those that lead the effort. The old adage holds true: “one bad apple can ruin the bunch.” If you have one leader who is actively disengaged, then this leader (according to Gallup) is three times more likely to have disengaged employees working for them. So if this traditional approach of creating company-wide engagement initiatives isn’t delivering the expected results, what should a company do differently? …

“Start by engaging your senior leadership team. We have heard it all before: “It’s not the senior leaders who engage employees it’s the frontline managers.” Wrong…it’s every leader at every level of the organization, and it starts in the Executive Suite. Unless all executives believe in and want to foster engagement, there will be no engagement.”

Judy strikes to the heart of the matter in this piece, which I think needs no further embellishment from me. I’ve addressed it before in a discussion about holding managers responsible for engagement. Are you having a difficult time making progress with your employee engagement efforts? What are you doing to secure executive sponsorship

Employee Alignment with New Objectives in the Recovery

The recession forced many companies to assess the course of their company and adjust their strategic objectives for the new economic reality. But how many of your employees know what those new objectives are? Critically, if they do know the new objectives, do they understand how that change in direction may also affect what and how they should be doing in their everyday work?

As I’ve written before, recent studies show 32% doubt there is even a plan for their business. Only 27% feel they know how to face the challenges of 2010. The cover story of a recent issue of Human Resource Executive addressed this point as well:

“To make matters worse, employees at many organizations are ill-prepared to carry out the new business strategies CEOs and their executive committees are now working so hard to develop. Experts who have studied the situation say that, in recession-altered workplaces, employees are often adrift, without well-defined roles or managers who know exactly how those new strategies should be executed.”

One of the strongest, most positive, and most effective ways of communicating your objectives to all employees is through the work. Reinforce for employees in their daily tasks when they help achieve your strategic objectives while demonstrating your company values. The good news is HR professionals seem to be using this strategy. From People Management:

“Employers are reviewing their reward policies to make them more strategic and performance related in the wake of the recession, the CIPD’s annual Reward Management survey has found. Asked their priorities for the coming year, just over half (52 per cent) of the 800 reward professionals surveyed cited the need to align incentives with corporate strategy.”

The importance of recognition to employees was further highlighted by the Corporate Executive Board (also from the Human Resources Executive article)

“Research by the Corporate Executive Board found that some of the top drivers of employee commitment have shifted significantly. As the recession has limited opportunities for development, workers have come to consider other things more important, particularly individual recognition. According to the study, employee desire for recognition jumped 15 percent from October 2008 to March 2009.”

If employees desire recognition, which is also a powerful means to foster alignment with your strategic objectives, why wouldn’t you pursue strategic recognition to achieve your goals in the recovery?

The Opportunity to Create a New Culture in M&A

Another reality of the recovery is continuing mergers and acquisitions, especially on a global scale. As discussed in a recent Workspan magazine cover story:

“According to a KPMG study, 'Eighty-three percent of all mergers and acquisitions [M&As] failed to produce any benefit for the shareholders and over half actually destroyed value.' Interviews of more than 100 senior executives involved in these 700 deals during a two-year period revealed that the overwhelming cause for failure 'is the people and the cultural differences.' Difficulties encountered in M&As are amplified in cross-cultural situations, when the companies involved are from more than one country. …

“Companies routinely underestimate the value of integrating cultures and its stickiness. Increasingly companies have realized the folly of this approach. Low morale, resignations, unionization, expensive retention Band-Aids, political infighting and outright conflict lead to a sapping of energy and an inward focus rather than competing in the market. …"

Merging companies requires merging company cultures as well as bridging the geographic cultures in global acquisitions. In some M&As, this may involve new geographic cultures never before encountered, which creates potential for serious cultural gaffes and misunderstandings.

I’ve written before on five steps to unite company cultures and goals on acquisitions. But in geographic cross-cultural M&A scenarios, it’s just as important to create and offer a single “language” of recognition that communicates consistently and clearly to all employees, from both original organizations, the company values and objectives.

Use a merger or acquisition as an opportunity to launch a new culture of recognition for all employees.