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HR Magazine, January 2004 - Is Your company Two-Faced?

By Pamela Babcock  1/1/2004
 
HR Magazine, 
January 2004 Vol. 49, No. 1

Employers who hope that their inconsistent messages will go unnoticed by workers and managers would do better to wish upon a shooting star.

“Employees immediately pick up on differences between ‘what we say’ and ‘what we really do,’ ” says William Rothwell, professor in charge of workforce education and development on the University Park campus of Penn State. “At the individual level, it can hasten employee departures—and thus increase turnover,” he says. At the stockholder level, he adds, culturally inconsistent messages “can hasten decisions to ‘dump’ a stock because management is not perceived to be following its own messages.”

Cultural disconnects can breed problems in other ways as well. Conflicting messages regarding corporate culture may create distrust and cynicism, which can be a factor in prompting—or helping employees to justify—actions as dramatic and deleterious as embezzlement. (See the HR Magazine October cover story," The Five-Finger Bonus.”)

Experts say that cultural inconsistencies may cause workers to grow discouraged, to believe management is disingenuous, to doubt statements from higher-ups and to be less inclined to give their best effort.

They also can work to unravel the culture that some companies try so hard to create—and that may be tied directly to the company’s competitive advantage. Imagine how a nuclear power plant would be affected if it began undermining its stated culture of safety. Or how an accounting firm might lose business if its culture of honesty and integrity were eroded. Or if a company renowned for customer service began to undermine that aspect of its culture.

As a result, companies may be investing significant time and money in creating a culture but may not be reaping the commensurate rewards—especially if, as experts say happens often, executives, supervisors and rank-and-file employees have differing perceptions of the company’s culture.

It falls to HR professionals to define their company’s culture, determine if the company’s behaviors and actions support that culture, and screen potential hires to make sure they embrace the culture, says William G. Bliss, president of Bliss & Associates Inc., an HR consulting firm in Wayne, N.J.

What Is Culture?

If organizations have difficulty maintaining a consistent corporate culture, perhaps it is because culture can be hard to define. In fact, experts don’t agree on a single, simple definition.

Culture can be a “nebulous and undefined aspect of an organization,” says Bliss. He defines culture as “the sum total of values, virtues, accepted behaviors—both good and not so good—‘the way we do things around here’ and the political environment of a company.”

Rothwell offers a slightly different view. He says culture is conveyed chiefly through storytelling, personal experience and observation and is “the manifestation of how we interpret events.”

Culture, experts say, can manifest itself in a variety of ways, including leadership behaviors, communication styles, internally distributed messages (such as hallway posters espousing the company’s emphasis on “trust”) and corporate celebrations (including what companies celebrate and how they do it, and who they treat as “heroes”).

Given that culture comprises so many elements, it is little wonder that terms for describing it vary widely. Commonly used words and phrases, says Bliss, include aggressive, customer-focused, consensus-based decision making, innovative, honest, research-driven, technology-driven, process-oriented, laid-back, hierarchical, family-friendly, risk-taking and whatever-it-takes-attitude.

The difficulty in defining culture not only can make it problematic for companies to maintain consistency but also can make it difficult for employees to inform you when they perceive inconsistencies.

Case in point: Theresa M. Welbourne, president and CEO of eePulse Inc., an HR consulting firm in Ann Arbor, Mich., worked recently with two firms that merged. When she met with employees, some complained that the “culture” had changed. When prompted for examples, employees said the “other company” took away birthday cakes and parties.

Welbourne asked: “So birthday cakes make your culture? They are the core of what you are about—they’re what you do?”

The employees, she says, “saw how silly this was, and when I asked them what was the core, they talked about how they did their jobs. They had enjoyed a lot of professional freedom in how they got their jobs done and flexibility in when they worked; that’s what they wanted to keep. Now that was something I could talk about with the management teams.”

The Management Connection

Most HR professionals believe that local managers provide a vital link in the culture chain between employees and top executives; they also believe managers most directly affect the tone, values and operating principles of a department.

But getting managers to live the company culture can be difficult when they are allowed to play by different rules from rank-and-file employees. And in some workplaces such disparate treatment is not only tolerated, it is an element of the company culture.

Rothwell tells of a company in which hourly workers were disciplined for being late, but those at the level of manager or above were allowed to stroll in whenever they pleased. The inconsistency became so obvious and was perceived as so patently unfair that one morning the chairman of the board stood outside the controlled entrance facility with a Rolex and noted the arrival time of each of the company’s more than 300 managers and executives. Those who were late—even the CEO—had to explain why.

“This issue of ‘rules apply to everyone else except me’ may be at the root of many recent scandals, such as Enron, and it is most definitely a cultural issue,” Rothwell says.

Susan Adam also can attest to the important role managers play in establishing and maintaining corporate culture. Adam is now group vice president for market and organization readiness for Gartner Inc., a technology research firm in Stamford, Conn., but has worked for several other major companies, including L.L. Bean, Chase Manhattan Bank, Publishers Clearing House and the A&P supermarket chain. Along the way, she has seen plenty of situations in which managers were involved in allowing cultural inconsistencies to develop.

In one instance, Adam says, the finance department at a medium-sized organization was proud of the way it treated employees, but found that—despite all its efforts—scores for employee recognition were eroding. Finally, the company ran focus groups and conducted surveys and discovered that interaction with supervisors was the key issue.

“Manager behavior was the primary driver—things like using the employee’s name, meeting with the employee at the employee’s desk occasionally, not answering the phone when they were in a meeting,” Adam says.

Although managers felt they were taking actions that demonstrated employee recognition, employees didn’t see it that way. “The inconsistency was not between stated and applied values,” says Adam, “but between understandings of how that value is demonstrated.”

In another case, says Adam, the operational guidelines and principles developed for a technology-implementation team included collaboration, honesty and accountability—but it quickly became evident that individuals whose opinion differed from those of the team leader were not considered “team players.”

When the team’s project launch date appeared threatened, “those souls who dared to state the risks quickly fell out of favor,” Adam says. After that, team members simply bobbed their heads in agreement at meetings—the new version of “playing team.”

As crisis loomed, one person broke the silence and alerted senior management that the launch date was at risk. But the damage was already done, Adam says. The launch was delayed by months. Costs went over plan, and the team lost credibility.

To make matters worse, the “snitch” was ostracized.

While the team leader’s behavior “was out of alignment with company values,” Adam says that behavior was “encouraged by an overly aggressive launch schedule. Deadlines reigned supreme, and the leader was stuck between competing values—on-time delivery, process orientation and candor.”

In fact, says Adam, the leader “had tried to raise concerns up through the management chain earlier, only to hear that time slippage was unacceptable. He felt stuck.”

Ultimately, the company used the situation as a learning opportunity. All those involved studied how the problem had arisen—and how to prevent it from happening again. And, says Adam, “the leader was given an opportunity to succeed anew, and the company learned a big lesson.”

Taking Stock

Employers have several ways to determine if cultural inconsistency is a problem within their companies.

For example, cultural assessment instruments, or audits, can help identify disconnects. The first step is to ask senior executives how they describe the company’s culture, followed by an organizationwide survey of employee opinions to validate that information.

“Generally, if such an audit has never been conducted, the variance in results will be quite surprising,” says Bliss.

Most effective are audits done by outside consultants, who can be frank with senior management without fearing for their jobs, Bliss says. Audits can identify values that conflict with other values; they also can analyze the actions of both employees and managers to see if they support or undermine the values the company desires. A gap analysis can determine how far the actual culture strays from the desired culture.

“This represents a significant opportunity for the senior management team to develop actionable plans to close the gap,” Bliss says, adding that success depends on the level of commitment given to the change. First, the CEO and senior management must buy in to the need for changes in attitudes, beliefs and behavior. From then on, every action, decision, communication and goal has to be evaluated against the new cultural direction, Bliss adds.

For example, if customer service is a focus of your company’s culture, you should look at how much time employees spend visiting customer sites, how much interaction they have with customers, what customer service training they receive and whether your company “really puts its money where its mouth is,” Bliss says.

It’s a process that takes time. It also takes buy-in from departments other than HR.

“The role of HR is to help facilitate this stuff, but if it becomes just another HR program, then it will more than likely fail because no one has accountability for it,” Bliss adds. “The accountability has to be shared, and it has to show up on performance reviews. People have to be rewarded for it, and the consequences—both positive and negative—need to be there if a company is to value and maintain its culture.”

Welbourne says audits are good for measuring corporate-level factors such as leadership, strategy, pay systems—matters that are decided at the corporate level and are not under the control of individual managers. But she points out that a bottom-up approach focused on employee perceptions also provides advantages. She conducts weekly surveys of employees in which she asks one to three quantitative and open-ended questions. The results are delivered to all managers.

Using open-ended survey questions allows employees to “choose what is and is not important,” says Welbourne. The issues they raise, she says, are “often not addressed in the typical ‘big survey.’ ”

Welbourne says both approaches—audits and surveys—can be valuable, particularly if used together. She points out that a cultural audit can reveal if employees and managers are living the messages from the corporate office; the bottom-up or employee-based approach provides data that is useful to all managers.

While corporate-level factors are important, she says, the way employees’ supervisors and peers implement policies are even more critical. “You can have the greatest ideals in your ‘corporate culture description,’ but it’s up to the team you work with day in and day out to deliver,” Welbourne says.

Watch and Listen

Audits and surveys aside, there are other ways to unearth cultural inconsistencies. For example, 360-degree feedback is important, as is being attuned to employee grumbling and other symbolic actions.

“As cynicism and mistrust develops, members of a workgroup may begin to get their team or affiliation needs met by complaining and ridiculing management,” says Adam. “Not only does this drive disengagement, but morale takes a nose-dive.”

“Often it’s tough to be confrontational with someone,” adds Caren Siehl, associate professor of management at Thunderbird, The American Graduate School of International Management in Glendale, Ariz. Rather than raising the issue of perceived cultural inconsistencies with a supervisor—who could potentially address the issue—workers may instead discuss it with their peers, or they might make fun of the problem.

“If you are a team leader and suddenly notice your team is getting a lot of fun out of sharing Dilbert cartoons about teamwork, that would be a signal that there is a potential observed inconsistency somewhere,” says Siehl.

Rothwell offers an even simpler approach to finding out if there’s a problem. When consulting long-term with a client, he prefers to take an “old-timer” to lunch or dinner and asks questions such as “tell me a story about a time when company words did not match up to company deeds.

“I always get answers to that,” he says.

Steps to Ensure Cultural Consistency

If you hire employees who aren’t aware of your company’s culture, don’t agree with it or flat out ignore it, Bliss says, it can raise costs associated with hiring replacements or fixing poor decisions. Costs increase if you’re hiring a $250,000 senior executive who oversees a staff of dozens of people and whose mixed signals could cause talented employees to quit—or confuse customers, shareholders and others.

A “cultural fit assessment” can help determine how a potential employee’s belief system meshes with your organizational culture. Assessments range from simple behavioral interviewing to highly predictive psychological assessments.

Another option is to use surveys that ask candidates to describe their style; the results are then overlaid onto a company’s style patterns.

Or, when assessing candidates, employers can conduct a cultural-fit interview. Ask candidates how they make decisions. Ask questions that elicit comments about values that your company prizes, such as honesty or integrity. If the description of their worst working environment sounds just like the culture at your business, don’t be fooled into thinking they’ll be successful, Bliss says.

Likewise, hiring a cut-to-the-bone, bottom-line-is-everything executive to manage a creative or innovative staff can result in a major clash.

Rothwell offers another way to lessen cultural disconnects: He tells clients to pair new hires immediately with “high potential” employees who have a good attitude.

If you don’t—and most companies don’t—newcomers are socialized into the culture by the very people who have an attitude problem, he says. Problem employees stop by the new hire’s desk, “eagerly waiting to pounce on newcomers to regale them with horror stories that show what a terrible place to work it really is,” which leads to turnover and morale problems.

“This happens everywhere—from sewer workers to lawyers to college professors to public school teachers to Supreme Court justices,” Rothwell says. “At root are the issues that really matter in whatever the culture is. For college professors, the issue might be ‘How does one really get tenure?’ For executives, the issue might be ‘How does one really get promoted around here?’

“Stories are told to convey the history of the organization as told by the storyteller,” Rothwell says. “Watch out who the storyteller is—and what is his or her agenda.”

Pamela Babcock is a freelance writer based in the New York City area.

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At one company, Employee Appreciation Day featured morning bagels, a blast e-mail of thanks from the company president and an afternoon gathering with food and refreshments. A flier promoting the event instructed employees to “please see your supervisor for a ticket. Cost: $15.”

“When stuff like that happens, the good intentions of leadership are thwarted,” says Scott Cawood, vice president of the Great Place to Work Institute Inc. in San Francisco.

Ensuring consistency between corporate actions and the stated corporate culture may be difficult, but it is worth the effort, says Caren Siehl, associate professor of management at Thunderbird, The American Graduate School of International Management in Glendale, Ariz.

“No matter how hard we try, we are never 100 percent consistent,” Siehl admits. But she says employers need to set their sights high. “If you strive for 100 percent, you’ll probably get 85 or 90 percent. That’s far better than allowing a little inconsistency here and a little there, which is going to drop you to 50-50 quickly.”



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