Globally, businesses are living in the era of digital transformation. And in the UK – with Brexit on the horizon but the outcomes still unclear – companies look set to face even more extreme disruption than in many other markets.
It is impossible to accurately predict the post-Brexit landscape. Instead of trying to look into a crystal ball and guess what the future will bring, one of the best strategies for coping with change is actually to use core business strengths.
Business leaders need to ask themselves a tough question: is my company’s culture ready to help it thrive during a period of rapid change and how do I measure it?
The business world is beginning to wake up to the idea that organisational culture is actually an essential part of organisational strategy. But old habits die hard, and many still wrongly consider culture to be a ‘fluffy’ idea which is limited to the HR function and mainly related to staff engagement. Perhaps some misguided leaders even consider a ‘good’ culture to simply be an absence of workplace bullying or harassment.
Looking after people’s wellbeing and keeping them motivated is vital to business success, but the meaning of culture goes so much further than these bare minimums.
A successful culture is made up of many complex factors, and is difficult to replicate. But common elements of positive cultures are encouraging staff by challenging faulty processes, leaders demonstrating a good work-life balance to their staff by leaving on time, and recreational activities or treats.
Culture encompasses four vast categories: people, organisation, leadership and technology. Each of these has deeply entrenched patterns and norms, whether by design or coincidence, and they impact almost every part of a business’s operations and effectiveness.
Measuring performance in these areas regularly and systematically is fast becoming a crucial way for businesses to benchmark their success – and predict problems. New tools such as organisational network analysis (ONA) can systematically study an organisation’s communication and socio-technical networks, revealing more profound cultural insights than have been available before. In fact, as business metrics evolve to consider factors that are more complex than just profit and sales targets, companies would be wise to consider whether culture should be one of their new KPIs.
Digging deep into how and why each of these critical elements operates as it does, will reveal where the business is excelling and how it can be optimised. Business leaders need to ask themselves: are certain stakeholders blocking necessary changes? Are processes transparent and people happy to question them without fear of consequences? Is failure embraced as a learning experience, or treated as a humiliation to be avoided at all costs?
The answers to these questions, and many more, are crucial to how inclusive, innovative and adaptable a company is, and therefore how well positioned it is to succeed in a disruptive business environment.
In essence, successful cultures are not about motivating staff – although this is another positive outcome. Businesses with great cultures have the reward of being a responsible employer with happy employees, which in turn means people work more productively.
But culture really boils down to ensuring the best processes are in place to let everyone work to their full potential. According to McKinsey, the companies whose cultures are in the top quarter achieve 60 per cent higher shareholder returns than companies with an average culture. This rockets to 200 per cent more returns than businesses whose culture is in the bottom quarter.
Why is this? Because a supportive culture is vital for enabling people to work productively and have intelligent, creative ideas. Google’s famous office slides are not a gimmick: they are designed to help employees be more effective. In fact, fun has never been such a serious business: as well motivating people, a playful workplace environment benefits health, creativity and productivity.
The future of company culture
In uncertain times, developing a future-proof organisational strategy is a difficult task. Despite numerous expert projections, the exact impact of Brexit is still unknown, and it is likely to continue having a dramatic impact on the business environment for years to come.
Rather than worrying about the future, businesses can set themselves up for success by creating a culture which empowers people to succeed, challenge, absorb and generate change.
Teams that are highly motivated, flexible and creative will have the best chance of executing any pivots that are necessary in tomorrow’s disruptive world. What’s more, they might actually come up with the insights which create the company’s new business strategy.
Thomas Davies is founder and CEO of Temporall