Five warning signs your culture is failing

5 Jun 2019 By Phil Lewis

Your biggest problems are probably people-related, says Phil Lewis, but spotting the issues before they strike isn’t always easy

Businesses talk about process, structure and financial performance. They can forget these factors are always a consequence of interactions between people. These interactions are invisible but omnipresent. They show up in organisational priorities, financial and strategic planning, hierarchical decision-making, recruitment…the list goes on.

When people work well together, the result is effective collaboration, useful innovation, and profitable outcomes. When they don’t? Hello, crushed spirits, bad decision-making and financial loss.

This is proven. Research by Harvard Business School professors John Kotter and James Heskett found that, over 10 years, businesses that focused on how their people work together grew more than four times faster than those that didn't.

Our own research has proven that businesses exhibiting high levels of resilience, responsiveness and innovation are characterised by:

  • Aligned outcomes: Everyone pulling towards the same goal. Arguments and tensions just lead to better outcomes. 
  • Creative capabilities: From top to bottom, everyone is a critical thinker, a problem solver and an ideas person. That’s how change is made and growth is sparked. 
  • Dynamic leadership: Setting clear goals, then giving people both the freedom and the structure to deliver them. 

The problem many leaders face is that they are not conditioned to look at these factors. Instead, they tend to prioritise more commonly ‘understood’ business problems – treating the symptoms, not the cause, of the issues.

So how do you know if, behind the numbers, structures and processes, you are experiencing people-related issues? Look for the following five signs:

Innovation inertia

Lack of progress. Standstill. Drift. When it’s hard to get new things to market, it’s easy to blame a failure of organisational processes, and to focus on developing new ones. But look again: what might be taking place is a form of risk aversion. As human beings, we are not good with ambiguity. Fail to address this and no process, however well-designed, is going to work.

Gammed-up governance

Almost every decision-making process has one function: to slow down or stop decision-making. When things slow, businesses often look to governance, blaming the number of wheels or the number of cogs within them. But behind this can be a lack of clarity about autonomy – namely, where ownership and decision-making accountability really sits. Fail to clarify this and parcels will just keep being passed around.

Technology tantrums

Slack, Yammer and the like have long been praised for speeding up business. But many businesses experience the opposite. This is because such platforms can disguise problems of conflict aversion. Well-managed conflict is essential for progress. Are your people great at saying hard things to each other – but only online? If so, you don’t have a tech problem, you have a communication one.

Consultancy colonies

Many businesses are obsessed by efficiency (as you’ll know if you’ve ever sat in one of their 20-person meetings). Trying to squeeze imperfections out of a firm isn’t just misguided; it potentially undermines growth. It can also create an unhealthy reliance on outsiders to diagnose and solve problems. Is your business colonised by consultants? It’s worth asking if you and they are trying to solve the right problems.

Procurement problems

Finance systems in many companies can make it as challenging to sign off £100,000 as £10m. Recently, one of our client teams asked for ten £100,000 POs to pursue some new ideas. What looked like a systems problem was actually a people one: the agendas of the finance team and those responsible for creative development were simply not sufficiently aligned. Those requests were turned down for reasons of perceived ‘efficiency’, and the initiatives in question died.

It is an unfortunate truth that most, if not all, business problems are people problems. Humans are complex, unpredictable beings, making these issues far from easy to overcome. But when you do manage to create a culture where people are enabled to push your business forward, the results are exponential. 

Phil Lewis is managing director of Corporate Punk

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