Post on 20-Mar-2020
STRATEGIC LEADERSHIP ISSUES
“Culture and Leadership”
Cheryl L. ThomasManaging Director
Impacting People, LLCWadsworth, IL
thomascherylx@gmail.com847-274-8783
July 31, 2018
Graduate School of BankingJuly/August 2018
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Culture and Leadership
Agenda•Why Culture Matters
•What is Culture?
•Culture and Change
•Strategic Leadership
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Leadership Questions1. Do you know your
organization’s current culture?
2. How do you know?• Observation, Feedback
• Formal Assessments
3. Is it enhancing success, or a barrier to success?
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Why Culture Matters1. Better financial performance
2. Positive customer experience
3. Greater employee engagement
4. Higher levels of productivity
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Why Now1. Economic Recovery
2. Leadership and Management revolution
3. Creating Value for customers and employees
4. Software/technology has reshaped how people engage with each other.
5. Workplaces and spaces are changing• Remote work is becoming a viable option for more people.
• Some companies re-thinking work-at-home
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Re-establishing Trust
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Success and CultureOverwhelming research correlates strong culture to:
Intention to Stay
Cooperation/Teamwork
Quality
Adaptability
Satisfaction
Turnover
Stress
Source: Correlations from Szumal, J.L. 2001
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What Is Culture?The shared values, beliefs,
and behaviors that underscore:
◦how things get done,◦how decisions get made
◦how people interact
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Edgar Shein, Organzational Culture and Leadership
Organizational Culture “The way we are expected to do things around here.”
•Culture is cognitive: what people believe and know.
•It reflects shared values (what is important) and beliefs (how things work).
•It encompasses norms and expectations that influence the way members of the organization think and behave.
•However, norms and expectations (Current Culture) are not always in alignment with shared values (Ideal Culture).
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Copyright © 2015 by Human Synergistics International. All Rights Reserved.
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Values - Exercise
1. What are your institution’s stated values?
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Financial Institutions Values
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Values - Exercise
1. What are your institution’s stated values?
2. What does your institution value?
Why is there a difference?
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The Elements of Culture
•Business Environment
•Artifacts, Physical Settings, Work Environment
•Values and Beliefs
•Heros, “Standard Bearers”, Influencers
•Rituals, Traditions, Known History
•The Cultural Network
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Source: Deal, T.E. and Kennedy, A.A., Corporate Cultures, 2000
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Culture and Engagement Relationship
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Assessing Your Culture
Organizational Culture Inventory
(OCI)
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OCI -Cultural Norms
Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.
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Cultural Style Clusters Constructive Passive/Defensive Aggressive/Defensive
Characterizes behavior that
contribute to one’s level of
satisfaction, ability to develop healthy
relationships and work effectively
with people and accomplish tasks
Represent self-protecting
behavior that promote the
fulfillment of security needs
through interaction with
people.
Reflects self-promoting
behavior used to maintain
one’s status/position and
fulfill security needs through
task-related activities
Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D.
Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.
Types of Cultures
•Constructive Cultures
•Defensive Cultures•Passive
•Aggressive
Source: Research by Robert A. Cook, PhD. Copyright 2003 Human Synergists International
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Constructive CulturesBehavioral norms contribute to high levels of satisfaction, ability to develop healthy relationships, work effectively with people and accomplishment of tasks. Examples:
1. Establishes challenging and realistic goals
2. Employees develop themselves
3. Employees are supportive and open to influence in working with each other
4. Cooperative
5. Sensitive to each others needs.
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Characteristics of Constructive Culture
Humanistic
Affiliative
Achievement
Self-Actualizing ______________________________________________________
•Employees share a set of relatively consistent values and methods of doing business
•New employees adopt values quickly
•Seen by outsiders as having a certain “style”
•Strong alignment among strategy, goals, values, and behaviors
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Constructive Cultures Impact on Performance
•Goal alignment
•Increased motivation and engagement
•Structure and controls without having to rely on bureaucracy
•Efficiency and fewer mistakes/risks
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Defensive CulturesBehavioral norms are self-protecting or self-promoting in order to maintain one’s status or position. Behaviors meet security needs, focused either on the interaction with people, or accomplishment of tasks. Examples:
1. Employees are expected to agree and be liked
2. Employees do what they are told
3. Clear all decisions with superiors
4. Avoid being blamed for mistakes
5. Oppose new ideas
6. Operate in a “win-lose” with colleagues.
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Characteristics of Defensive Culture
Oppositional, Competitive
Power, Perfectionistic
Avoidance, Dependent
Conventional, Approval__________________________________________________________________________________
•Employees focused inwardly (focus on self-protection, promotion)
•Many beliefs but no agreement about what is important
•Behaviors that are disruptive or destructive
•High degree of fear ; little innovation; resistance to change
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Signs of a Culture in Trouble
1. No clear values or beliefs about how to succeed;
many beliefs but no agreement on which is most
important; different beliefs in different areas
2. Behaviors that are destructive or disruptive;
emotional outbursts
3. Short-term focus; morale problems
4. Fragmentation/Inconsistency
5. Subculture values preempt shared company values
Source: Deal, T.E. and Kennedy, A.A., Corporate Cultures, 2000
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Constructive Cultures Matter
Better
Financial Performance
Positive Customer
Experience
Greater Employee
Engagement
Higher
Productivity
Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.
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In a study of 69 companies across a variety of industries . . .
Profitability (Over 3-Year Period)1
Strength of Cultural Norms2
Earnings/Sales Ratio
(n=69)
Earnings/Sales
Volatility (n=60)
Constructive + 0
Passive/Defensive 0 0
Aggressive/Defensive 0 ++
+/- signifies positive or negative correlation significant at p<.05.
++/-- signifies positive or negative correlation significant at p<.01.
0 signifies relationship is not statistically significant.
1Financial data for the three-year period provided by Towers Perrin for 69 companies in various industries.
Ratios are averages for the three-year period; volatility scores are standard deviations. 2Organizational culture data provided by Human Synergistics, based on factor scores.
Research conducted by Robert A. Cooke, Ph.D. Copyright © 2003 by Human Synergistics International.
. . . there were positive correlations between Constructive Cultures and
profitability and Defensive Cultures and sales volatility.
Copyright © 2012 by Human Synergistics International.
Discussion1. Pair up 2 or 3 nearest people
2. Share your OCI results:•Is it Constructive, Passive/Defensive or Aggressive/Defensive?
•What is the primary style? Secondary?•Share 1 or 2 experiences that illustrate your OCI results
•Identify 1 or 2 styles to change
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Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.
How Culture Is Supposed to Work
Philosophy
Mission
Individual
Level
Group Level
Organizational
Level
Goals
Strategy
Ideal Culture Current Culture Outcomes
Values and Beliefs Norms and Expectations Effectiveness
Focus
Measuring
“What should be
expected here”
“The way
we are
expected to
do things
around
here”
“How we’re
doing here”
Assumptions
Espoused
Values
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Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © 1973-2015 by Human Synergistics International. All Rights Reserved.
Organizational Factors
Philosophy
Mission
Structures
Systems
Technology/
Processes
Skills/Qualities
Individual Level
Group Level
Organizational
Level
Goals
Strategy
Assumptions
Espoused
Values
“The way
we are
expected to
do things
around
here”
Ideal Culture Casual Factors Current Culture Outcomes
Values and Beliefs Levers for Change Norms and Expectations Effectiveness
Focus
Measuring
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Leadership Responsibility
“Culture happens. Leaders and
managers can let it happen or
they can manage what happens.
It is a choice!”.
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Wells Fargo
Culture or Strategy?
Leadership Impact?
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Organizational Change Model
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McKinsey 7 S model
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Transformational Leadership
. . . Leadership in which the leader
identifies the needed change, creates a
vision to guide the change through
inspiration, and executes the change
with the commitment of the members of
the group
The non-quantitative ‘stuff’ ultimately is the real
driver of sustained bottom line profitability . . . the
numbers are not the plan!
Culture and Strategy
Strategy alone is not sufficient.“Culture eats strategy for breakfast”
- Peter Drucker
Organizations must have a strongculture that aligns with the strategy and is supported by structure, leadership, management systems, processes, and people. – Edgar Shein
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Current Issues Impacting Strategy
•Non-traditional competitors disrupting the industry
•Need for competitive differentiation
•Cyber-security
•Technology to transform core business activity
•Technology to enhance customer experience
•Integration of Risk Management and Compliance
•Big-data—Advanced Analytics
•Succession/Talent Management
•Mergers/Acquisitions
•Diversity and Inclusion
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Why Strategy FailsCultural Barriers
Turf issues
Blame
Bureaucracy
Hierarchy
Self-Interest
Poor Communication
StrategyLack of . . .
Agility
Bias for Action
Openness and Trust
External Focus
Alignment at the Top
Success
Culture and LeadershipTop Ten Practices
1. Define the desired culture◦ Values described in terms of behaviors
2. Make the Mission/Vision/Values known
3. Hire for “fit”◦ Consider behavioral assessments; screen for
values and competencies
4. Best Practices in Performance Management◦ Clarity of roles and responsibilities (Job
descriptions)◦ SMART goals/clear objectives◦ Regular feedback◦ Coaching/training◦ Rewards tied to performance
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Culture and LeadershipTop Ten Practices
5. Establish and align incentives and rewards
Performance driven rewards
6. Best practices in Staff Development
7. Establish effective lines of defense• Staff and Management attend to the desired behaviors• Human Resources on the Executive Team• Ability to monitor; report issues
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Culture and LeadershipTop Ten Practices
8. Assess and measure Culture• Intentional management
9. Establish shared responsibilities for culture• Executives• Managers• All employees
10. It starts at the top – Board Governance• Own the issue; Lead by example; Cascade culture from
the top; Define cultural leadership attributes; Monitor progress
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Leadership Questions 1. What habits in our culture will get in
the way of achieving our strategy?
2. What qualities do we need to add or strengthen in our culture to support our strategic goals?
3. Do we have the necessary alignment between our strategy, structure, systems and behaviors to execute?
4. What behavioral shifts are needed to align our culture?
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Final Thought
“Corporate culture is the only sustainable
competitive advantage that is completely
within the control of the leader.”
– David Cummings, Co-Founder, Pardot
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QUESTIONS?