FORM FOLLOWS FUNCTION
Corporate culture and belonging is difficult to change and important to get right. It’s impact on the bottom line is apparent and its affect on reputation measurable. Brittany Golob charts best practice in fostering belonging
Culture has been developed over time in the British and American militaries as a result of different perceptions of the force from external sources, the political control over the military and the ways in which force has been used. Military strategists John Nagl and Rupert Smith, who analyse the use of force, both say the relationship between these three factors will impact the military’s capability and, in turn, its organisational culture.
“The cultural characteristics of the British Army set it up for success in counterinsurgency operations,” says Lt. Col. Robert Cassidy of the U.S. Army in his paper on the ‘Salience of Military Culture.’ He says the wars the British Army has fought and the ways in which it is overseen by military and civilian leaders has formed its culture into one that is flexible, adaptable and capable in asymmetrical warfare.
Examining the military’s organisational culture, Peter Wilson, a history professor at the University of Hull, says in ‘Defining Military Culture,’ “A mission provides an institution with a common purpose that justifies its existence and claim on resources, as well as the self-worth, rewards and privileges of its members. A sense of mission is intimately related to an institution’s identity and development and is kept alive in the minds of its members through powerful motivating myths and rituals.”
The ways in which organisational culture has evolved over the course of military history is representative of the ways in which humans naturally organise themselves. And because of that, most companies have followed suit – drawing their organisational cultures from the practices, symbols, stories, histories and governance structures that comprise their business.
Culture can be defined as the, “Values that are shared by the people in a group and that tend to persist over time even when group membership changes,” cites Alan Wilson, an academic with the department of marketing at the University of Strathclyde in his ‘Understanding organisational culture and the implications for corporate marketing.’
Isabel Collins, founder of Belonging Space, a London-based consultancy focusing on building belonging into corporate culture, says, “We are so programmed as a human species to be tribal and being tribal means lots of things. It means that we have to work together and we like being part of a group. On the whole, one of the recurring themes in literature is being abandoned on a desert island or having your individuality taken over. We like to have our individuality, but we like to be in a group. We get a great deal of reassurance at being part of a group and belonging to a group.”
Her approach to belonging takes into account the way humans naturally group together, form relationships between those groups and the ways in which leadership can influence belonging. This is often apparent in the case of mergers and acquisitions, when two or more companies with different cultures are trying to come together as one. Yet, what has also become more common is a focus on culture change as a means of reinvigorating a business and seeing a result on the bottom line.
The Harvard Business Review says between 70- 90% of mergers and acquisitions fail. Most experts cite the lack of integration of cultures as one of, if not the, chief culprit. Difficult mergers like that of American telecoms companies Sprint and Nextel or auto manufacturers Daimler and Chrysler lost billions of dollars in the process.
Businesses focusing on culture do so because they want to either improve their ability to innovate, adapt or compete. Sholto Lindsay-Smith, founder of British brand consultancy Industry, says, “It’s tribal.” Humans, he adds, draw their identities from numerous places making it difficult for some organisations – particularly in professional services and transportation where employees associate with their professional body or union or even the sector itself – to change their cultures. It is therefore more practical to focus on behaviour and values, which are more tangible. If these are addressed, companies can go about developing their entrepreneurialism, innovative spirit or diversity.
In a recent piece on culture in the Harvard Business Review, Jay Lorsch and Emily McTague add, “Culture isn’t a final destination. It morphs right along wit hthe company’s competitive environment and objectives.”
GE Oil & Gas’ chief communications officer, Rebecca Lowell Edwards agrees, “You don’t have to be an economist to figure out that the workforce dynamics are changing so much because the worker/ employer relationship is changing. It requires everyone to be involved with defining the culture, not just the top brass, which is exciting but can also be daunting because not everyone knows what their role is in that.”
Birgitte Skade, group marketing director at Danish facilities management company, Berendsen, which worked with Belonging Space, adds, “We have found belonging is much more than just having a list of values, it’s having something you can believe in. And belonging is absolutely about strategy. A simple statement that you can hold up and ask, ‘Are we doing the right thing?’ If so, then everybody can get behind it, quickly. It saves time, reduces conflict, makes decisions easier. If not then don’t do it; strategically it probably won’t help you.”
The most successful change processes, including Berendsen’s, come from the leadership level. Smith argues that military capability is a product of the leadership offered by generals. That leadership will determine if the military force has the means, the way and the will to achieve its ends.
“Leaders lead by example. Leaders who are not deeply involved in culture creation – communicating a clear vision, setting high standards and expectations, living the values, building belonging and belief, doing it right – are missing a key leadership skill. Ultimately, they are the custodian of the culture, their chief remit to create an environment where the magic happens,” says James Kerr, co-founder of Fable, a leadership- focused change consultancy.
But he adds, “Of course, equally important – more important, in fact – is to create an environment in which everyone has a stake, in which everyone feels a sense of ownership and common cause. The military talk of the ‘strategic corporal,’ the person at the frontline who can change the direction of history depending on the decision they make in the field. They are your other key players.”
Strategic corporals, and their counterparts in business who make up the middle management, are empowered, in asymmetrical and counterinsurgency wars, to make strategic decisions in the field. They are trusted by their subordinates to lead and they have been moulded by the behaviour and culture set out from the top of the organisation to make choices in the best interests of the group. If this level is not engaged during a culture or behavioural change programme, it can lead to dissent among the group and problems within the organisational culture.
Gina Houston, engagement specialist at Instinctif Partners, a London-based communications consultancy, says it’s important for leaders to go into the business and communicate to employees about the potential benefits of any change. She says, “‘What’s in it for me?’ Just keep answering that question. It really shapes the tone of the communications you send out and gives the message to employees that it’s not just about the guys in the head office, it’s about the organisation. It’s the most critical thing that leaders can do going through a period of change like that.”
Houston also advises facilitating cross-functional workshops where people from different parts of the organisation can find solutions for challenges that arise during a change. This creates a sense of belonging and engages them with the new culture, avoiding latent ties to earlier brand values, identities or behaviours.
Collins says humans exhibit a primal reaction to change by clinging to safe ideas and things. If leaders can build a sense of security into the new belonging, they can successfully manage this transition. If they don’t do so, frontline staff lose faith in their leaders. In the first world war, frontline soldiers had no faith in their generals to make the right decisions and thus their sense of belonging was not aligned to their military, but to their comrades in arms. This even extended across the lines as opposing soldiers felt a kinship with enemies in the same roles.
Houston says this is a prime opportunity for communicators to work with leaders and discuss what the messaging strategy will be, but to also equip middle managers to take part in overseeing change. She advises leaders to tell their employees about any news that will affect them first, particularly with regards to mergers and acquisitions. She says, “There’s nothing that destroys trust more than hearing something that you’ve not been a part of.” In an examination of corporate values, the Harvard Business Review says the values should be developed by the CEO, other business founders and leaders and a group of key employees. The 124 year-old Fairfield, Conn. based GE has grown through acquisition and organic development to now include offices in 160 countries. Edwards says reputation and brand have undergone a change over the past half century. External communications, she says, is no longer enough. Employees need to be part of the story and part of the change, “That’s why replenishing your culture and that’s why making sure the nature of your culture is authentic to your brand is critically important.”
Edwards advocates for radical transparency in involving employees in the change process and more broadly, in order to build trust between the CEO and the staff, particularly subject matter experts who can represent the business externally.
GE has a designated training centre for managers to think creatively and develop leadership skills in Crotonville, NY which has helped GE undergo a change process to foster innovative thinking, collaborative working and a changed beliefs system, which Edwards oversees across GE Oil & Gas. Among the strategies the company employed were a sustainable approach to diversity and inclusion, a flattening of the hierarchy, the limitation on the use and prevalence of jargon, a digital transformation and moving the company headquarters from Fairfield to Boston. Edwards says this process will save the business money. But it has also made an impact on culture. “I think people definitely feel empowered and what’s interesting is – particularly for the oil and gas sector – it’s a low point in the sector and its hard to inspire people in a sector like this. When I hear people talking about trying new things or feeling proud, in this environment, that’s a really good indicator that things are changing,” Edwards says.
Big moves in changing corporate culture are often profitable both fiscally and in terms of belonging. But Collins adds, “Rather than the big juicy exciting innovations, the little things everyday that seem very obvious and innocuous, can make a business more efficient and save a bit of money.” By creating a culture that is transparent and innovative, companies can enable those everyday ideas that make the organisation more efficient.
The challenges are not easily overcome. The successes GE and EE have experienced are few. Lindsay-Smith says, “You can’t just say what you think you’d like to be.” By talking to employees and figuring out what the culture is before trying to change it, organisations can better manage change. He says, “Rather than the platitudes, you get the truth about what the culture is really like and you can build on that truth.”
Collins adds, “If you belong to something, you feel strongly about it and you’re aware of what it’s about and you support it. The value is not soft; I think its hard core. The value is in motivation, but it matters because it reinforces what we’re actually part of. It makes our work have more meaning.” The Financial Reporting Council will be instituting required reporting on corporate culture and further detail on governance and stewardship over the coming two years. Thus the correlation between culture, reputation and financial performance is becoming more important.
Changing models of warfare have forced through organisational change both structural and semi- formal – like strategic corporals. That process has been informed by new doctrine from top-level generals, adaptable tactics on the front lines and a changing remit for the use of force. Those factors, like Smith and Nagl say, are what comprise culture and military capability. In the business environment, culture change is no easier and relies upon leadership buy-in, employee engagement and a clear definition of values and purpose. Companies that succeed will see results not only in terms of belonging, but also in terms of fiscal and reputational value.
Calling card - EE gets merger change management right
The merger between Orange and T-Mobile that created EE is hailed as the paragon of best practice in culture management during a merger. Mat Sears, director of PR & corporate communications at EE, was part of the communications team that enabled the change to take place internally. He says, “We kept a strong sense of purpose and people got right behind the company so much so that the company value moved from being about an £8bn company in 2012 to the 12.5bn company that we’ve been sold for just a few months ago. Revenues stayed quite flat and stable, but the perceived value of the company grew £4.5bn. We injected a sense of momentum and that’s what I think I’m most proud of.”
But EE wasn’t a foregone success. Before the merger was announced, the communications teams of Orange and T-Mobile were informed and then brought together in order to create a strategy for the change process. “We all recognised that the biggest challenge was
internally,” Sears says. He likens it to organ rejection after a donation. If a department is not brought together seamlessly and with a unified culture, it will fail at its primary function and people will dissent.
From the outset Sears and his team introduced a common purpose and singular vision that would see the companies become one – at the time a holding company called Everything Everywhere. He says, “We accepted there were two businesses and then we talked the staff through the process of bringing it together. And we did that from the top down. It was very much the number one priority for the leadership.”
Sears says Everything Everywhere was well-received internally as it was communicated about in such a way as to bring people together. No longer were there Orange and T-Mobile employees; everyone belonged to Everything Everywhere. Even throughout the necessary redundancies – a time that can cause rifts between newly-merged organisations – constant communications asserted the singular vision set out at the beginning of the process.
Then, with a new CEO in place, the company made its bid for bringing 4G to the UK – a goal that solidified the new unitary culture Sears’ team had helped create. Sears says, “The communications programme that we put in place was really unifying for the company because what we said was the government is not necessarily going to allow us to launch 4G. But this isn’t about us launching 4G, this is about the UK society. And if we can get 4G into the UK, we will turn the UK from a digital laggard into a digital leader. Everyone got behind it.”
The process took two years from the first announcement of the merger to the brand launch of EE in September 2012. But that time helped the company create belonging and affinity to the EE brand internally. Now, EE has been one of the Sunday Times’ ranked ‘Best big companies to work for’ twice.
EE is a shining example for those working in culture change and belonging as it had strong leadership, engaged employees at all levels and communicated effectively with staff throughout the process. Yet, change is afoot once again. “And now we’ve just been bought by BT and we’re going through this process all over again!” Sears says.