Shape Culture, Drive Strategy
By Victoria Yeo and Alexandra Nott
In today's glass door era where organisational decisions are exposed and debated publicly, employee engagement and culture have emerged as foundational business issues, not simply HR problems.
This shift is because the data is clear - there is an undisputable relationship between the cultural factors linked to employee engagement and subsequent company performance. High levels of engagement stem from meaningful work, supportive management, growth opportunities, trust in leadership, and a positive working environment. Where people are engaged, companies tend to see increases in both customer service and revenue, marked indicators of success .
What is ‘culture’?
Culture in the organisational sense is a system of values, beliefs and behaviours that shape how real work gets done. A healthy culture is one in which everyone brings their best self to work every day, where they enthusiastically embrace organisational strategies and goals, take pride in their work, and learn from mistakes.
When we talk about organisational culture, there's no point just changing one thing and expecting lasting impact - culture is made up of interconnected attributes that shape the way people think and feel, what they say and how they act. This includes everything from the stories told, symbols used, to our actions, leaders, systems, and organisational structures. What does it say about an organisations’ culture when an Executive Team have their own private lift, when managers are seen consistently working long hours or when communications to staff emphasise financial targets and performance measures but don’t mention the customer the organisation exists to serve? Everything we do in the workplace conveys a message, and this can have real impacts on the results we see.
Just what role does culture play?
Fundamentally, culture enables strategy. Culture, leadership and strategy are the three pillars of any organisation, and being in sync is necessary in order for it to function. A business without an enabling culture is like a stool with only two legs – it’s unstable and not fit for purpose.
Performance can often come down to whether or not the purpose of the company is aligned to and embedded in the culture of that organisation. Purpose-driven organisations tend to have 30% higher levels of innovation, and 40% higher levels of retention.  Actively engaging employees in the vision and ensuring the values reflect this can have a large impact on financial performance – research tells us that companies that proactively manage culture demonstrate revenue growth over a ten year period that is, on average, 516% higher than those who do not.  At Deloitte, we’ve focused on making an impact that matters on our clients and wider New Zealand by fostering a culture which ensures that the people who work here share our passion and purpose. This common purpose and the values that go alongside it informs both the way we work with our clients, and how we develop our own people. We know this has a large effect on our performance overall.
A culture of purpose is a particular consideration for public sector organisations in order to get the best out of a workforce driven towards achieving positive change and making an impact in society. It’s also important if you want to attract and retain millennials, a generation set to take up 75% of the workforce by 2020. Millennials are less interested in what you do than why you do it, and how that aligns with what they care about. 
What can organisations do?
There are seven key principles of culture change that organisations can put into practice in order to achieve the desired organisational culture:
1) Align behaviours
Deliver strategy at three levels - individual, team and organisation. High impact outcomes are created when people understand the context for action, what must be done to create the desired results and how they can make an impact. This has the dual effect of encouraging transparency around decisions and therefore greater trust, and creating a culture where employees feel empowered and take ownership for the success of the business.
2) Own the shadow you cast
Leaders should play an active role in modelling desired behaviours and new ways of working. Leaders must connect with employee’s in a way that inspires and engages them, aligning toward a common purpose. Stores with great customer service reviews are usually those where the manager focuses on culture, providing a service rather than meeting operational targets, and lifting their own management style to model the ‘friendly and attentive’ behaviours they would like staff to demonstrate in their interaction with customers.
3) Make critical moments matter
Ensure leaders and staff recognise the specific moments that can have a real impact on employees and customers, and know what they can do to make these moments count. It could be an interview with a prospective employee, a difficult interaction with a customer or an ethical dilemma; defining the ways your organisation will handle different scenarios will drive the right types of behaviours and give employees positive examples to fall back on in times of stress.
4) Engage, involve and collaborate
Shifting organisational behaviour requires three approaches: 'top-down' to link activities to the business strategy, 'bottom up' to link activities to customer impact, and 'middle out' to identify communication challenges and siloed ways of thinking. Messages should include a purpose, examples from the top, and examples of ways employees can actively participate and make a difference.
5) Think your way to future action
Focus on creating and utilising diversity of thinking to tackle key challenges, build inclusion into work practices to generate new perspectives, apply design thinking to drive innovation and apply agile thinking to deliver early business value through a time-bound process of continuous planning, development and feedback.
Juliet Bourke, a Human Capital Partner in Deloitte Australia, explores in her book ‘Which two heads are better than one?’ the impact that diversity of thought can have on team dynamics and problem solving ability. She describes in one example a study performed by the Massachusetts Institute of Technology; socially sensitive and gender diverse teams were shown to vastly outperform groups with a lack of diversity and inclusion. 
6) Shift beliefs through systems and symbols
Adjust systems and symbols to nudge behaviour in the desired direction, realign beliefs and embed the new culture. Use storytelling to make a message resonate on a personal and emotional level for employees.
7) Make Decisions using deep insight
Use tools, metrics and benchmarks to develop deep insights into people's commitment, willingness, and ability to change. Culture is inherently difficult to measure, but collecting and analysing data on key cultural indicators will inform the structures you put in place, the messages you send and the leaders you choose.
How can we help?
Deloitte are experienced practitioners and market leaders, with a range of tools and methodologies that can help assess your organisation’s baseline culture, identify the appetite and need for culture change and set and implement a cultural strategy for change. Read the following articles to find out more, or get in touch with our Human Capital team.
Useful links and articles:
- Deloitte’s 2017 Human Capital Trends Report addresses how companies are rewriting the rules for a digital age. Read more here: https://www2.deloitte.com/nz/en/pages/human-capital/articles/introduction-human-capital-trends.html
- Deloitte Australia’s May 2017 issue of ‘On the Board’s Agenda’ covers organisational culture and how to recognise signs of a toxic culture. Access the issue here:
- Deloitte’s article ‘The Culture or the Leader’ looks at the impact of leadership on organisational culture. Read the article here:
Victoria Yeo is a Consulting Partner at Deloitte New Zealand. She leads the Strategic Change offering in Human Capital and has worked with a number of organisations within New Zealand, Australia and Asia on complex change programmes and culture transformations.
Alexandra Nott is an Analyst in the Human Capital Consulting team. She has spent the last year working as part of a change management programme and culture transformation for one of New Zealand’s largest agriculture businesses.
 Deloitte, “Global Human Capital Trends 2017” pg. 56
Josh Bersin, “Becoming Irresistible: A New Model of Employee Engagement”, Deloitte Review Issue 16, 2015, referenced in Deloitte “Culture vs. Engagement” (2016), pg. 3
 Deloitte “Culture vs. Engagement” (2016), pg. 3
 “2017 Deloitte Millennial Survey: Apprehensive millennials: seeking stability and opportunities in an uncertain world”, pg. 7
 Deloitte Australia (2016), ‘Innovation, high performance and diversity’, https://www2.deloitte.com/au/en/pages/human-capital/articles/creating-high-performing-leadership-teams.html