Transformational Culture

Develop a People-Centred Organization for Improved Performance

David Liddle

• Publisher: Kogan Page
• Year: 2021
• ISBN:
  9781789661095
• Edition: 1
• Topic: Business
• Subtopic: Gestione delle risorse umane
• Index: Business

SHORTLISTED: Business Book Awards 2022 - People, Culture & Management category Company culture is the foundation of business success. Strong culture drives an average of four times more revenue growth, 12% more productivity and half the employee turnover rate. Driven by global health, economic and environmental emergencies and rising social justice and employee activism, organizations are urgently seeking a new cultural model which will enable them to thrive. Transformational Culture provides a blueprint for a fair, just, inclusive, sustainable, and high performing organization. With a foreword from Dave Ulrich and expert analysis of the benefits of a people-focused and values lead organization, it provides 8 transformational enablers to deliver individual, team and business success. Guidance is also included on how to tackle toxic cultures and behaviours, how to shift the dial from retributive to restorative justice, and how to develop humane and human HR and management systems.The book offers practical guidance for HR professionals and business leaders on how to redefine their culture and to embed a unique, practical framework to assist with the resolution of concerns, complaints, and conflicts at work. Tried and tested toolkits and templates plus case studies from organizations who have successfully implemented this approach including London Ambulance Service, Aviva, The FT and British Retail Consortium are contained within Transformational Culture making this an invaluable guide for anyone wishing to put their people and their values first.

Part One

The Case for Change

01

The transformational culture and why it matters

TRANSFORMATIONAL LEARNING

Within this chapter, you will discover answers to the following questions:

• What is a transformational culture and why does it matter?
• Why is the need for a new cultural paradigm pressing and urgent?
• What is the transformational culture triangle?
• How does transformational justice balance procedural justice with restorative justice?
• How can a transformational culture support our organizations to ‘build back better’ following Covid-19, socio-economic uncertainty and ongoing geo-political turbulence?
• Why are power, profit and process no longer the symbols of a successful organization?

What is a transformational culture?

A transformational culture is an organizational culture which is fair, just, inclusive, sustainable and high performing. It offers a new cultural paradigm and a practical framework for organizations which are committed to putting their purpose, their people and their values first. A transformational culture is suitable for organizations of any size and in any sector, bound by a common purpose to develop a workplace where the success of the organization and the success of its employees, customers and stakeholders are inextricably aligned.

The overarching purpose of a transformational culture is for leaders, managers, human resources (HR), trade union officials and others to create the conditions for their employees to reveal the most brilliant versions of themselves. This brilliance can be displayed in an extraordinary and infinite number of ways, each of which is unique to them and which creates a sense of humanity, harmony, interconnectedness and common purpose. This ability to be brilliant and to have the brilliance recognized, nurtured and celebrated by our leaders and our managers is the key to unlocking great employee experience (EX) and world-beating customer experience (CX).

In a transformational culture, the HR systems and management processes which promulgate mistrust, fear, injustice, exclusion, blame and retribution are supplanted with new systems and new processes which institutionalize trust, fairness, learning, growth, dialogue, inclusion, insight and collaboration. This new form of organizational culture requires a significant shift in focus and emphasis. The rewards will be great, measured in terms of enhanced competitive advantage, attracting investment, enhanced brand values and the ability to attract and retain the top talent.

‘People who are influenced so that they feel more in control of their role, more engaged with the organization and who feel they are contributing to the wellbeing of others are more likely to be self-motivated, loyal, productive, creative and healthy.’ (Swart et al, 2015)

To realize these rewards, we will all need to embrace radical change in the way that we lead, manage and administer our organizations. For instance, a transformational culture requires leaders, managers and HR to eliminate their reliance on traditional retributive justice orthodoxies (blame, shame and punish) and embrace a new and exciting form of justice: transformational justice. This new form of organizational justice brings together procedural justice (concerned with due process and protecting rights) and restorative justice (concerned with reducing harm, promoting dialogue and encouraging learning). In so doing, leaders, managers and HR will be demonstrating the very best of transformationalism: putting people before process, resolution before retribution, dialogue before dogma and action before entropy.

The axis of organizational culture is tilting

In recent times, we have witnessed a widespread reorientation of the employee’s relationship with the employer, and this is profoundly changing company culture. New rules are being drawn up around a modern form of social contract between the company and its employees. New lines of acceptable behaviour, tolerance and inclusivity are being defined through behavioural frameworks which align corporate values with the desirable and undesirable behaviours.

In this precipitous, fast-paced and fluctuating world there can be no doubt that concepts of organizational culture and workplace climate have become confused and muddled:

• Home has become work.
• A response to a social justice issue has become a yardstick of an organization’s brand.
• Individualism has become activism.
• Leaders have become servants.
• Investors have become the guardians of our climate.
• Employees have become customers.
• Shareholder value has become stakeholder value.

Add to this mix the fact that organizational culture, workplace climate and leadership behaviours play out in the glare of a relentless social and mainstream media, which can destroy reputations – individual and organizational – in the blink of an algorithm.

To fail to perceive this shift, and to fail to embrace the necessary changes to maintain pace with and keep ahead of the culture curve, could prove catastrophic. But for the organizations which get this right, this could be their greatest moment. The stakes are high and organizational culture seems to be the trump card.

Within this book I do not flinch from asking some of the big questions about culture. I am also privileged to be able to include various interviews and testimonies from organizations which are committed to putting their people and their values first. People such as Jon Slade, chief commercial officer (CCO) at the Financial Times (the FT), whose full interview appears on page 216. I asked Jon why he believes the need for a transformational culture is so pressing:

‘We often talk about “company culture”, but what we really mean is a collection of individual departmental “micro-cultures” that in sum add up to something bigger. The idiosyncrasies of departmental climate run deep with prevailing identities, personality, attitudes and ways of working. They are derived from the personalities who have dominated in the past, the victories, and losses the department has enjoyed or endured over the years, the traditions that have become mainstays of life. But now we encourage our staff, particularly younger staff, to “bring their whole selves to work” – and they are. They are bringing their outrage, their distress and their hopes around social questions such as ethnicity, gender, sexual orientation into the workplace. How they define themselves “out of the office” has become how employees choose to define themselves “in the office”. It is just that there is no longer an office. All this means that we are moved from departmentally-defined culture to demographically-defined culture.’

Clearly, our leaders and managers must learn to engage with and listen actively to their people and do so with a constructive, empathetic and compassionate mindset. Failure to listen, and a failure to engage with their people, will fuel a perception that these leaders are out of touch with the reality of their lives and that they cannot be trusted. These are significant but often overlooked antecedents of organizational decline.

Why is the need for a new cultural paradigm so urgent and pressing?

Organizations are straining every sinew to build back better following some of the most challenging and turbulent times in the past 20 years:

• the 2008 financial crisis with all the serious (and continued) repercussions that the crisis had on organizations, communities, families and individuals around the globe;
• Covid-19 and the tragic toll it has taken, the growing health and social inequalities that it has exposed, the economic and social impact of continued lockdowns, and the rocky and uncertain road to recovery;
• the unfolding climate emergency and the urgent need for organizations to reduce waste, to cut emissions and to achieve net zero in record time;
• continuing division and inequality in our society which has led to a rise in social justice movements such as the Black Lives Matter (BLM) and #MeToo movements.

Some of this is being defined as a growth of ‘employee activism’. I fear this term relegates the shift to the category of ‘unwanted noise’. It is not. Leaders should pay heed and welcome the opportunity to engage with their people on issues that matter to them and establish those new parameters. To do so will engender trust and it will create and sustain a new social contract within our organizations.

Nonetheless, let us not kid ourselves here; these are huge and daunting topics. Very few, if any, of us have had to deal with anything like this before. This is VUCA (Volatile, Uncertain, Complex and Ambiguous) on steroids.

‘I cannot recall a time where it has been more important for companies to respond to the needs of their stakeholders. We are at a moment of tremendous economic pain. We are also at a historic crossroads on the path to racial justice – one that cannot be solved without leadership from companies. A company that does not seek to benefit from the full spectrum of human talent is weaker for it – less likely to hire the best talent, less likel...