Cracking culture

30 November 2023

‘The way things are done round here’ has a huge impact on any organisation – Joe Roberts highlights the role of boards in setting the right tone

The concept of ‘organisational culture’ is one of those things that most of us will recognise but find difficult to define. Perhaps the simplest definition came from Deal and Kennedy, who said it was ‘the way things are done round here’, while Edgar Schein described it as ‘a pattern of shared basic assumptions’.

But while different people may define culture in different ways, there are few who would dispute its importance to the modern workplace. There are so many examples of where things have gone disastrously wrong in organisations, and the way things were done there was at the root of the problems.

Reports of public inquiries and investigations are full of instances where it was clear long before an incident or scandal came to light that something was not right, but people in the organisation felt afraid to tell more senior colleagues who could have done something to correct it. There have also been cases where employees tried to escalate concerns but were victimised or simply ignored.

Another common finding of these inquiries is silo working, where a lack of mutual trust, open communication and common purpose prevented different parts of an organisation from sharing vital information and working together for the good of the whole. In other organisations, a rigidly hierarchical approach to leadership and management has left capable, committed people feeling disempowered and disengaged.

Setting the tone

The board is the ‘controlling mind’ of an organisation. It sets the strategic direction, but it also sets the tone. People lower down the organisation, in middle management and at the front line, tend to follow the explicit and implicit cues of those above them about how to treat colleagues and service users and how to get the job done.

In the same way that the board sets strategic objectives and seeks assurance that they are being achieved, it needs to define the culture and behaviours that it wants to see and assure itself that this is how ‘things are done round here’ in reality.

Firstly, the board needs to define its mission and values in a short, simple statement that anyone in the organisation can understand, and it needs to engage its workforce in developing this statement so that they share ownership of it.

The board also needs to lead from the front by demonstrating that it puts these values into practice through its decisions and actions and the conduct of individual members. It should reflect on the extent to which it does so and consider seeking 360-degree feedback.

There should be no tolerance of behaviour that is clearly inconsistent with those values, even when the people concerned are very senior (including board members) or are, in other respects, high performers who ‘deliver the goods’ – a key message here is that what matters is not just getting results, but the way in which you get those results.

Consistent governance systems

The board also needs to ensure that its systems for performance management and assurance are consistent with its values, both in terms of what they measure and how they operate. It is no good the board stating its commitment to long-term decision-making and sustainability if the organisation’s performance dashboard consists mostly of key performance indicators that measure short-term profitability.

Nor is there any point stating a commitment to teamwork, mutual respect and accountability if meetings to monitor the performance dashboard feel to those on the receiving end like an exercise in blaming individuals and bullying.

The board needs to understand the organisation’s actual culture and how this compares with the culture it aspires to. It should discuss this explicitly, whether in the board meeting itself, a developmental seminar, or the workforce committee. Completing a cultural diagnostic exercise can help, and there are a number of validated tools that can be used for this purpose.

Even in the absence of such a review, organisations will typically have a wide range of information available which can highlight potential cultural problems either in the organisation as a whole or in particular departments – human resources statistics about staff turnover, stress-related sickness absence, ethnicity and discrimination, disciplinary procedures and grievances, etc. In the NHS, every trust participates in the national staff survey every autumn, and many large organisations in other sectors have their own surveys.

Qualitative data

The facts and figures need to be triangulated with qualitative data, which can best be obtained by hearing the voice of staff directly through walkarounds, site visits, or question-and-answer sessions.

Some organisations in the NHS now hear a 'staff story’ at their board or committee meetings, where an employee talks about their experience of working for the trust, whether good or bad, similar to the more established practice of hearing patients’ stories at the board. It can also be helpful to find out the views of the organisation’s partners or stakeholders, who may have some insight into its culture from their own dealings with it.

We live in challenging times, so it is likely that there will be at least some difference between aspiration and reality. Cultural change takes time, effort and sometimes money too. The board may need to take a decision to invest, for example, by bolstering its human resources and organisational development functions.

In larger organisations, there should be a programme of leadership and management development for current and aspiring leaders at all levels – first-line supervisors, middle-managers and executives – designed to embed a style of leadership that fits with the organisation’s stated mission and values. It should emphasise the importance of speaking up when something is not right, and of listening to concerns raised by others and acting upon them.

Choosing the right leaders

Recruiting and selecting leaders is one of the most important ways in which the board can shape the culture of the organisation, and they can do this by choosing a CEO and executive team who will set the right tone from the top. Recruitment processes for senior roles must evaluate candidates not just on their professional expertise and ability to deliver, but on their commitment to a positive culture and values, which they should be able to demonstrate through their track record. Needless to say, recruitment processes should also be open, competitive and transparent.

Boards and senior leadership teams should aim for diversity in their membership, in terms of demographics and backgrounds, as a way of demonstrating that they are open to different perspectives and want to create an environment in which all have the opportunity to succeed.

In shaping their organisations’ cultures, boards ought to learn from experience – both from inside their organisations and outside. It can be really helpful, when something has gone wrong in their organisation, for the board to debrief and to consider what can be learned.

It is in difficult times, when it is not easy to do the right thing, that an organisation’s culture is put to the test and truly revealed for what it is. Boards can also learn from examples of best practice in staff engagement and cultural change at other organisations, including case studies from other industries, although they must be careful to avoid simply copying successful approaches from other organisations without taking into account important differences between those organisations and theirs.

Finally, while the tone of most organisations may be set from the top, there are external factors which can influence an organisation’s culture – commissioners, regulators, governments, shareholders and so on. Frequently their influence is constructive - setting standards and providing support and guidance about how to achieve them – but this is not always so.

Unrealistic demands placed on an organisation and its staff by external bodies can change the culture and climate within the organisation markedly for the worse. We have talked above about the importance of speaking up. Boards which rightly encourage their staff to ‘speak truth to power’ should bear in mind that they may sometimes need to do the same themselves.

Meet the author: Joe Roberts


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Prepared by GGI Development and Research LLP for the Good Governance Institute.

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