Cultural red flags

01 December 2023

Dr Kathy McLean OBE, Chair of University Hospitals Derby and Burton, shares five ‘tells’ suggesting that an organisation has work to do on its culture

Culture permeates everything in organisations of all sizes. As GGI’s Joe Roberts writes this week, this ubiquity makes it a tricky concept to isolate and define, but when things go disastrously wrong in an organisation, some sort of cultural issue is usually to be found at the root of the problem.

Boards are responsible for the governance of culture, but it can be difficult to be objective about something so nebulous. So what are some of the red flags board members should look out for when assessing culture in their organisation, to determine whether action is needed?

According to Dr Kathy McLean OBE, Chair of University Hospitals Derby and Burton, and of the integrated care board for Nottingham and Nottinghamshire, boards should start by looking within. She said: “It’s the role of the board to set the culture in any organisation so that’s a good place to start. You can tell a lot from board papers and by just observing the board in action, which is something we encourage, but a red flag might be the way things like patient stories are treated. If a board is only ever willing to hear positive stories, that’s a real challenge suggesting that you’re not in good shape.

“That relates to another potentially serious issue, which is optimism bias. If a board is told that everything’s ok and they just accept it without challenge, that suggests to me that things will come off the rails sooner rather than later. CEOs are very important in this area. If you have a chief executive who has engendered a sense in their team that it’s their job to manage the board and keep them happy, people are more inclined to say ‘yes, we’ll achieve this’ even when they know deep down there’s no chance that they will.

“It’s really dangerous to have that approach and it can lead to really unpleasant surprises when external people look at your organisation and discover that it wasn’t quite how you’d been told it was. What you want is a culture of alignment between what you believe is happening in the organisation and what external assurances provide.”

Another potential red flag area for Kathy is in how an organisation handles speaking up. She says: “Whether it’s handled in-house or outsourced to an independent external organisation, it’s crucial that it’s treated as a huge priority and that it’s frequently talked about at the board. Alongside that is the staff survey, which is one of the most valuable pieces of information any board can receive. A red flag for me would be a board that didn’t take the time to really understand what the survey is telling them – and then acting on it.”

Kathy’s fourth red flag is invisible leadership. She says: “One of the big warning signs is when you hear people in the organisation say ‘I never see the chief exec, I never see the chair, I never see the chief nurse and I wouldn’t have a clue what a non-exec is’. If that’s happening in your organisation, you’re in big trouble.”

During times of great operational challenge, it can be difficult to maintain a long-term strategic view on the future of the organisation and keeping it true to its vision. Kathy’s final red flag would be seeing a board lose sight of this. She says: “The analogy I use is that someone’s spotted a whale, and everyone rushes to one side of the boat to look at it, but that suddenly puts the boat in danger of capsizing. It’s important that the captain remains on the bridge, keeps the boat balanced and looks out for icebergs and so on. It’s so important to keep your shape even in extreme times.”

Meet the author: Martin Thomas


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

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