Managers, 80% of your workforce say workplace culture has to change

Source: Getty
  • PwC has released a study that found 80% of respondents need culture change in order to succeed and grow — and retain good staff
  • “Leaders are more confident than they should be that they’re getting culture ‘right.’ But their team members — those who often have less of a say in crafting the direction of culture — are the least comfortable with it”.
  • It’s still up to management and the board to determine what they want their culture to be. The only answer is to work at it, from the ground up.

Milton Friedman and business schools all over the planet taught us that companies and corporations were nothing more than profit maximising vehicles for the benefit of shareholders. That ethos built the culture on which modern business practices and capitalism now rests.

But, as Jonathan Tepper, founder of London-based advisory Variant Perception and author of “The Myth of Capitalism” recently explained to Paul Colgan, in their Devils and Details podcast chat, the oligopolisation of industry has led to adverse outcomes for workers and society more broadly.

That’s a theme picked up by Colin Mayer in his book “Prosperity”, when he notes all the good things corporations do for society but also highlights that “at the same time, it [the corporation] is the source of inequality, deprivation, and environmental degradation, and the problems are getting worse”.

What Tepper and Mayer both highlight is that when it comes to capitalism, companies, and the economy the conversation is changing. What more are Brexit, the election of President Trump, the Italian coalition of Five Star and La Liga, or the more recent riots in Paris, than the most obvious example of this change?

In many ways the conversation is about and goes to, the heart of corporate culture.

That’s important in the context of a recent survey of 2,000 leaders and employees worldwide undertaken by PwC’s Katzenbach Centre. Indeed, there is a clear recognition that something has to give with 80% of respondents saying “significantly/a fair bit” to the question, “in order to succeed, grow, and retain the best people, how much do you think your organisation’s culture will need to evolve in the next three to five years”.

That’s up from 51% 5 years ago PwC said.

Source: www.strategyand.pwc.com

What the study also shows, PwC says, is that there is a disconnect between the top floor and the shop floor.

“Employees feel less positive about their workplace culture than their employers” PwC says. The survey showed that while 63% of the C-suite and Board think their culture is strong only 41% of employees agree with the statement that “what we say about culture is consistent with how people act”.

The authors suggest management is listening to the wrong people and should, “challenge and foster healthy debate and real feedback from people across departments and across levels. Connect with people who are emotionally astute and who have insight into what people care about most”.

That seems doubly important because 48% of employees, compared to 71% at the C-Suite and board level, answered “strongly agree or agree” to the question “culture is an important senior leadership agenda item”.

DeAnne Aguirre, Global Lead of The Katzenbach Center, said “Leaders are more confident than they should be that they’re getting culture ‘right.’ But their team members — those who often have less of a say in crafting the direction of culture — are the least comfortable with it”.

The survey doesn’t seek to say what culture needs to be, just that there is a general feeling companies’ cultures need to change.

It’s still up to management and the board to determine what they want their culture to be.

But in a digitalised world with flatter management structures and the empowerment of employees outside the legacy of “command-and-control” hierarchical structures, there needs to be a better alignment between management and staff if the business is to thrive and succeed. That’s particularly important given that 65% say “culture is more important to performance than an organisation’s strategy or operating model”.

So, if the conversation is changing about the role of companies in the economy and their operations then there needs to be an alignment of what senior management and the board believe is the culture and what their employees feel is the culture. That’s particularly the case given the 80% of respondents who say their companies culture has to change in the next five years.

What to do?

The authors say, “changing culture is tough, and most efforts fail. Our survey found that 42% of respondents believe that their organization’s culture has remained static for the last five years. That’s not due to lack of effort: 23% of employees report that leaders of their organizations have tried culture change or evolution of some form, but acknowledge that the efforts resulted in no discernible improvements”.

Given the high percentage of respondents who believe culture is more important than the operating model that seems untenable.

The only answer is to work at it, from the ground up.

PWC notes that, “influencing culture is hard, and most leaders declare victory too soon”. The key is that cultural change “one-off project, nor can it be implemented top-down”. Rather leaders need to “prepare to persevere through obstacles if you want long-term, sustainable change”.

Critically they also say, “the more ambitious the effort, the more time and more input from people at all levels it will demand”.

Maybe if more individual companies can better align their culture in such a way that empowers the change 80% of survey respondents said si needed then overall we may see an improvement on the result which showed just 57% of employees were proud to be part of their organisation, and maybe then we may end up with a more inclusive capitalism.

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