Rethinking business culture

IB puts on its thinking cap to explore challenges and best practices in shaping a winning business culture.

From the pages of In Business magazine.

Most business operators are familiar with the late Peter Drucker’s belief that culture eats strategy for lunch, but how many of them agree with it? Moreover, of those who agree with it, what percentage acts upon it?

Based on feedback from IB’s inaugural Think Tank on business culture, there is agreement about Drucker’s wisdom, but business organizations are searching for some best practice advice. Several years removed from the recession, the good news is that companies have taken more interest in how their culture impacts their business strategy and more of them are ready to tackle the challenge.

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Sasha Truckenbrod, branch manager for the Madison office of staffing firm Robert Half, presented at the Think Tank and senses that local employers are starting to give organizational culture the attention it deserves. “Coming out of the recession, it was about building the team back up, so hiring was a priority,” she says. “Now, a lot of companies are more focused on the retention portion of the culture.

“Talking to human resources managers in the Madison market, while they are still growing and hiring, a lot of them have put forth more effort to develop criteria or strategies to further define their company culture or identify what factors are more important to their employees for retention. There has been a little bit more of a shift there.”

Those attending the Think Tank heard from a lineup featuring Truckenbrod and other speakers who offered advice on how to take on this challenge on several fronts.

Filling generation gaps

Every generation views the generation coming up behind as somewhat suspect, but at a time when some organizations employ members of five generations — from traditionalists of the greatest generation, the smallest part of the workforce at less than 1%, to Generation Z, whose members are just beginning their careers — those misunderstandings can negatively impact culture. The ability to communicate and manage these differences, while stressing the commonalities coveted by each generation, can be the difference between a well-oiled machine and a dysfunctional workforce.

The most talked about generation is no longer the baby boomers; it’s the millennials who now comprise the largest segment of the workforce (37%). Scott Lesnick, a generational expert and author, is one baby boomer who believes that “millennials rock,” but he realizes he could be in the minority.

Baby boomer Scott Lesnick, an author and generational expert, thinks “millennials rock.”

When it comes to building relationships with millennials, Lesnick says communication is a key for baby boomers who once lamented their own parents misunderstanding of them and now find that the shoe is on the other foot. During the Q&A portion of Lesnick’s presentation, several people mentioned the importance of communication and he endorsed that.

“Think about it. With anybody in our life outside of work, if we have a relationship with them, and it’s a good relationship, part of that is because we have communicated well,” Lesnick says. “Why is that any different at work? Today, we sit down, we talk, we share some stories, we can get personal about family and kids, but it’s more about being on the same playing field. The respect is there if you’re a boss or a manager, but ideas and thoughts must be shared a lot more fluidly than they used to be.”

While stressing the common things valued by each generation — respect, ability to listen, mentoring/training, and positive feedback — is one way to establish cohesion, respecting differences is the best way. Different generations bring refreshingly new ways of thinking, such as the Gen Xers (born between 1965–1980) wanting better work-life balance, something boomers probably wanted but were afraid to ask.

Lesnick believes the generations begin to appreciate one another when those changes take place. “They do because then it takes the focus off of work and it shows caring about the individual, not even in a generationally specific way, but it allows them to say, ‘Okay, all of the sudden I’m being looked at and cared for as an individual. My opinions, things that are important to me, actually matter. I like that.’ Sometimes they go back to a time when work-life balance didn’t matter that much, and they didn’t like that feeling.”

It’s all about being inclusive and the workplace culture, he adds. “That’s very, very important. We talk about that all the time, but you can tell the companies that thrive and retain employees. Workplace culture is a big part of it.”

Lesnick touts the importance of giving younger workers different organizational roles to help them grow in their careers, or risk losing them to an organization that will. The millennial characteristic of being fast learners who think outside the box is well aligned with their embrace of challenge, and managers must realize they don’t have much time to win them over.

Think Tank attendee Amber Hansen, a human resources generalist with the Wisconsin Alumni Research Foundation, agrees that she and her fellow millennials want to be challenged. “The best thing that employers can do is embrace millennials and not try to make us fit into roles or organizational structures that don’t also align with our goals,” Hansen states. “We want to be challenged, have opportunities to expand our skillsets, and have meaningful opportunities to contribute to the success of the company.”

If an organization is unwilling to provide such opportunities, or change the way it is currently doing business to support this desire, “then we’ll find another organization that will embrace us and reward us,” Hansen adds.

Obviously, it’s important for managers
to know these generational differences, but it’s also important for the overall workforce to understand them, especially if you hope to shape the entire corporate culture and because, as Lesnick explains, “sometimes now you’ll have millennials literally managing Gen Xers and boomers.” If they can understand some of the nuances, it helps them to communicate more effectively and have a better opportunity to get different ages and generations to work well together.

“Now, that’s just millennial to boomer, but the more we understand, not just about generations but even about the culture, the more people feel included, and the more apt they are likely to feel appreciated at work and not be looking for another job.”

Diversity, the business driver

A strategic embrace of diversity and its sometimes undervalued companions, equity and inclusion, can go a long way toward attracting, retaining, and developing a diverse workforce. More studies have demonstrated the bottom-line value of diversity and inclusion, which is necessary to meet the needs of an increasingly diverse customer base, according to Angela Russell, director of diversity and inclusion for CUNA Mutual Group. “It comes down to the changing demographics of the country,” she notes.

To achieve diversity, organizations must commit to being transformed, says Angela Russell.

Russell cites the importance of having high-level (C-suite) support and a long-term commitment (beyond 3 to 5 years) to diversity, equity, and inclusion (DEI) so that it doesn’t become the flavor of the day. Doing this effectively means committing the organization to being transformed.

She notes that one of Bob Trunzo’s first acts upon becoming chief executive officer of CUNA Mutual was to add inclusion as one of its corporate values. That means it provides opportunities for all employees to contribute, advance, and build value.

An inclusionary best practice at CUNA Mutual is the establishment of various employee resource groups, including groups for African-Americans, Latinos, women, and LGBT employees. With ERGs, people who have similar backgrounds can connect with each other.

To create two-way pressure for cultural change, CUNA Mutual established a D&I counsel of team leaders who can help set the tone and the agenda for diversity and inclusion and take it back to their respective units to infuse it and embed it throughout the business, and an employee advisory committee to percolate ideas up from the grassroots.

There also is a willingness to learn through programs such as racial justice training and come to terms with individual biases, whether implicit or explicit. Russell encourages people to take the free, online Harvard Implicit Association Test, which uncovers bias on race, gender, sexual orientation, disabilities, and other forms. It’s never easy to acknowledge the existence of bias, but organizations that don’t undergo such self-reflection can’t identify and address the biases that exist in their business practices.

“We all have them,” Russell states, and when we let them seep in, they can drive our behavior.



Remote possibilities

More than one-half of companies now offer some type of remote work arrangement, whether it is telecommuting from home or flexible scheduling, according to a Robert Half survey. Employers that offer remote working usually are trying to improve retention rates, gain access to a larger pool of skilled job candidates, or simply improve morale.

However, there are potential pitfalls to avoid, including a lack of accountability, impaired staff cohesion, and the sense of isolation remote work can bring.

Sasha Truckenbrod, Robert Half: Remote workers must have clear expectations.

Those pitfalls are a challenge for management in companies with a significant number of remote workers. One such company is WPS Health Solutions, which has offices in Green Bay, Wausau, and Madison, and remote employees affiliated with each location.

Think Tank attendee Doug Benzine, vice president of MVH (military and veterans health) Operations for WPS, notes that most managers have worked in environments where they manage people face-to-face. “The biggest challenge that we have come across is maintaining that connection with whatever office they are working in because the little things you lose are the social hours, the lunch with staff, and the quick-huddle meetings you have when a hot-button issue comes up,” Benzine says. “It’s not a simple matter of gathering your department anymore. You’ve got to make sure you get conference calls set up, discussions set up, and get everybody in the same room or on the same call. It’s a different challenge from a management perspective. You have to link everybody together.”

All of remote working’s potential pitfalls can be mitigated with engaged management and strong communication, Truckenbrod says. “More than half of professionals, or 53%, wish they had more insight on how their day-to-day duties are making a difference for the organization,” she states. “When you relate that back to the remote workplace and company culture, we need to have a culture of open sharing and knowing what the goals are, and also be very transparent as to how you fit into the specific goals. People want more buy-in and more satisfaction from their employers.”

Remote workers must be actively managed without giving them the sense that supervisors are hovering over them. Establishing clear expectations, communicating goals, and measuring results while encouraging staff and team interaction — scheduling regular face time and including remote workers in company celebrations and events — can help avoid these pitfalls. In addition, supervisors should encourage remote employees to establish boundaries between work and home.

Managers can avoid micromanaging, hovering, and constantly checking in if they have pre-established expectations on when and how they want remote employees to communicate and issue progress reports. Business software allows for real-time updates on progress, so managers don’t have to constantly check in. They can simply monitor progress electronically.

In terms of the percentage of remote time versus face time, a balanced approach is advisable. “All the research indicates that because of the face-to-face interaction and camaraderie, as well as the accountability piece, if there is the opportunity to come into the office part of the week, whatever that schedule or position permits, that is definitely favorable,” Truckenbrod notes. “I’ve read some of our publications on both sides of the coin. For the employer, it’s good because it helps with the overall team morale, but from the employee standpoint, we had done a study on how to make remote working work for the employee, and one of the points was to definitely take time to come to the office. There is no substitute for in-person interaction with your team.”

Passing muster

When it comes to business culture, the focus of Steve King, former executive director of the Center for Professional and Executive Development at the University of Wisconsin–Madison School of Business, has been to make the direct link between culture and business outcomes.

Culture, King explains, is defined by existing behavioral norms — bad or good — and the key to transforming culture is to identify the vital behaviors that ideally should become the cultural norms that drive business results. In effect, teaching leaders how to identify preferred behavioral norms and build plans to institutionalize them are the keys to cultural transformation.

Steve King: Identify behavioral norms that can drive cultural transformation.

King, who now serves in an administrative capacity for the center, cites a case study involving a Midwest food processing company that for the sake of confidentiality he calls Muster and Sons. Management wanted to change its culture even though it was reasonably well run with above average revenue, income, and profit margins and had relatively low turnover among its 1,500 employees, including 1,000 plant personnel. A large segment of the workforce speaks Spanish.

The company’s goal was to accelerate growth over a three-year period and position itself in the upper quartile of industry growth. To achieve the desired level of growth, an analysis suggested introducing a new product line, redesigning key processes, increasing the caliber of its sales force, and changing certain cultural attributes.

In assessing company culture and its impact on business performance, Muster and Sons gathered information from C-suite conversations, a company-wide survey, and focus groups of managers and employees. These methods enabled management to identify helpful cultural strengths, plus cultural “derailers” that hinder business performance and vital behaviors that would help meet the company’s goals.

In so doing, managers were identified as the key to transformation because among the cultural “derailers” identified by employees was their tendency to provide feedback in disrespectful ways, both on the plant floor and in performance reviews. This negative tone tends to erode engagement and stifle innovation, so one vital behavior involved simple common courtesy — to provide feedback with respect and consideration.

That led to some blunt talk with managers. The message, says King, was straightforward: “Your behavior is causing lower productivity in the workplace.”

Simplicity was also a theme of other vital behaviors, which can be construed as best practices such as: setting performance goals together (workers felt that goals did not stretch them enough); seeking ideas for improvement from employees and acting on those that have potential; and doing what you said you were going to do (instead of allowing decisions to be undermined outside the board room).

The implementation plan had to change those vital behaviors through selling the benefits, creating peer pressure, and making people accountable through rewards and consequences. The behaviors became part of every employee’s performance plan, and each worker received training on the proper way to provide feedback and how to advance new ideas.

According to King, the result was more constructive behavior, more engagement with employees, and an upward growth pattern after year three. “They are in the cusp of being in the upper quartile,” King notes, “and senior management believes that cultural work is the key to changing outcomes.”

Manual labor

Policies and processes that impact corporate culture must be communicated thoroughly, starting with the document that introduces new employees to the company — the employee handbook. In addition to complying with employment law, including new rulings handed down by the National Labor Relations Board, any good handbook reinforces key company policies by clearly and consistently explaining them.

Avoid certain traps to ensure your culture and handbook are aligned: QTI’s Jack Williams.

According to Jack Williams, general counsel of the QTI Group, there are certain traps to avoid when making sure your company culture and handbook are aligned. In addition to cultural misalignment, most of those traps are set when organizations establish policies that are difficult to understand, or they try to capture every situation rather than the most critical ones, or they are legally insufficient or inaccurate.

As long as handbooks are clear, well written, and specific to your business, and they set expectations for employees, document legal protections, and undergo frequent review, especially by legal counsel, those traps can be avoided.

Another best practice is training managers on their enforcement and application, Williams adds. “They have to be applied consistently,” he cautions, “or a nonconforming employee can charge bias.”



Beyond check writing

Dan Rashke, CEO of Total Administrative Service Corp., has tasked TASC with the challenge of philanthropic stewardship. In this case, stewardship means engaging its management and non-management employees to give in ways that serve the business and the community.

“We’re big on the servant-leadership approach,” says Rashke, whose company provides third-party administrative services to employers. In a program that’s part culture and part strategy, TASC has created a spectrum of philanthropic commitment that goes beyond writing a check. It’s a level of commitment that helps create brand awareness and opportunities for leadership and community development. “When you inject yourself into the community, or when your employees become active in the community, it creates networking opportunities,” he explains. “So to me, that has business value.”

Dan Rashke of TASC says it’s good business to engage employees in the community.

Across that more engaging spectrum, under the TASC Cares initiative, employees are encouraged to use 40 hours of paid volunteer time to serve the community. Under its Dollars for Doers program, for every hour of volunteering outside of work hours, TASC will donate to the employee’s nonprofit of choice. For a chance to secure a $1,000 company donation to their favorite charity, employees can produce a video about their favorite nonprofit or volunteer activity. These and other programs raised $248,000 for United Way of Dane County, and they are in addition to the company’s own contributions to local charities.

The philosophy behind it is logical. A company does business in a community, its employees work and live in the community, and so naturally the organization wants to improve the community for the benefit of its employees. In Rashke’s view, TASC benefits from resources in the community and for the benefit of the organization and its customers, TASC should pay that back.

There is an element of skill building for the employees in addition to the give and take between the organization and the community. When engaged in the community, sometimes an organization can use what it learns about societal trends to think differently about the business.

In a trend that’s largely driven by millennials, 55% of employees would choose to work for a socially responsible company even if means less pay, according to a 2017 report from America’s Charities. “They want to match up money and volunteerism,” Rashke notes.

Younger employees, in fact, are also driving the very practices of TASC because they are not as likely to give money to charities, but they do want to volunteer or be involved to see their impact firsthand. Younger workers are also more driven by causes rather than organizational contributions, and when they do give they prefer to select the individual organization rather than have a larger outfit distribute it for them.

Strategic giving creates opportunities to give back in ways that are aligned with the business. “It becomes more strategic when you serve both business and social needs,” Rashke says.

Cultural fits: One man’s perspective

In the practice of hiring, it’s almost a chicken-and-egg argument: Would you hire someone who is a bad cultural fit but possesses all the technical skills your organization needs? Given the importance he places on team chemistry, Doug Benzine, vice president of MVH (military and veterans health) Operations for WPS Health Solutions, says his first reaction would be “no way.”

“I wouldn’t hire them because you have to have chemistry within your workforce that allows people to work together and be as efficient as they can,” he explains. “You can program every language in the book, but if you can’t culturally fit with the other people in the organization, that tends to cause a rift in the workforce. You need chemistry in your work teams.”

This is a tough dilemma because not everyone is a perfect fit in every culture, and because unemployment is so low, organizations are in stiff competition for labor. “I’m giving you the worst-case scenario, but if you interview the person and you find they are just a bad fit culturally, it’s really difficult to change somebody’s personality,” Benzine says. “I can train you on skill sets and I can train you on how to code. I can train you to process a claim, but trying to train somebody to reinvent their personality? That’s very difficult, very difficult.”

Twenty years ago, finding the right cultural fit wasn’t the high priority issue it has now become, but Benzine senses that more business organizations are making the link between culture and business performance. One reason for this new emphasis on cultural fitness is that it’s expensive to hire people and then fire them right away, or bring them on and realize they upset organizational chemistry.

“Those who don’t have to hire people don’t understand the challenges that come with it,” Benzine notes. “It’s becoming a very expensive endeavor to go out and recruit, interview, and bring someone on.”

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