Author: Pearse Moran

The theory goes that organisational change – culture change – can take up to 4 years, but few companies these days can wait that long to see results. Incremental change (tinkering around the edges) can be an indulgence you can invest in but real, radical, transformational change needs more urgency. 6-12 months is all you’ve got if you are lucky. So why does it fail? And what do we mean by cultural change?

Organisational culture is typically described as the reasons why people do what they do in organisations. It focuses on the relationships between people and the relationships between the organisational structure and systems (context) and how these shape how people behave.

What does culture look like?

 

Typically there are distinctive cultures in organisations – there is the formal culture, which is the organisational policies and systems; and then there is the informal culture, which emerges as  a consequence of how people respond to those policies and systems , for example, if they are adhering to them or if they find themselves, for various reasons, having to develop workarounds to enable them to get the results needed. What is often overlooked when trying to drive organisational transformation is how people are reacting to the changes being put upon them.

In an organisational transformation, the two levers of culture must be operated simultaneously. With the one hand, you are driving reforms through uplifts in the organisational systems and policies. With the other, you must also be pushing the lever on how people at the individual level must change – that’s in terms of both their mindsets and their behavioural patterns – how they make sense of what’s happening in the organisation and how they must personally change their behaviour.

Lever 1: Systems & Policies / Lever 2: Mindsets & Behaviours

 

 

To enable the first lever to be pulled effectively, a two-way feedback loop is essential. Employees need opportunities to make sense of the new policies and systems being placed upon them, but at the same time, leaders also need to understand how these policies are landing and what barriers are preventing people from understanding and embracing the changes required.

Without feedback, and without an action plan to remove employees’ perceived barriers to adopting change, new policies will not be effectively embedded into the organisation. If people aren’t responding as anticipated or experiencing change as intended, then it is necessary to recalibrate.  If leaders fail to grasp that their role and new systems are not shaping new thinking as a prelude to new behaviour then apathy, resistance or sabotage might result. If employees don’t understand the role they personally play in terms of the new direction and the new behaviours expected of them there is a high risk that workarounds will persist.

Changing mindsets is the key to successful culture change

 

Changing mindsets is the key to successful culture change. Lever one is about having the right systems and policies, and the important part of pulling the second lever is the change story communicated to staff. It is up to leaders to drive that story: Leaders are the loudest message in any organisation, what they do gets replicated and what they reward gets replicated by leaders at every level. It’s critical for the C-suite to role model the stated values of the organisation and realign reward and recognition systems to support stated values. Leaders must take their employees with them on the journey of change, giving them an understanding not only of the path ahead, but also the reasons why change is necessary -  the social context of culture.

Thrusting new ways of doing things, without calibrated and supporting change communications and a clear vision of a future state undermines employees’ trust in leaders and saps their engagement and cooperation with the changes being asked of them.  The consequences of not bringing the people with you is that the old ways will stay with you. This can have dire consequences in business performance, employee recruitment and retention and customer acquisition and loyalty. Change is driven by external factors. If you cannot adapt quickly to these factors the business will ultimately fail.

Most importantly, Map the Journey

 

Start with a clear vision of where you want to be at the end of the change journey; at the executive level draw up a change road map identifying the obstacles to change and the timeline; identify the ‘low hanging fruit’, the quick wins (this will help people to see that you are achieving improvements); have the Board on board; and appoint high level OD (organisational design) person to drive the change.

Please fill out the form below to get in touch regarding your organisation’s needs and we will get back to you as soon as possible. You can also call us on 0430 889 850 or email us directly at [email protected].

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Recently, Managing Values’ Principal Attracta Lagan was asked to present at the Regulating the Game conference in 2024. Specifically, Attracta was asked to address the topic of navigating ethical dimensions in the gaming industry and building sustainable organisational cultures in a post-COVID era. Below are the three key points from her presentation with some added context from our 20 years’ experience in the industry.

Ethical decisions are rarely easy nor dependent on common sense. They more typically require designing enabling frameworks such as a “can we/should we” test to guide decisions as well as hone decision making skills. Ethical decision making does not exist in a vacuum. Leaders must ‘set the table’ for their people by clearly articulating what ethical conduct looks like.

An organisation’s perception of ethics often supersedes an individual’s

 

While research shows that most people would consider themselves to be ethical, the prevalence of unethical behaviour in the workplace is evidence that group priorities often override the individual’s actions.

Specifically, when there is an organisational context which puts more emphasis on the company’s financial goals this can be seen as tolerating or tacitly encouraging compromise, which can undermine employee’s individual ethics and lead to unethical behaviour.

In order to build an ethical culture, an organisation needs systems and processes in place which support ethical decision-making. They need to allow managers and employees to recognise where a conflict between ethical action and business interest’ exists and empower people to make the right decision in the moment.

Actions speak louder than words; it’s not enough to have a nice corporate values statement

 

In our experience, it is often thought by senior leadership that setting ethical expectations in corporate values statements addresses the issue of unethical conduct and communicates this to employees. This is rarely the case. Organisations need to ensure they have the appropriate framework, processes and resources to manage the ethical dimension.

What is an Ethics framework?

A set of expectations, values and behaviours set at the organisational level. An ethics framework could include the corporate values statement, compliance documents or organisational purpose. These expectations need to be enshrined in induction processes, performance management, reward and recognition systems and management communications.

Training & Resources

Training in ethical expectations should be conducted in the onboarding of a new employee, and regularly communicated to existing employees through workshops, surveys and corporate leadership. In our experience, the most successful process for embedding ethics training is through a cascading model where leaders and managers are given the tools to conduct the training with their direct reports on an annual basis.

Measurement & Evaluation

Without active measurement of the ethical behaviour against the above resources, it is impossible to evaluate the success or suitability of the business’s ethical vision. As is often the case in corporate behaviour, what gets measured gets managed. Without review and iterative improvement of the corporate values and expectations, the desired employee behaviours will never develop.

Without having an ethics framework, ethical training & resources for employees, and continual evaluation and review of the organisation’s ethical commitments; ethics are often de-prioritised within an organisation. As in most business practices, ‘what gets measured gets managed’.

Nobody gets it right the first time, it is unrealistic and counter-productive to assume that you will

 

It is not enough to use generic ethical resources for a unique organisational context; ethical behaviour takes nurturing and refinement to succeed. Leaders need to do more than espouse the corporate values; they need to ensure their own actions & those of others are in line with the corporate framework and are highlighted and shared within the organisation often. We often say, “people listen with their eyes”. In other words, they take their lead from the behaviours modelled by their first up line manager rather than some well-intentioned values statement.

Very little consideration is given to the importance of designing business ethics training to speak to the inherent ethical challenges of each unique workplace context. And yet it is less complex than OH&S, SHE or governance and compliance all of which are seen as business essentials. In most cases we are called in to organisations to design and roll out ethical leadership training as a consequence of some ethical failure in the organisation or a perceived disconnect with stakeholders’ aspirations. Rarely are we contacted in order to prevent such events through building an appropriately ethical culture in the first place.

Such cultural training has become more urgent given the 2024’s Positive Duty reform requiring businesses to pivot from compliance priorities to proactive organisational culture design.

So where to from here?

 

The challenge for today’s leaders is to move beyond performative ethics—where values are often espoused but not enacted—to genuinely embedding ethical ambitions within their organisational fabric. It will require a new type of courage; the courage to build a culture that allows for the acknowledgment of missteps as a prerequisite to building organisational learning.

Rather than assuming ethical practices are already in operation and effective, a more realistic commitment might be to one of continuous progress. Business ethics training should no longer be seen as esoteric or discretionary but instead needs to be recognised as an essential component of building an ethical, and therefore successful, workplace culture.

Dr. Attracta Lagan is Principal of leading ethics and cultural consultancy Managing Values. She is currently a member of the team monitoring Star Casino Group, focusing on culture and transformational change. For more information about her work explore our website or email her directly at [email protected].

Please fill out the form below to get in touch regarding your organisation’s needs and we will get back to you as soon as possible. You can also call us on 0430 889 850 or email us directly at [email protected].

Your Name Your Email Your Subject Your Message