Strategy

How a fear of risk is killing workplace culture

Kath Walters /

Organisational cultural in Australian companies is being stultified by an overly cautious leadership style, a survey from the Australian Institute of Management (Victoria) notes, which will be released in full in April.

The new survey of more than 2000 participants uncovered that more than 30% of Australian organisations have a poor workplace culture, according to their own staff. Staff reported that their senior management did little to foster a good working culture and that employees and management teams alike are feeling disengaged. Worse still, the disengaged workforce is likely to stay put, says Carmel Ackerly, the CEO of AIM (Victoria) because they are worried about job security, which in turn further undermines corporate culture.

That is not the end of the bad news from the survey, Ackerly says: leaders are getting ready to leave, adding instability to the mix. This is because they have had enough of the painful business of cost cutting, and want to move to company’s ready to take a risk, where they can make their mark. Ackerly says: “Senior management are leaving, disillusioned about the economy. They haven’t been able to spend, their businesses are in a holding pattern, and they are worn out by the inability to act. If they are unhappy, their ability to bring staff along with them is impaired.

“In reading the survey, I started to wonder if these leaders are depressed. Although we have no evidence for that, it came through in their answers.”

The solution, says Ackerly, is for board to take a risk and act, but there is a sting in the tail of this advice: before acting, company leaders must address their company’s culture. “If you want to take a risk, the first place to look is behind you,” she says.

How to diagnose when your corporate culture needs a cure

Although a positive culture is easy to perceive – happy, energetic and relaxed staff might be some characteristics of such – recognising a poor culture can be harder. She lists some of the typical symptoms:

Absenteeism

A deadly silence when a senior manager asks a question

Insular thinking

Increased return at the local coffee shops

Teams with people who do not connect with each other

Profits falling

Limited innovation

A feeling that “we are starting to lose our edge”.

Improving culture reduces risk

As leaders ready their company for growth, the first place to start is by asking questions of their staff. “If the culture is not what you want, you have to question it, and get staff to question why they are doing things the way they do.

“If leaders say this is the direction we are going, the values we are setting, and then staff need to ask themselves, am I working on those things that will deliver on that direction,” she says.

People can end up being busy with everyone around them convinced they are doing a good job, only to find that their work has nothing to do with the company’s goals, contributing to revenue, serving customers or reducing costs.

Can it be quick?

With a window of opportunity opening for companies that want to list on the Australian Stock Exchange, and an end in sight to political instability of the minority Labor government, leaders will come under intense pressure to move fast once the CFOs open their bulging balance sheets for investment in growth.

The quickest responders will be those with the best cultures: staff will be primed, engaged with the growth strategy and ready for action. Those leaders that have left their culture to stagnate will find they have a longer road to rebuild it.

Look in the mirror

Culture is a leadership issue – if the staff are disengaged it is important that leaders examine their own actions.

However, Ackerly also advises looking carefully at the company’s history. “Don’t diagnose the culture from a single point in time,” she says. “Acknowledge the history of how we got to where we are, when did people dig their heels in and decides they didn’t want to change, and what is the history of that. Maybe three leaders came in to do the same thing, and then everyone ended up back at the same spot.

“Companies have talked about efficiencies, doing more with less, and working smarter, but people are tired of those phrases. So get everyone to agree and explain what you are doing to contribute and work with them to get back on track.”

Culture is not what people see.

Ackerly says a positive culture is a leadership term that few staff relate to as a goal; what they see is how the company operates, treats its staff, handles problems and mistakes and remedies them.

Sometimes, the way people work is inhibiting innovation. The way to achieve change is to ask staff about how they want to work, the values they want the company to embody. For example, they might reveal that the IT system lets the company down because its leaders do not listen.

The task is then one of setting the tone from the top and implementing the strategy from the ground up. Ackerly says: “One you have the leadership ground rules, you have sure people have got a job that is values, and delivers on a purpose and make sure they are accountable for it. People want independence, but holding them accountable is part of what makes them feel valued.”

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