Corporate culture and directors: a relationship that's not always obvious

Sommaire:

1. Efficient directors
2. Culture and Organization
3. Important decisions
4. The importance of communication

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Boards that want to move beyond the status quo need to play a more proactive role in shaping culture, which should not be separated from long-term growth strategies.

1. Effective directors

Directors tend to underestimate the importance of corporate culture, when they should be considering it as one of their key governance imperatives. Culture is inextricably linked to strategy and risk, and can be an organization's greatest asset or liability. Yet recent studies indicate that over 80% of directors do not have a good understanding of the culture that exists in the organizations they serve.

Most directors would struggle to define corporate culture, and those who can don't always know what their role should be in influencing it. Effective directors realize that, in the long term, the way a company does business is as important as short-term gains. Today, more than ever, directors are taking their responsibilities seriously, speaking out and striving to achieve results; but in many cases, the evolving relationship between company management and the board has not found the right symmetry.

Both the company and the board benefit when directors take a more active role in influencing culture.Directors determined to influence workplace culture understand that they must encourage innovation and learning, set ethical standards and promote accountability, particularly with the CEO. Most importantly, directors must take a proactive approach to monitoring culture to foster sustainable success and long-term value creation.

2. Culture and Organization

We use the word "culture" arbitrarily, citing it to explain why things don't, don't or can't change. A powerful force, culture anchors strategy and creates the environment where the best people can do their best. It is this subtle but powerful engine that leaders strive - often in vain - to influence.

Leaders who aspire to defy the ordinary understand that they need to pay more attention to the culture they help create, so that they can understand it, guide it and link it to their growth strategies.What do we mean by "culture"? Legends tend to have different adaptations; truth has no versions.

Both influence - intentionally or not - the cultures we build. Organizations learn by solving problems and adapting to the world around them. When something works well over time and leaders consider it valid, members of the organization begin to teach the behavior or idea to new people. Through this process, new members discover what those around them perceive, think and feel about the issues affecting the organization.Corporate values describe the principles and standards that guide an organization's ethical and business decisions. Organizations typically list elements such as leadership, integrity, quality, customer satisfaction, diversity, good corporate citizenship and a commitment to shareholder value.

While laudable, what wouldn't a successful company value? A list of ideals that any organization would promote doesn't really distinguish your company from others, and you probably won't have any argument about the importance of embracing those ideals. But how? How can directors translate value on paper into value in practice? When companies adopt a change orientation, they see innovation as part of the culture, not as a process or project to which they commit over a period of time. People innovate and change when they see a benefit - when they perceive that change will improve their condition, not when someone else wants them to.

3. Important decisions

Excellent decisions serve as the currency of the organizational realm.When directors consistently make good decisions, little else matters; when they make bad decisions, nothing else matters.Any student of organizational development will tell you that one crucial decision - or, more likely, a series of crucial decisions - has literally separated the companies that have prospered from those that have failed. Every success, mistake, opportunity seized or threat mitigated began with a decision.

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Success doesn't happen without decisions, but neither do mistakes, except when the decision involves indecision - a kind of decision not to decide. When you're playing in the most competitive league you can get into, you'll have mishaps and missteps, but indecision doesn't have to be one of them. However, the culture of too many organizations conspires against success. Decisions - good, bad or decent - get stuck in the bowels of the organization, just as shipwrecks accumulate on an untended beach. Boards create their own bottlenecks and hurt themselves in ways the competition never could. They become their own most powerful competitors - the enemy within.

4. The importance of communication

Communication and information sharing are the foundation of a strong organizational culture. Therefore, directors who aspire to strengthen their cultures need to create a multi-channel communication system that allows everyone to connect with everyone else. This doesn't mean immediately buying the latest technology for instant access to every person, nor does it imply that, in the interests of collegiality, everyone should be copied on every e-mail, an insidious invention of the devil that slows down work across the globe.

This means that everyone who needs to know stays in the loop; everyone must be able to communicate with anyone else; and everyone involved assumes that telling the truth is both desirable and expected. Of course, this kind of communication network can only exist when there is great trust between all participants, and when directors lead the way in trusting employees to have both the skills and the motivation to improve.Directors of exceptional organizations realize that their values must address thorny issues and provide a compass for navigating uncharted seas, even when the price to pay is high.

Instead of writing these values on a plaque in the foyer, managers live - and expect management to live - them. These managers set the tone at the top and lead the never-ending journey to discover new and better ways of solving problems and adapting to the world around them. When something works well over time and the directors deem it worthwhile, they lead the charge to teach behaviors, values and ideas to new people and reinforce them with existing employees.

Through this process, people discover what those around them perceive, think and feel about the issues affecting the organization.Directors who hope to create exceptional organizations realize that they must act as culture managers - the people who help create the environment where Talent can consistently and consciously challenge the ordinary and make the tough calls.

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