A strong organizational culture can reduce the need for managers. That’s because when a culture is strong, workers have sufficiently internalized goals and values to act autonomously and effectively without constant direction. “People don’t need to be told what to do—they’re already endowed with the spirit of the place,” explains Glenn Carroll, a professor of management and organizational behavior at the Stanford Graduate School of Business.
Carroll’s remarks came during a Charter virtual event yesterday, which built on the research playbook, “Culture in a Time of Change,” released recently by Charter and supported by Philip Morris International (PMI). He highlighted how a well-managed culture is a driver of both performance and operational efficiency, and noted that roughly 80% of executives he asks say they want to change the culture of their company.
Here are takeaways from yesterday’s conversation about how to best do that:
Start by listening widely. PwC, for example, sought input from thousands of its staff and thousands of its partners, looking to better understand “who we are, who we are for our clients, how we show up and deliver every day in a way that is consistent with our values, [and] what our people need,” explained Yolanda Seals-Coffield, PwC’s chief people and inclusion officer, during yesterday’s conversation. PMI similarly used focus groups to confer with roughly 350 employees from different backgrounds and locations as it crafted its new cultural identity, which it calls the PMI “DNA,” according to Fred Patitucci, PMI’s chief people & culture officer.
Recruit “activators” among your colleagues. “The single biggest change agent that worked for us was something that we called ‘activators,’” said Seals-Coffield. They were over 1,000 employees who volunteered to lead discussions with colleagues and share feedback on what was working and what wasn’t. “We said, ‘This month we want you to focus on our listening skills, so get out there and help our people understand the power of our feedback tool, our team polling tools,’” explained Seals-Coffield. “They went out and they did it their way. They did lunch and learns, they did fun games.” Being activators gave employees access to the firm’s leaders, which was motivating to many of them. “It became this incredible breeding ground for future leaders in the firm, and it gave them access to the leaders that they were going to work with,” said Seals-Coffield.
Communicate key messages repeatedly. “Sometimes the real work is not developing the core values, but in pushing them down,” noted Carroll, adding that you have to “get people at each level to translate them into what exactly that means for them and for their job.” That often requires organizational leadership communicating about the culture until they are tired of hearing themselves. “It gets boring to you, and you have to find a way to make it less boring to you and more interesting to them because it’s got to be repeated time and time again,” explained Carroll, noting former GE CEO Jack Welch’s belief that great managers are “relentless and boring.”
Assess the state of culture and assess individual performance using that lens. PMI uses twice-yearly pulse surveys of its employees to analyze progress on its cultural transformation, asking about areas including engagement, wellbeing, inclusion, and manager effectiveness. It also assesses people managers on whether they’re contributing to the organizational culture as part of their annual performance evaluations. Year-end performance is based 70% on the business results an employee delivers and 30% on “how you display the right behaviors at the workplace,” said Patitucci. The latter is determined based on 360-degree feedback surveys, which include both number grades and comments.
Articulate clearly what’s out of bounds culturally. In addition to defining the positive aspects of culture, PMI has communicated nine undesirable workplace behaviors that undermine its culture, explained Patitucci. They include being disrespectful, abrasive, or harsh, unduly taking credit for the work of your colleagues, and not creating space for introverts to speak their mind. Managers shouldn’t be afraid to ask people who undermine the culture to leave the organization, advised Carroll. He cited the example of Netflix, where co-founder Reed Hastings famously advocated parting ways with “brilliant jerks.” The risk if you don’t do that, Carroll explained, is that colleagues will say “I see what the culture’s worth: If I’m good enough, they’ll ignore it.”
Embed inclusion in your values. “When we think about what it means to have a culture of care, a culture of belonging, a culture of inclusion, you start to see how your DEI [diversity, equity, and inclusion] work just flows so naturally into that,” said Seals-Coffield. “We don’t have to debate the letters and we don’t have to get involved in the word soup that sometimes gets activated around this topic.” She links an inclusive culture to the core business need of “bringing diverse people to address the important problems that our clients are asking our help with.”
Approach artificial intelligence as a culture project. “A big part of our core values is that we are human led and tech powered,” said Seals-Coffield. “We have tried to use that phrase and remind our people that their human intuition, their judgment, their independent thoughts are always going to be critical to the way that we operate, but we are going to have the opportunity to leverage technology in a different way that will enable us to do our work better and faster.” PwC provided generative AI upskilling opportunities to its roughly 75,000 workers in the US and 95% have taken advantage of that. “What we did in the most humble way that we could was say, ‘We are all going to learn on this journey together,’” said Seals-Coffield.
Expect a culture change project to take time. Patitucci said PMI’s culture change is “a journey that will take us three to four years before we go to what I call normalization of the values and behaviors so that they become a normal part of the way you operate in the company, business as usual.” Seals-Coffield said the culture transformation project is a three-year initiative for PwC.
Watch a video of the session and download the related research playbook—Culture in a Time of Change—filled with case studies of how companies including Atlassian, Deloitte, LHH, Microsoft, and PMI have actively shaped organizational culture to support specific strategic shifts. The playbook includes practical takeaways for leaders to apply to their own change efforts, as well as insights from academics and other experts who study culture about how best to steward it through change.