Cultural change is a major concern for companies gearing up for growth and adaptation to the digitalized business landscape. And that’s why this is set to be the top HR topic for 2020. Many approaches for handling rapid organizational change overlook the importance of establishing a clear company culture. Leaders that both fit into and align employees with a clear company culture are setting a course for their company’s future performance and success. Cultural change through value fit.
Change starts with company culture
The world of HR continues to emphasize the importance of company culture in recruiting and retaining the best employees. As we talked about in a recent blog, strong company culture is the embodiment of an organization’s values. Establishing values such as collaboration and integrity helps employees get on the same page and work better together. Employees that fit into the company culture are more engaged, motivated and perform better. Simply put: they are less likely to leave the company.
When a company’s goals adapt to changes in the market, it may need to change its culture to align with these. Learning how to manage change effectively is a main challenge for today’s HR professionals and company leaders. A 2015 SHRM survey found that 82 percent of organizations had been involved in a change management initiative involving the HR function over the previous 24 months.
The constantly evolving business landscape calls for many forms of adaptation, from transitioning IT systems to organizational repositioning. Cultural change is just one of the complex transformations that have to be competently managed. Vlerick Business School’s recent HR Barometer 2019 on trends and challenges in Belgian organizations showed that cultural change was a high priority, but one which companies did not feel they mastered. This is problematic, because a strong company culture is the foundation for effectively handling every other type of change.
The importance of leaders that fit in
A clear and positive company culture makes companies more agile and better able to take on rapid change. It’s obvious that a strong company culture requires the right management. However, many companies fall short on effective leadership. A 2017 Harvard Business Review article, “When Leaders Are Hired for Talent but Fired for Not Fitting In” sums up the problem: “Over and over again, organizations are unable to appoint the right leaders. In America, 75% of employees report that their direct line manager is the worst part of their job, and 65% would happily take a pay cut if they could replace their boss with someone better.
A recent McKinsey report suggests that fewer than 30% of organizations are able to find the right C-suite leaders, and that newly appointed executives take too long to adapt.”
This is alarming news for companies who need to manage rapid change to stay ahead. It’s not just a question of properly assessing a leader’s talents, skills, and expertise. There simply isn’t enough of a focus on how a leader’s values fit into those of their team and organization. As the title of the article implies, the result is that too many leaders are hired on talent but fired due to poor fit: in other words, a misalignment of values.
What does it look like?
So what does effective leadership look like? According to Jamie Notter, co-founder and consultant at Human Workplaces, a good leader is “someone who loves the behaviors that drive success.” Company values such as collaboration or innovation can only lead to success if leaders embody them.
Aligning with company’s values
According to Harvard Business Review, there are three critical errors organizations must fix in order to find managers that align with their company’s values:
- leaders’ motives and values: Expertise and experience are important, but they’re an insufficient predictor of leadership performance. Neither are generic personality characteristics like people skills or self-awareness. A good value fit must examine a leader’s motives and values. These dictate what a type of culture the leader will create in their teams.
- Understand their own organizational culture: To find a leader who really fits, it’s important to start with decoding the company’s own culture. Unfortunately most companies have a poor understanding of their own values or how these work in practice.
- Be realistic about the new leader’s ability to actually change the culture: Senior leaders play a crucial role, but they can’t change a faulty management culture on their own. Change may be slow and leaders need the rest of management on board.
Bottom line: unify your company culture
To prepare your company for rapid change, the first step is to clearly define your company culture. As we’ve pointed out before, a surprising number of leaders and employees are unclear about what their company culture even is. And establishing a company culture isn’t a one-size-fits-all strategy. That’s where Twegos comes in. We carry out bottom-up analysis of the value fit of the managers, teams and organization and measure how a candidate fits in. The result is a more unified company culture and employees that are engaged, motivated, and ready for anything the future brings.
Don’t leave your management choices to chance. Twegos’ value fit assessments are based on solid academic research and patented technology that accurately predict how candidates will fit into your company culture. Check out all our tools for happier employees and future-proof companies here.