|Changing Behaviours Without Changing Corporate Cultures|
|Written by David Brunnen|
|Monday, 14 April 2014 15:45|
[A review of Prof. Colin Coulson-Thomas’s paper for the ACCA Governance, Risk and Performance Conference on 28th March 2014.]
"The senior management were pushing these things. You can get double your salary as a bonus, your boss got a bonus, and his bosses got bonuses." The words of a whistle-blower quoted in a BBC report October 2013.
Is it any wonder that many corporate boards are now putting great emphasis on Cultural Change programmes? Waking up and ‘smelling the coffee’ has been aided by a new resolve in the UK’s Financial Conduct Authority.
Martin Wheatley, FCA chief executive, said the mis-selling of these [complex loan swaps] products was a cultural problem. "In some cases the banks were selling more complicated products than they needed to because they made more profit from it. I think there was a particular period - and if we look at the period 2005 to 2008 - where I think the moral compass was lost in banking."
Of course, the issues are not confined to the financial sector – their particular claim to infamy is a product of bigger numbers and wider impacts. Throughout the corporate world attention is focused on failures of governance and various scandals resulting in financial bail-outs, large compensation payments for malpractice and a sharpening of regulatory resolve.
In his recent paper for the ACCA, Prof Colin Coulson-Thomas questions the rush into expensive and lengthy Cultural Change programmes. He questions whether they are well designed, effective or even necessary. He asks, “Is a change of culture actually needed to change behaviours?”
Coulson-Thomas first examines what is understood by ‘culture’. The challenge of definition – so well illustrated by last weekend’s media commentary on a change of ‘Culture Secretary’ – lies at the heart of the issue. Is it more than ‘the way we do things around here’? A ‘customary and traditional way of thinking and of doing things’? Can it be deconstructed into elements of artifacts, values and basic assumptions? In a corporate context, there is, Colin argues, a distinction between the healthy diversity of where people are coming from (their background experiences and attitudes) and their job-focused conduct or behaviour .
The findings of the Professor’s five-year investigation suggest that ‘some aspects of a deep-rooted culture, cherished values and sincerely held beliefs may be very difficult to change, if not impossible within an available time-scale. In contrast, certain changes of behaviour can often be quickly and relatively easily achieved. Those who devise incentive plans and fail to think through their consequences sometimes wish that behaviour changes could not be so rapidly accomplished!’
As a one-time corporate servant I well recall the output of a Culture Change programme. The printed card for every employee with ‘Our Five Values’ was immediately understood by the troops as a prioritised list of the top 5 things that were hopelessly wrong with the company – except the consultants were not brave enough to identify managerial bullying.
The results of Colin’s investigation show that ‘the contemporary focus upon culture and creating or changing corporate values and cultures may be misplaced in many situations and contexts, and difficult for those who favour evidence-based approaches to justify in terms of the results achieved. Obtaining any sort of change of values and cultures is often problematic, and often unnecessary if it is being pursued as a means to an end - the objective being to achieve a change of behaviour’.
Such is the enthusiasm with which Culture Change programmes are sold that the Professor does not shy away from stating what to many may seem blindingly obvious – but in so doing he reinforces the value of independently-minded governance.
‘Organisations today serve customers, buy from suppliers, recruit staff and engage with other stakeholders from a wide range of cultures. The cultural mix can vary by area and location and it can change over time. Certain cultures may expect, and even demand, responses that are quite different from those sought by others. Staff in one function or business unit may need to behave differently from colleagues working in other areas. A culture that is suitable for one group and the relationships that it needs to build might not be appropriate for another’.
Moreover, he observes, ‘Population movements can increase the diversity of a labour force. Mergers, acquisitions and international expansion can increase the range of national and other cultures to be found in an organisation. Micro-cultures may exist and it may be possible to address their differences by a job, task or work-group focused approach. Some senior executives play up the challenge of managing across borders to inflate their own grades and salaries, but studies of critical success factors have shown that the best way of undertaking particular jobs is often very similar in different contexts and independent of culture.
‘Preferences, aspirations and values can also vary within and across different groups. Exercises to define common, universal, human or corporate values often result in statements pitched at such a high level of generalisation as to make them of limited value when navigating the nuances and expectations in a particular situation. One sometimes wonders why so much attention is paid to cultures and values when the priority is often to achieve some form of behaviour change. Is it’, he asks, ‘because people persist in thinking that behaviour change is difficult to achieve?’
Challenging assumptions about culture change
Coulson-Thomas goes on to suggest that corporate boards should challenge assumptions that cultures and values need to be changed. He identifies ways of avoiding the unintended consequences of incentives and lays to rest concerns about stifling innovation or developmental learning and ensuring flexibility.
He is a great advocate for ‘Performance Support’ to ‘allow a wider range of interests to be accommodated and embrace checks and balances to ensure compliance’.
‘A focus upon helping and supporting is conducive of greater customer focus and conversations with developers, adopters and users suggest that the use of performance support can lead to a reduced need for incentives and targets. It can also result in a greater alignment of interests. Individuals in front-line roles can grow in confidence and competence while delivering greater value to customers, clients and the public.’
Reinforcing Positive Behaviours – reducing the negative.
Performance Support’s great strength is, he says, that it ‘can work with the grain. It aims to make it easier for people to behave in desired ways and more difficult for them to undertake courses of action that could lead to financial, quality, regulatory, relational or other problems. The support provided can be designed to increase understanding with each use, capture and share how the most effective people undertake certain tasks, and make it easier for people to do demanding and stressful jobs. Help can be provided wherever and whenever needed, including when users are on the move.’
Any board considering embarkation on a Culture or Management Change would do well to study the Professor’s full paper and references – available via www.coulson-thomas.com or the Spring 2014 issue of Management Services.
He concludes that, ‘corporate culture change programmes may be unnecessary if their purpose is to quickly change specific behaviours in particular areas - and problematic in organisations that need to embrace a diversity of cultures and encourage a variety of approaches and behaviours across different functions and business units. Performance Support can be a cost-effective way of changing behaviour, ensuring compliance, enabling people to remain current and competitive, and delivering multiple objectives without requiring a change of culture or structure.’
|Last Updated on Monday, 14 April 2014 16:10|