Systems, Culture and COVID19
Following on from my thoughts on Agility, Culture and COVID, how should your organisation’s systems work alongside your Culture, and the impact of COVID19?
Your organisational culture can be viewed as a set of Values that reflect the attitudes, mindsets and beliefs that determine how you go about delivering a product or service.
So how can you ensure your organisation functions in a manner that is aligned with these Values? If you feel like this is a little vast and daunting you would be right! However it is critical that the alignment is there, otherwise your organisation will be like a rocket with one engine not firing - you will not be heading in the right direction.
I would like to introduce you to a model I have been using for nearly thirty years - the Six Facets of an organisation. These facets enable you to focus on manageable “chunks” so you can work with your people to identify areas where alignment with your values could be lacking (and possible barriers to your Values being demonstrated). Over the course of the coming articles, I will run through each facet, discuss your current situation and how aligning your Values will have a positive impact on your organisation now and when we pivot into the recovery phase.
Today I would like to explore the Systems Facet. We define Systems as your policies, procedures and decision-making frameworks that enable your organisation to function. Examples may be your performance management framework, your financial approvals process, your remuneration strategy, your IT systems which enable people to work from home (WFH), or your procedures for ensuring your people have what they need to maintain their health, safety and well-being.
As you are required to make often complex decisions in a new, unfamiliar environment, your current systems, policies and procedures may no longer be fit for purpose. What will give you comfort and confidence are your Values - they will maintain your organisation’s agility to continue to operate at this time.
We don’t have space within this short article to look at all systems so I am focusing on some of the key ones relevant for this time.
Working from Home – If you have a stated value around caring for your people and enabling them to achieve their potential, are your WFH systems in a COVID world reflecting and aligned to that value?
Do your IT systems support remote working? Do they provide a variety of different communication channels for staff to interact? How easy is it for people to access information from co-workers and managers?
How have you taken into account the different home environments within which your people are working? Are your expectations equal - for parents, particularly solo parents? Do you expect them to complete an 8-hour day? Is this realistic and if not, what is? Do you still pay them for an eight-hour day?
There are many resources out there to support your leaders as you move to remote working. There are also many resources out there to support your staff as parents. Curate and share the ones that work best for your organisation.
Remuneration – In developing your remuneration and incentives strategy did your organisation ensure it was aligned to both your culture (the how) and to organisational performance (the what).
In my previous article I mentioned an organisation that was reducing the remuneration for both their Executive and their staff. Where reductions in remuneration are being considered, how are you involving your staff and are your decisions aligned with your Values. Would you expect all staff to have their remunerations reduced by similar amounts? Is that a % or a dollar figure? Are you considering the signals being sent to your staff, your shareholders and your stakeholders?
Performance Management – Again do your performance expectations include both results (the what) and culture (the how)?
If you have a value around say Customers First, how easy is it going to be for your staff to deliver on that Value when they are juggling parenting, deadlines and technology that lags.
What impact will COVID-19 have on those expectations, are they still realistic, what needs to be amended? What priority do you place on this? What impact will these have on your staff and their stress levels? What are you communicating to your staff?
Often performance expectations link directly to their remuneration and possible bonuses. (Remember the recent Australian Royal Commission into Financial Services drew a direct link between behaviour and remuneration.)
Recruitment – many, if not most, organisations have put a freeze on recruitment during this time. From an economic perspective that makes sense, however what is the impact on your people as they try to maintain service delivery standards and performance with fewer staff? What impact will it have on your long-term customer relationships? What impact will it have on your long-term staff relationships? What other options have you considered? For example, should you allow a limited number of extra hires in the technology support area or can you swap existing people to temporarily cover this?
Redundancies and staff on contract – Are you needing to “let staff go”, whether permanent or contract? If so, how do you determine which staff stay and which staff go? How transparent is this process with your workforce? From a Board perspective, what information is being shared with them, have you considered the potential impact of process on your Social Performance (as defined under Environmental, Social and Governance Performance)?
Air NZ is an example of an organisation that has been particularly transparent about the challenges it is facing now, its predictions for the future, and why it is needing to release a significant number of staff.
Staff Engagement – Do you regularly gather data on staff engagement and is it appropriate to continue doing so at this time? There are two sides to this. This data will give you really good insights into how effectively your leaders are managing and keeping connected with their staff at this time, however the data may also be skewed given the stress everyone is under.
If we remember the impact of a disengaged workforce - 40% more errors; 17% lower productivity; 21% lower profitability; and 147% lower earnings per share.[i] So if we know staff engagement is key, are your systems and processes in place to enable this?
Health, Safety and Well-being – For those of you providing essential services, you will be more than aware of your responsibilities to your workers? But are you also thinking about mental health? The 2019 NZ Work Place Diversity Survey highlights the mental health of employees as the biggest wellbeing/wellness challenge for organisations today. What HSW risks have been identified for your organisation during this time, and how confident are you that everything has been done to mitigate the risks.
Code of Conduct – Does your Code of Conduct easily translate to a WFH environment? Does your management team and Board receive reports when someone breaches it? What mechanisms are in place to facilitate the reporting of ethical issues and do they need to be updated to reflect this new COVID and WFH environment? What are the consequences of breaches? Remember the FMA and RBNZ Banking Review stated that “Boards need to take ownership and accountability for improving conduct and culture”. This is even more challenging in a remote working environment.
In summary, a lack of alignment between our values and our systems stands out like a sore thumb and breeds staff cynicism and discontent ...... the last thing your organisation needs right now. So check to make sure your systems are aligned with your Values, where they aren’t call it out, be transparent. Recognise there may be trade-offs along with way, explore those when they arise, have robust debates on the best approach, and make a note of your rationale so you can explore this more fully when this crisis is over. It may also be an indicator that you need to review your Values or that perhaps you need an overall driving value[ii].
[i] Source: Gallup State of the Global Workforce Report 2017
[ii] [ii] A driving value is the value that has precedence when values conflict.