I wrote a blog at the beginning of the year and I want to re-post an updated version today having seen an article in Fast Company which made some valuable points.
When I wrote I was visioning the future. Since we launched our new products into the market, which train HR professionals how to lead, manage and support culture, I ave a vehicle to make it happen. We believe that culture is do-able, and want to offer these products to support organizations who intend to develop their culture and need build more internal capability to achieve this. This capability will enable HR to link their contribution more closely to the business.
The ’00s marked the rise of culture as a serious enabler of business performance. In the ’60s-’70s it was marketing and brand management, with the corresponding rise in the importance of the marketing professionals. The ’80s-’90s marked the emergence of technology as the key enabler, and the development of the CIO role. Now it is the turn of culture and the HR manager is turning from the old ‘personal manager’ role into a key strategic partner in the business with a seat at the top table.
There are some symbols of this trend:
- Every major consulting firm, including those who would previously have turned up their nose at HR, now have a ‘human capital’ business. McKinsey, PWC, Accenture, etc. etc. It has been their growth engine in recent years.
- CEOs and companies who emphasize people and culture are getting more media coverage. Jack Walsh at GE was one of the first, think now of Starbucks, SouthWest Airlines, Google, Zappos, etc. People want to work for and buy from companies that put people and culture first.
- Spend on leadership development is increasing rapidly. According to the ASTD, in the US alone, companies spent $109 billion in 2005, increasing to $134 billion in 2007. Of this latter figure, $29.5 billion was spent on external resources.
I see a number of factors that have combined to cause this rise in the importance of culture
- Culture has been identified as the cause of many corporate woes, from merger failures, to unethical practices bringing whole businesses down (Enron, etc), to the recent financial crisis. Leadership behavior is the key driver of corporate culture. Quote Alan Greenspan: "The prime factor in predicting whether a company will be honest or not is the character of its CEO. If the CEO countenances managing reported earnings, that attitude will drive the entire accounting regime of the firm. If he or she instead insists on an objective representation of a company’s business dealings, that standard will govern recordkeeping and due diligence.”
- Changes in demographics mean that top talent will become a scarcer resource. With the aging of the Baby Boomers there are fewer people available to fill leadership roles. A 2007 Bersin Associates study showed that 53% of organizations face leadership shortages, most of which are at the mid-management and director level. Talent expects a healthy culture.
- Gen X & Y have no problem leaving their company if they are not getting what they want. The age of employee loyalty and desire for security is gone.
- Rise of service industries means that the brand experience and customer satisfaction levels are much more closely linked to employees.
- Technology driven changes in work practices and decision making (e.g., global teams, quality of management information, complexity of decision making, speed of competitive change) place higher demands on leaders. The old ‘command & control’ style is just not going to work, and leaders need a higher order of emotional intelligence, self awareness, communication and relationship building skills. These skills are all learnable and can be embedded as expections in the culture.
- The rise of women in the workplace has moved the balance more towards the more collaborative and reflective elements of management
- Aggressive and well informed recruitment firms approach an organization’s best talent every day, and these people need to feel very engaged with their employer to resist the temptations they receive. Leaders who are receiving coaching increase their level of engagement by learning to more successfully address the challenges which frustrate them.
- Outside of work, there has been a massive rise in personal development activity (think of the self help book sector alone) and many leaders come to work already aware that there is a link between how they think, how they behave and the outcomes they produce. These people want development support, including coaching, to help them perform to a higher level.
I am excited! All of us – consultants, HR professsionals, business leaders – have a role to contribute to and gain from this trend, and perhaps a responsibility to build higher standards for the behavior in corporations. I look forward to exploring with you how we can pursue this goal.
Carolyn is the CEO of Walking the Talk and author of 'Walking the Talk: Building a Culture for Success' (Random House).
Twitter @walkingourtalk or LinkedIn.