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The crisis legacy in organisational culture

[fa icon="calendar"] 10-Apr-2018 07:20:00 / by Walking the Talk

This article appears in and is reproduced with the permission of Brazil's leading financial newspaper Valor Econōmico, from the original Portuguese version

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For Carolyn Taylor, crises can be opportunities, whether they are driven by internal or external factors.

During an economic crisis, Brazilian companies have become accustomed to a new set of norms - to do more with less, to respond to constant pressure for results, and to work within much leaner teams. For consultant Carolyn Taylor, a specialist in organisational culture, even with the recovery of the economy, the effects of the recession will be felt for much longer and it is up to managers to determine if the crisis will leave a legacy or a curse for companies.

Corporate culture is, in the view of Carolyn, a term that defines the daily behaviours and ways of doing things within a company. "You build your culture by the way you work every day. Your response to a crisis is an example of that culture," says the consultant, author of the book "Walking the Talk", written in 2005 and released in Brazil in 2014 by Publit. The title also gives its name to her consultancy firm, founded 25 years ago and present in Brazil for more than a decade. Carolyn talked with Valor last week, when she was visiting the country.

For her, times of crisis, be they extended and driven by external factors such as an economic recession or generated by internal aspects, such as corruption scandals or environmental accidents, should be taken as moments of opportunity. The key to doing this is to assume responsibility and point a mirror at the organisation, identifying the attitudes that led to the crisis or that were taken in response to it. "Some cultures will blame the external environment and others will wonder how they can become smarter and learn from what has happened," she says.

Examples such as the companies reported for corruption under Operation Car Wash or the Wells Fargo Bank, where it came to light that thousands of employees had opened accounts in the names of customers without authorization, show that the company can hardly deny responsibility and put irregularities down to some "rotten apples". "I can't think of any case in which I found one or two individuals who have committed fraud, but rather, there was a larger culture contributing to it," she says.

In her experience, it is almost always possible to identify where there are vulnerabilities that can lead to irregularities and fraud during the analysis of the culture of a company. "It may be because of a culture of lack of control, or exacerbated pressure on obtaining results without questioning how they will be achieved", she says. Especially in times of crisis, when this pressure comes from all sides, she argues that companies always search for openings that would allow employees to find "shortcuts" to improve performance.

"It is irresponsible to put pressure on an organisation without asking these questions, and it is at this point that senior executives contribute to a culture that causes problems," she says. The voices demanding better performance and those reinforcing values and ethics must be heard at the same volume, says Carolyn. "In most organisations, the voice of ethics and values is not loud enough," she says.

In the absence of an attentive leadership, crises tend to elevate fear among employees, which brings out the worst in people. "There are two ways to lead during a crisis, one is with a vision and the other is with fear," she says. Having a vision requires being very specific and transparent about the needs of the company and the role of employees within its strategy - as well, of course, as taking decisions on cuts and layoffs with "dignity". "To demand more from people, you must be capable of transmitting a greater sense of purpose, and be very careful to ensure that the requirements occur only in the short term, because people will not stay on if they feel that they are being abused," she says.

According to her experience, about half of the companies are capable of doing this self-assessment and come out of crises stronger than before. In Brazil, Carolyn has noticed that it is easier for people to accept changes and to be less attached to the past, in comparison with Europe, but she also sees a great limitation in the difficulty of Brazilians in having tough conversations and speaking openly about their problems - something essential for corporate culture to evolve.

Another aspect that she points out as an advantage in the Brazilian economy is the prevalence of family businesses which, in her opinion, are more committed to the long term. "Corporate culture is a medium-term undertaking, you will not see a result in a few months," she says. For the consultant, you must wait two or three years to really see the impact that a crisis can have on the organizational culture of a company.

Carolyn is optimistic, however, she sees a growing awareness in the corporate world that it is possible and necessary to analyse and refine the cultures of companies. In her view, this is a consequence of many crises that nearly destroyed companies, of the arrival of a new generation of executives and executives in power, more comfortable with the management of matters previously considered as pretty "minor", and the need felt by businesses to become more agile and adaptable to a world that is fast-paced and uncertain.

Agility is today the most sought-after skill by executives who seek to make diagnoses and changes in the culture of their companies. Giving more power and autonomy to employees comes next, as a requirement to allow more agility in organisations. "This is a big change in terms of trusting, delegating and learning how to solve problems horizontally, without always having to consult the managers, which takes more time," she says. To complement these aspects, she highlights two other important aspects in the culture: curiosity to learn constantly and the humility to know that the answers are not always there.

To read the original Portuguese version of this article click here

 

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Topics: Change, Culture change, Reputational risk, Corporate culture

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