RN #008 Culture-Performance Connect- What Boards and CEOs need to know

CEOs and their Boards have a broader understanding of how culture leads to better performance. The question is do they have an in-depth hold of their own culture and how does that impact performance? Or do they know the impact of same if they poorly manage culture?

When it comes to culture’s connection to performance the difficulties CEOs and Boards face include:

  • How to respond to a changing market
  • How to manage and onboard customers with new offers and processes because of the changing market
  • How to manage a changing workforce
  • How to mobilize the changing workforce and get organizational alignment support to the CEOs (or new CEO) for these changes to be effected(these could be transformational or incremental change)
  • Thinking and preparing for the future whiles paying attention to current BAUs and operational needs to pay the bills and generate revenue

These are some of the reasons why CEOs and Boards need to see the direct linkage between culture and performance.

Some ways to do so:

See culture as the base of the business

The fast pace and complexity of change organizations face require refining and fine-tuning their current strategies, structures, and processes to achieve KPIs. We must undo that culture to be ready for dynamics in the market. Or less you will lose your sustainable edge. Find ways to repurpose your current culture and integrate these desired culture levers in your BAUs

Define the culture you want

Do not assume that everyone in your organization shares the same culture, behaviours, and values you hold as a leader. I am always amazed when clients find out that the individual values they hold differ from the current corporate culture and are much more surprised when the current culture is way off the desired future culture they want. Sit with your leadership team and the entire workforce to assess your values, and behaviors against what you want to see and chart a way forward. These discussions should be situated within the context of the market competition, stakeholders’ needs, regulation, social, health, and environmental needs

Leaders should set the stone

Your leadership team drives culture. What examples are you setting? How are your processes of recruitment, engagement, promotion, mentoring, coaching, performance management, the kind of questions you ask, and the responses you give shape culture? How does that culture support strategy execution? There are leaders who are only results-driven no matter what it takes. You need to recalibrate because that behaviour will drive your employees out. Ask yourself about the kind of leaders you are bringing into the organization. Are they conscious of the large environment? What is their cultural change orientation and preparedness?

Board oversight on culture to reduce risk

A toxic and misaligned culture can undo performance. I have seen that more than twice in my working life with global organizations. If you use coerced and unhealthy culture to achieve results the days of your strategic outcomes no more how insightful are numbered. Boards should work with CEOs to understand and build the cultural fluency (what I call cultural capital) of the organization. Check and raise any potential cultural risks and address them. Our work at Nimdier shows the positive impact of culture on performance. We assist Boards, CEOs, Top Teams, and the workforce to achieve the desired culture to drive strategy execution

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