Workplace Culture: It’s not what you do, it’s how you do it.
Workplace culture is now at the top of the priority list for most business leaders. And whether it’s the increasing regulatory focus on non-financial misconduct, the constant stream of alarming cases of misogyny and sexual harassment making headlines, or first-hand experience of a toxic work culture that keeps you up at night, it’s clear that culture is no longer the mainstay of HR alone. Make no mistake, this is a leadership issue.
But for a topic that’s on the workplace agenda, here’s the tricky thing about culture: it can seem abstract, unmeasurable, intangible. Culture is influenced by a host of variables, including attitudes, biases, behaviors, and everyday interactions within teams. And workplace culture can be governed as much by unspoken and unwritten rules as by formal policies and company values. The combination of these challenges means that not only is workplace culture difficult to measure, it’s also not a static state.
The late Edgar Schein described culture as: “Continuously created and created by our interactions with others, shaped by the behavior of leaders, and a set of structures, routines, rules, and norms that guide and constrain behavior.”
There are many definitions of culture, but in simple terms, workplace culture is really about how things are done here. We’re talking about the behaviors, mindsets, attitudes, and everyday habits that determine how we make decisions, how we serve our customers, how we communicate, how we collaborate, how we treat those around us… the list goes on.
If you’ve ever worked in an organization or team with a toxic culture, it won’t come as a surprise to hear that weak cultures damage trust and can stifle innovation and creativity. We know that when employees feel like they have a voice and their contributions are welcomed and valued, they’re more likely to come up with new ideas and fresh perspectives, helping us make better decisions.
But for regulators, the focus on workplace culture is primarily on reducing risk. The FCA has cited culture as a “leading cause of behavioural failure”. They acknowledge that it is not just the tone from the top, or even the tone from the top, that matters in fostering a healthy culture. Employers also need to focus on the “tone from within”, as workplace culture is influenced by each and every one of us.
If workplace culture has risen to the top of your to-do list, you’re not alone. We present three of the most important strategies and tips for leaders and HR professionals who want to take action.
Be careful of the gap (self-awareness).
PWC’s Global Culture Survey found that employees feel less positive about culture than their employers, and that sometimes leadership behaviors contribute to the mismatch. In response to the statement that “our leadership team speaks to purpose, values, and culture,” PWC found that 73 percent of boardroom and C-Suite participants responded positively, compared to just 46 percent of those in management.
We all know that when it comes to workplace culture, the conversation is about walking the talk. In today’s workplace, the behavior of leaders and managers is scrutinized more than ever, and employees are often quick to identify leaders whose behavior disappoints. We’ve also found that employees increasingly express frustration when leaders fail to speak up or challenge the poor behavior of their peers.
In today’s workplace, leaders must not only adhere to workplace values, they must also reinforce them. But is that easier said than done? Two challenges we regularly face through behavioral coaching and workplace culture assessments are:
- Rejective behavior is often unintentional;
- Some senior figures may not be aware of issues because they learned to “set” certain behaviors early in their careers.
Let’s consider point one. Everyday rejection—whether it’s words, actions, gestures, or facial expressions—can sometimes be unintentional. After presenting a pervasive behavior at a professional services firm, a partner, we’ll call him Nick, contacted me. “It petrifies me,” Nick shared. “My kids are always calling me out around the kitchen table: ‘Dad, you can’t say that,’” he continued. What scared Nick was that no one at work spoke up for him. He expressed concern about the possibility of unintentionally using words or phrases that some colleagues might feel were dismissive or insensitive. He knew full well that while his children would feel comfortable admitting he was wrong, his colleagues might not feel safe doing so. As we’ll explore later in this article, Nick’s colleagues are not alone. Often employees can be deeply anxious about telling a senior figure that their words or actions have caused harm.
On point two, through our cultural work, older women often think that they were conditioned to “tune in” to misogynistic (fascist) views early in their careers. A number of older women we met described this as a coping mechanism. For some, this early conditioning has led to situations in more recent times where they simply didn’t notice the sexist comments of their male peers. As a knock-on effect, this can cause frustration and disappointment among junior team members, who become frustrated by both the sexist comments and the inaction.
For leaders and managers, the reality is that bridging the awareness gap is deeply important in playing your part in fostering a healthy culture. But we don’t know what we don’t know, so where do we start?
Start by listening .
Understanding how your behaviors, attitudes, mindsets, and habits affect those around you requires a commitment to listening to (and learning from) those outside your natural line of sight. This might mean walking the floors and having a conversation, or it might mean building deeper connections with colleagues over time.
Look for people with different perspectives.
In the workplace, it’s common to attract people who share similar work styles, approaches, or perspectives. But this comes with the risk of getting stuck in an echo chamber. If this resonates with you, it might be time to replace your support network with a challenge network.
Be prepared to act on what you hear.
If employees raise concerns, or if feedback highlights personal shortcomings, be prepared to take action.
Prioritize psychological safety.
When it comes to workplace culture and behavior, one of the most common frustrations we encounter concerns abusive rainmakers: senior figures who dominate and carry an aura of impunity, all thanks to the financial value they bring to an organization. Today, perhaps more than ever, it’s clear that rainmaker status doesn’t provide an extra layer of protection for perpetrators (or certainly shouldn’t). But speaking truth to power is rarely easy.
Financial regulators have championed the concept of psychological safety, where employees feel safe to speak up without fear, embarrassment or retaliation, and where organizations and leaders are ready to listen. And the importance of psychological safety extends to the everyday work environment of any group or team. In an environment that lacks psychological safety, employees may feel afraid to admit mistakes, ask for help, share ideas or offer an alternative perspective. Employees may also find it difficult to challenge exclusionary behavior, especially if the perpetrator is senior or influential, and especially if it is a rainmaker.
As a first step, albeit a basic one, it is important for organisations to review their formal reporting channels. Do employees trust these channels? Are they aware of how to report concerns or make complaints? And how do employees raise concerns about microaggressions and everyday exclusions? In the post-Covid era, the workplace is evolving rapidly. It is important to take stock and ensure that reporting mechanisms are still in place.
Secondly, consider how to assess the level of psychological safety in the workplace. One approach developed by Amy Edmonson, a pioneer in workplace psychological safety, involves a short questionnaire to help leaders assess perceptions of psychological safety within their team. The FCA’s consultation paper on diversity and inclusion in the financial sector, published in September 2023, includes a proposal that firms report on a selection of inclusion measures. These measures include whether employees feel:
- They can speak up if they see inappropriate or wrong behavior.
- Safe to express disagreement or challenge the prevailing opinion or decision without fear of negative consequences.
- Safe from honest mistakes.
Third, it’s important to understand and address any barriers to speaking up in your organization. In a LinkedIn cross-section survey earlier this year, two-thirds of respondents cited fear of negative job repercussions as the top issue preventing employees from speaking up in the workplace.
The actions and paths forward will look different depending on the organization, but it’s crucial to critically evaluate your starting point before taking action. And while there’s a lot of talk about talking, we shouldn’t ignore the importance of listening. Along with empowering employees to speak up and creating a space for employees to share their perspectives, employers need to equip leaders and managers with the skills to listen, respond, and act with empathy.
Critically examine your cultural foundations.
Ultimately, workplace culture is of course underpinned by policies, practices, training and communication. Reporting mechanisms and more While almost every organisation has these foundations in place, that doesn’t mean these regulations are effective, or that they have stood the test of time. Taking the time to critically review and regularly refresh your policies and reports may not seem like an impactful cultural intervention, but they are crucial. As is assessing people’s processes to ensure they are fair, equitable and consistently followed.
When it comes to workplace training on culture and behavior, there are strong views on the mandatory versus voluntary conundrum. Mandatory training can run the risk of creating resistance and resentment. But, as we all know, those who need the training most are unlikely to participate voluntarily.
Training is a vital part of the foundation of any organisation and when it comes to whether training on workplace culture and behaviour should be mandatory or voluntary, our view is that workplace culture training is relevant for everyone. And any requirement to attend training should reflect this. How to deal with naysayers? We recommend choosing your training provider carefully, delivering in-person training (rather than e-learning) and ensuring that the training is based on discussions and scenarios that feel relevant and relevant to your organisation.
Bridging the cultural awareness gap, promoting psychological safety, and assessing the effectiveness of your foundations help organizations and leadership teams identify and address issues more quickly, and (even better!) these steps may help prevent problems from occurring in the first place.
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