Christy Mori & Dr. Josephine Palermo continues the conversation from “bad” culture into “good” culture and how a “good” culture is vital for businesses. We focus on how much employee engagement will not just be better for the individuals working but the business itself. Dr. Palermo gives tips for leaders for creating and sustaining a “good culture” in business.
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Welcome to Gears, Action, Growth, shifting business culture one conversation at a time. My name is Christy Mori and I’m joining Dr. Josephine Palermo whose super power is to create business cultures that transform organizations team by team. Today, we’ll be chatting about good business culture. Hope you get value from it!
Hey, Jo. Good to hear from you. I was going to say, “Good to see you,” but good to hear from you. Our audio has been really great lately. How’s it going?
Dr. Josephine (00:49):
I’m really good, Christy. I’m feeling very buoyant with Melbourne starting to open up. I was driving in Fitzroy down Gertrude street yesterday and there were people outside having lunch and it just felt so awesome to see people out and about and the shops reopening and there’s a sense of hope in the air. So it actually was a really good day yesterday.
Yeah, definitely. I know that our local parks and things, so many families are out on the grass. It’s like Disneyland almost.
Dr. Josephine (01:24):
It is, isn’t it? Absolutely. It’s awesome.
Yeah. It’s so foreign though, isn’t it? Like, from the nothing to everybody going out.
Dr. Josephine (01:30):
It is. It is. And I think it should be really mentioned that not everybody is going to feel great about that because there’s this kind of, some people will feel intrepidation because we’ve been sort of on our own at home for so long. So yeah, we have to be kind to each other, because not everybody’s going to feel comfortable about being out and about.
That’s very, very true. So listeners in Melbourne, we’re with you. And today on that positive note, we’ll be talking about good business culture to give you further insight of the flip side from bad business culture. And we’ll be specifically talking about what makes a business culture good and why a good culture is vital. And lastly, if a business does have bad culture, how can you flip it to a good culture, especially as a leader? So let’s go with what makes a business culture “good” and are there some key attributes that we can identify?
What makes a business culture good?
Dr. Josephine (02:34):
Okay, thanks Christy. I loved to start here because I think that last week, we talked about bad culture and I’m going to say the same thing that I said about bad culture when we’re talking about good culture. Cultures are not necessarily good and bad, but they are better if they are geared towards fitting the purpose of the organization or company. So if your company has certain business goals, your culture really needs to be aligned to that. It also needs to aligned to your values and that’s what makes it good or even great. And then on top of that, because really when we think about it, companies are people. We think of companies as kind of institutions or financial structures, but really, what makes things happen are people. And when people are in good cultures or even great cultures, they’re going to perform better because their engagement will be higher. So a good culture is a culture where you feel like you can flourish in that culture where people are really living the values of the company where there’s values alignment, where there is some key characteristics that relate to the way in which people interact with each other with respect, the way people are recognized for the work that they do, and where people are very clear about purpose. So let’s start with that. So let’s think about a good culture being a culture that is very clear about its purpose. The culture in imbues that. It demonstrates that. I talked to business leaders about signature moments and what I mean by signature moments is what are those kind of symbols, all those moments in the company’s day, or week, or month where everybody can feel the culture of the organization and they instantly understand that it’s aligned to the company’s values, and it’s aligned to the company’s purpose. So these are signature moments that can really make a difference to people, because what it does is it keeps turning people towards focusing on the key purpose or the key goals of the organization. I’ll give you an example. If you’ve got an organization, let’s take Boost, for example. Boost is an organization that’s done really well. They’ve actually really thrived on a culture that is aligned to their values and their values are around producing something that’s fun and healthy because Boost was the sort of first up company that kind of brought smoothies and shakes to a more vibrant kind of mass market, if you like. So it’s about being healthy and it’s about really caring for the individuals. So a company like Boost, if you’ve got workers at Boost experiencing a culture where they’re not recognized for their strengths, where they’re put in situations that are really not great for their health and wellbeing, where maybe occupational health and safety are not a focus of individuals, where they’re not trained to perform well, all of those aspects around the way in which people interact with each other and their ability to do a good job are going to feel misaligned to Boost’s purpose. And I’m not suggesting that Boost has a culture like that. I think Boost has a great culture and employee satisfaction at Boost. Although I haven’t looked at the latest statistics, but you know, even from a customer perspective, you get a sense that people who work at Boost enjoy their day. And I don’t know if that’s been your experience, Christy. Are you a Boost customer?
Is that the juice bar you’re talking about?
Dr. Josephine (06:41):
Yeah, the juice bar. Yeah.
So I’m originally from Canada and I think we do have Boost. Like, it’s an international company, isn’t it?
Dr. Josephine (06:48):
Yeah, it is. It is.
Yeah. I think it’s more popular here because that’s like the stands where they make the shakes and things like that.
Dr. Josephine (06:58):
Exactly. The founder is Australian. So where that company, sort of I guess, takes its culture is you could feel it from a customer perspective. So when I get served by someone at Boost, I get a sense that the team are working behind the counter well, that they smile at each other, that there’s good communication between each of the workers. And so what I would expect is that also, all of those other things I talked about are aligned. You can’t sell a product that is about health and well-being, and then have people in your organization not demonstrating that, not feeling like they themselves are looked after that way. And the signature experiences that I’d expect there would be what leaders and managers do in that organization and how people are treated. So it could be that for example that employees could have benefits that relate to their health and well-being more so than in say another organization, because that’s the purpose of that organization, is to really drive health and well-being. So there’s a sort of alignment there and the alignment is around what the interactions that people have with each other, and also where decisions are made. So how much control is given to people who are closer to doing the work? So for example, if I was a manager in an organization like that, I would expect that my staff are well-trained. I give them support to make decisions they need to make in order to deliver some value to the customer. In organizations where staff are not given enough autonomy over the decisions that they can make, what you have is very slow improvement in that organization, or you might have staff who feel like they can’t make a decision, they have to get approvals two or three, rungs up that’s very classic, traditional, hierarchical way of working in those organizations, your culture will suffer because people don’t feel empowered to make decisions. Or they don’t feel empowered to improve because also for companies to have great sustainability, to keep innovating, to keep creating more and more value for customers as customer demand changes, and customer preferences changes, you need your staff to be able to make improvements because it’s your staff who are going to be interacting with the customer. So if you don’t empower your staff to voice their ideas, for example, in a more open culture where ideas can flourish even, where any idea can flourish, and be tested, then your staff aren’t going to necessarily make that. They might see that something could be improved, but they’re not going to tell management because they’re going to believe it just falls on deaf ears. So a good culture is what is a culture to where, as much as possible, the decision-making for how work gets done is at the lowest part, as much as possible, of the organization.
The vital role of having good culture
Okay. So this sort of leads into asking, why is it that the culture would be vital to an organization? And you’ve touched a lot about how people can be empowered, and in the henceforth, the business can grow better when people feel empowered, and they have a certain sense that they matter.
Dr. Josephine (10:51):
Yes. So that’s important, but the reason why culture or business culture is vital is also related to employee engagement. So if your employees are not engaged, in other words, they might be coming to work, they might be on time, but their brain is elsewhere. They’re not focused on what they’re doing. They’re not focused on achieving your business goals. They might be performing maybe just enough to get by, but employees that are engaged are those employees that will always go above and beyond. They’ll be thinking about improving and innovating. They’ll be also thinking about doing the best job they possibly can to help customers. They’ll be one step ahead, they’ll be proactive, and they’re the kind of employees you want. And in fact, I was looking at some recent statistics on employee engagement and Gallup poll did a recent global survey. They surveyed 142 countries and Australia is always included in these surveys, and they showed that globally, 63% of employees are not engaged at work. And 24% are actively disengaged. And when you have disengaged employees, they’re sabotaging your company. They’re either not doing their job well, or they’re actively sabotaging that they might be doing something that, for example, they might be interacting with your customers in a way that would shock you. They might be doing all sorts of things to actively sabotage your bottom line. So like that Gallup poll found, like if you look at it from a kind of a numbers perspective, that’s actually more than 900 million people in the world. And across those 142 countries who are not engaged in the work that they’re doing. 900 million people. Over 900 million people.
Even though that’s a shocking number, I definitely can understand. It’s a huge number, but I can also understand that it is the reality. You know, it’s not so foreign, I think, as a concept around the world, Australia, it doesn’t matter really what kind of country. I think if people are not feeling like they’re appreciated or empowered, that can definitely happen.
Dr. Josephine (13:25):
Exactly. And really, business leaders need to tune in on this because if you have an engaged workforce and the statistics are really clear on that. If you have a workforce that’s highly engaged, it means you can expect 19% increase in your operating income. Versus a low level of engagement, which will give you a 33% decrease in your operating income. So it absolutely affects your bottom line. There’s no fluffiness about this. So good culture means people are engaged, means you have an increase in your operating income, and you are avoiding that 33% decrease. That’s it, that’s a really scary number as a business owner.
Turning bad culture to good culture
So for business owners who are hearing this right now, and they’re realizing they don’t actually have a good culture, how can they turn it around? Do you have some recommendations and advice that you could give to take the culture to the next level?
Dr. Josephine (14:35):
Yeah. Yeah, there are things you can do. And firstly, the first thing is, be focused on it. So think about what kind of culture you want to create. This doesn’t happen by osmosis. Sometimes it does, but often it happens because leaders are very deliberate about creating a good culture, and they think about it, and then they put some plans in place. You can’t just rely on, as a leader, your individual charisma to create a good culture, because a good culture has to be sustained in your policies and processes. And it really has to be something that keeps being demonstrated by the people in your company, regardless of whether you’re around or not. So firstly, recognize that culture is important and then think about what do you want to do? What kind of culture do you want to create? And there are characteristics of culture that we can think about. There are dimensions of culture. So as I was talking about before, one dimension is the level of control in an organization. You know, what kind of culture do you want to create around empowering your staff versus, tightly controlling what goes on in that organization? So that’s one aspect, one dimension. Another dimension is how do you want people to treat each other in the organization? What do you want the interactions to be like? And there are some values that you can think about that you want to really make sure that your culture is demonstrating on the way that you’re doing the work on the way things are done. So you make that clear first. You make that super, super clear. I’ll give you an example. So I’ve run Higher Spaces co-working with my business partners, Shu Tan, and we did an exercise on what kind of culture we want to create because we wanted that culture to be our differentiator. We wanted it to be an asset to our business. We recognized that. And we don’t have a lot of staff, but we have a lot of people who are our members. We have clients and customers, and we have suppliers. All of those people are important when considering your culture, because they will all feel the ramifications of your culture. So what we did, is we looked at our purpose as an organization. We looked at the kinds of values that we have, and what we really pretty much determined, is that one of the key values that we wanted to share, and really permeate through our culture, was a culture of nurturing and caring. And we wanted people to feel like when they come into our premise, when they’re working with us, that they feel that from us, and they feel it in the way that we interact with them online, they feel that in the way that we respond to their enquiries, they feel that in the way that we set up our spaces, they feel that in the way in which we empower them to make decisions that have implications on us. So we wanted to create that culture. And so that’s the first thing we did, we thought. And now every time we make a decision, we go back to that. We go, are we demonstrating that culture of nurturing and caring by changing this particular issue or by changing this particular policy? You know, how do we demonstrate that more? And very clear example of that is when COVID, you know, the pandemic hit. We wanted to make sure that we were providing our members with that care because we know that people are doing it tough, that they were going to experience some anxiety around changes coming ahead. So we wanted, as much as possible, to be there to support them. And so our policies around how we transitioned from being open to shut and then being open again, all of that, all of those policies, we’ve got this lens on. It’s like, how do we do that while still providing this culture of nurturing care? So that’s one thing. Another thing is that you can actually measure your culture. A lot of companies measure their engagement. So you can measure staff engagement, but measuring staff engagement is a symptom of culture. You can actually measure culture and there are some really good tools out there that help you measure culture. And so you can ask people about how they feel about working in that company, and how they feel about these dimensions that I’m talking about, that you can also ask them, what do they see demonstrated that gives them a sense of that culture? And then the other thing, in terms of particularly flipping a culture is back to the signature moments that I’m talking about. Now these are gestures that you can do as a company or as a leader that show the essence of your culture. Or the culture you want to develop. So if you’re not quite there, you can create a signature moment to show people, “You know what? This is where we want to go.” I did this, I’ll give you an example, I did this when I was working for a major telecommunications company. And what we did, was we wanted to create a culture of greater innovation in the organization. We sort of felt like people had kind of got a bit complacent, that our leaders weren’t sort of thinking into the future enough, they weren’t being innovative enough. So as part of that, what we did is we created an experience. We took them out of their day job for a day. We had an event called a “hackathon.” And what a hackathon is, is where you often take companies, do hackathons. And what they do is they bring people together to solve problems. People have total autonomy about the problem that they solve, how they’re going to solve it. And you set up healthy competition between groups and people have to work in groups, and there’s no hierarchy. So we set up a day where they were working on hackathons. And out of that, a lot of the comments I got back from people who had attended that day was, “Wow, I want to work like that every day. I’m so glad we’re moving in that direction.” Because what we did is we gave them a sense of what that future culture could be like. And then they brought that back to their workplaces. Another example of that, a few years ago, the ANZ Bank introduced in their I.T. spaces, a hackathon, as well, where they wanted their people to be working on customer problems or customer improvements. So they gave their people Fridays to work on that. So as an employee of ANZ, I could pick a topic that I wanted to work on. I could form my own team, and it might not be within even my department. It could be other departments so I could form the kind of team I need, and that team would then work together for a day to solve that problem. And you know, the leadership enabled that, because again, they wanted to really inspire a culture of innovation where people feel empowered to fix some of these issues that they know customers have, rather than being dejected. Because nobody wants to work in a company where you know there’s problems. You don’t have the power to fix them, management isn’t doing anything about it. Like, that to me is where you have total disengagement of your employees when you have a scenario like that. What you want is to create some kind of gesture, some kind of signature moment. Another thing that companies do is they allow their staff to do a volunteer day once a year or twice a year. And they encourage their staff to leave work, go and do a volunteer day, and come back and tell us stories about how that went. And that shows that the company cares about its community. It cares about things that are above and beyond justice. You know, bottom line. So there’s lots of things that you can do. It doesn’t have to be allowing staff to have time off. It can be allowing people to come together as a group in a different way to how they’d normally come together, to be part of something that is a little bit different to what their normal day-to-day is. It can be as simple as that. But it’s about getting people to participate in something that is different. It’s giving them a different experience, which is aligned to that culture you’re trying to create.
So any business owners that are wanting to flip their culture, I hope you got some good value from that. And any future business owners, if you want to use any of these ideas, that’d be great. Let us know.
Dr. Josephine (23:59):
And Christy, what I’ll do is, I’ll put a link in the description of this episode to kind of a little bit more information on creating signature experiences. So if people want to learn more, they can go to the link.
Outro (24:14): Yeah, that’s great. Thank you, Jo. And as always, thanks for listening everybody, and we are looking forward to connecting with you next time. And please send us your questions and what you might want to hear more of in this series at [email protected], which is also in the description. And thanks for listening. Hope you found value in this today. And take care and join us for the next chat. Bye, everyone, for now. Bye.