13.12.2016

From our CEO: Don't talk about culture in the boardroom

One of the most common questions I get from our clients at Culture Amp is how to talk to the board about culture. The main takeaway is this: don’t talk about culture in the boardroom; talk about the impacts of culture.

If you don’t understand the strategy, you can’t have a conversation about the culture

I’m simplifying a little bit, but a key mistake I’ve seen a number of HR people make is going to a board meeting and talking in their own lingo about why the board should be taking notice. The conversation is centered on the results of an engagement survey and why the board should support the next set of HR initiatives.

Wrong, wrong, wrong.

Any conversation about culture with the board needs to be a conversation about strategy.  It needs to be a conversation about how to be successful in the long-term. It needs to be expressed in terms of what is important to the board.

Peter Drucker, who is considered the founder of modern management in many circles, said: “culture eats strategy for breakfast.” The board needs to be made aware that no matter how sound a strategy is, a powerful culture can counteract it. Any attempts to invoke a new strategy will be futile if that strategy is not aligned with the culture of the organization. What looks like a strategy failure may actually be a culture failure.

It’s important to steer away from the HR lingo and buzzwords around skeptical board members. Talk in concrete outcomes, rather than vague ideas. Tell them what the data says will happen if they choose to do nothing (the null hypothesis).

Approach the culture conversation through relatable avenues, which may be risk mitigation, a desire for innovation and creativity, or long-term sustainability.

You need to be able to talk about the business existing and continuing to do so: that’s the heart of what culture is about.

Fundamentally, if you don’t understand the strategy of the company, you cannot have a conversation about the culture of the company.

The easiest way to get the board to talk about culture is to start a conversation about risk

One of the easiest ways to start a culture conversation with the board is to talk about risk. In most conversations about culture, there’s a link to risk, which is an easy way to open the conversation.

Boards are ultimately are the final arbiter of the amount of risk that a company is willing to take. Increasingly there’s all sorts of risk questions that become cultural questions. Questions like: “How tolerant do we want to be of people being able to make a mistake?” or  “How much latitude are we able to give people to allow them to be innovative?”

These are really valuable board conversations because they engage the board at the heart of their job - to create the structure in which the company can succeed.

Often the initial reaction when you link risk and culture together, is that people react with “Compliance, lock everything down.”

But increasingly what we're seeing is that executives are saying “You’ll lock everything down and you’ll win no markets, move no product and make no money.”

This is a great conversation because it leads to the realization that every company is taking risk all of the time. The real question is what risk is appropriate?  

I’ve seen that myself in boards that I’ve sat on, where people have sat down and said: “Okay, we've got 130 compliance policies. That’s too many, nobody can follow 130 policies, so we need to condense that back down into 20 or 30 key ones that help people understand what’s really expected of them."

That’s a really good example of a risk/culture conversation that’s directly connected to the long-term success of the company.

And ultimately, a conversation that’s about the long-term success of the company is a conversation that the board will always be interested in.

 

How to talk culture to your board

DO:

  • Know your audience
  • Talk about risk
  • Deeply understand the company’s current strategy
  • Couch your culture conversation in the context of achieving the board’s strategy
  • Connect what you’re talking about with the success of the business
  • Pitch it to the board in a language that is relatable and understood
  • Use a null hypothesis (what is likely to happen if you take no action)

DON’T:

  • Have an engagement survey conversation – it is a business strategy conversation
  • Use HR lingo
  • Talk only in terms of effects on employees instead of effects on the business
  • Use fluffy language or talk about vague terms like “integrity” or “respect”
  • Just shove data at people: tell a story with it

Didier Elzinga is a People Geek and CEO/Co-Founder of Culture Amp. You can follow Didier on MediumTwitter or LinkedIn.

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