How to Build a Creative & Inclusive Company Culture
This month I attended the HRD Summit in Birmingham where I listened and watched HR professionals talk about what they are doing to tackle the topic of Diversity and Inclusion (D&I). This article outlines a different perspective on D&I for startups looking to create an inclusive culture as the company scales, and for established organisations looking for new ways to drive productivity.
From listening to startup leaders talk about their growing pains, diversity is still an issue for them, although they might not call it a diversity issue. Startups often think they are ‘inclusive’ but often fail to see they’re hiring more of the same type of person. Employing more of the same ends up unintentionally building homogenous teams and companies that are more susceptible to making bad decisions or worse, fail to see a problem before it is too late.
However, from listening to HRDs from large, diverse organisations, the opposite is happening. Due to frequent M&A activity or from investing in building interest groups and practices to engage with underrepresented people and groups, the workforce is becoming diverse but not so inclusive.
A new perspective
The CIPD defines D&I as the following:
Diversity is about recognising difference, but not actively leveraging it to drive organisational success. It’s acknowledging the benefit of having a range of perspectives in decision-making and the workforce being representative of the organisation’s customers.
Inclusion is where difference is seen as a benefit, and where perspectives and differences are shared, leading to better decisions. An inclusive working environment is one in which everyone feels valued, that their contribution matters and they are able to perform to their full potential, no matter their background, identity or circumstances. An inclusive workplace enables a diverse range of people to work together effectively.
I view this topic more holistically. Rather than segmenting populations further by faith, sexuality, culture or race et al. (which creates the unintended consequence of more diversity, silo mentality and reactive behaviour), I like to think of difference, as the diversity of thought, ideas and creative competencies. From this foundation, on building a human-centred, tech-enabled culture of inclusion that is underpinned by a business performance driver that can be realised and measured as a result.
Benefits of realising D&I
A question I often get asked when talking to companies about the importance of building a D&I culture (apart for compliance reasons), is why? Therefore, I’ll start with ‘why’ and then detail ‘how’.
Understanding why and for what value we should do something in business should be (in my view) at the centre of everything. Here are five reasons why you should cultivate a D&I culture:
- Ideas & Innovation. Apart from the obvious benefits that come with hiring team that have a diverse mix of skill and capabilities needed to deliver value to customers and stakeholders, the power of innovation emerges from firstly appreciating, secondly utilising your team’s diverse thinking and creative potential and thirdly, executing their ideas using a framework like agile. How we view the world and where we believe our experience comes from tends to influence how we see a problem and the solution produce. At one level, you could say, the more diverse your team, the more experiences in the team, the more solutions you’ll have to choose. However, this isn’t the rule. Sometimes you’ll have a diverse group who are so in their heads they’re unable to access their talents and only download their problems. So it also makes good business sense to understand what gets in the way of solution generation.
- Engagement & Productivity. To remain competitive in the marketplace, organisations know they need their employees to be at their best and make a valuable contribution. There is a lot of evidence that suggests employees who feel their input is valued are more engaged and intrinsically motivated than their peers. Intrinsic motivation leads to more discretionary effort and higher levels of productivity. This links into one of our basic psychological needs for autonomy and relatedness as discovered by David Rock, co-founder of the NeuroLeadership Institute and author Daniel H. Pink. When an employee feels like they have some control in the input and is listened to and valued by peers and seniors, it activates the reward centre in the brain which fires them into taking action. And if the activity is aligned to company outcomes, then this means better business results for you!
“87% of employees worldwide are not engaged at work… Companies with highly engaged workforces outperform their peers by 147% in earnings per share.” Gallop 2018
- Employee Brand & New Talent. Startups and organisations recognise the need to attract and then retain new skills and talent they need to remain competitive. Creating a culture founded on human-centred inclusion allows people to shed the identity labels placed on them and believe they belong to a company that cares about them as a human being rather than because of their protected characteristics. Having a strong Employee Brand Proposition (EVP) will save money in recruitment and lost money in attrition. A strong EVP attracts recruits with different needs and beliefs from different backgrounds and skills also sends a message to current employees that you value them and promote equality for all.
- Leadership Effectiveness & Business Performance. According to Schouten & Nelissen University in Holland and The Leadership Circle and analysis of their database of hundreds of leaders worldwide, leaders scoring with higher creative competencies tend to be overall more effective as a leader both in the domains of building strong relationships and executing on tasks. The inner circle dimension ‘Relating’ made up of caring connection, team play, collaboration, mentoring and interpersonal intelligence all score highly on correlating to leadership effectiveness. By working with leaders on developing their inner game and their relationships with others while focusing on the Achieving dimension predicts a leader’s overall leadership utilisation and effectiveness. Leadership effectiveness as you would also assume positively correlates to business performance indicators such as sales and revenue growth, market share, profitability, quality of products and services, new product development and overall performance.
- Mental Health & Well-being. If the above didn’t make you stop and think, this might. According to the 2017 Stevenson-Farmer Independent Review, ‘Thriving at Work’ into Mental Health in the workplace commissioned by Teresa May, the financial costs of poor mental health and well-being are staggering. Aside from the debilitating or fatal personal losses, the economic costs are costing UK companies of all sizes a small fortune. In 2017 Deloitte was commissioned to perform some analysis and it uncovered the expense of poor mental health in the workplace to be at £33bn-£42bn per year! Over half of this, £17bn-26bn is as a result of presenteeism (people who are at work but not working at their best due to ill mental health). They also state return on investment of workplace mental health interventions is overwhelmingly positive, with an average ROI of 4:1 (Deloitte 2017). Inclusive cultures tend to boost personal wellbeing. Being part of a healthy and inclusive group culture where people understand their own human experience, contributions are valued, differences are welcomed and well-being is prioritised helps to boost physical and mental wellbeing and therefore engagement and productivity. A no-brainer…
The issue with the current view of D&I
This issue that exists with the current viewpoint of D&I interventions is that they are seen as either a compliance or company cognitive bias issue rather than viewed as a cultural change programme that is underpinned by an underlying business priority and performance outcome. The problem with the aforementioned is threefold:
- Organisations only address the symptoms rather than the root causes of disengaged populations and workforces.
- Therefore, interventions are not taken seriously as a business imperative and therefore do not make the impact they should be despite what the research says.
- Thus, companies don’t leverage the full benefits of creating an inclusive culture.
In my view, we need to re-visit the original CIPD definition of D&I and deepen the leadership team’s understanding of the human condition so that individuals and organisations can benefit and capitalise on becoming more inclusive as an organisation.
Traditionally, culture change is about the leaders having a clear rationale and narrative for the case for change and also a genuine commitment for shifting the organisation to becoming more inclusive. The issue with the traditional way is that employees are fatigued by constant change and do not see many leader’s behaving genuinely. Instead of taking the status quo route to change, leader’s need to have a deep understanding of the ‘why’, (from a human and business perspective) before they communicate their vision to the stakeholders and half-heartily commit to making it a reality.
Culture change often fails not because the strategy was the wrong one, or the training didn’t stick, it’s because organisations are trying to fix a symptom, rather than addressing root causes.
Becoming more inclusive
To shift the organisation to become more inclusive, firstly the leaders need to be onboard. Due to the inclusive nature of this work, it is essential that they first understand what it is to be inclusive as a team before embarking on top-down, bottom-up or functional cultural change programme.
Traditionally cultural change would be initiated following an event, maybe as a result of a crisis and unwelcomed media attention causing fines to be issued or shares to fall. In either case, it’s not then uncommon for auditors or consultants to appear to assess the situation, analyse the data, then make recommendations for improvements to the structure, processes, and people capability. This then becomes the a +b + c = d hypothesis for the case for change.
There’s nothing wrong with this approach, however, due to the nature of creating an inclusive culture and as culture ripples down from the top, leaders also must be open to seeing what’s driving their behaviour and how they are operating and role modelling behaviours as a team rather than just pointing to what’s wrong on the outside.
Using a number of diagnostic approaches as outlined below, leaders must be open to other baseline data-sets to gain a breadth and depth of different perspectives concerning the current leadership behaviours driving the culture and desires for a future state:
- A 360-degree evaluation of their individual behaviours and underlying assumptions to understand if they are role modelling inclusive values.
- A collective team 360 view of behaviours and assumptions to understand team behaviours and biases across groups.
- A cross-organisational view is looking at employee engagement data, conducting an ‘inclusion climate survey’ then running focus-groups with top non-positional key influencers.
Once people data has been collected and analysed, it is essential to present findings back to the leaders, so they understand the current state of the organisation and then work with the leaders to understand the desired culture, its vision and purpose and what is required to shift the organisation to its desired future state.
The approach to culture change arises from beliefs and underlying assumptions held by leaders and employees across the organisation, therefore traditional training interventions will not affect people’s beliefs. The most effective way to effectively and sustainably kick off culture change programme is to educate the leaders through a series of disruptive experiences around the subject to enable them to embody the essence of inclusion.
Set up this way, it allows leaders to become aware of how they have been operating, update their individual and team operating system away from reactive tendencies to more creative competencies akin to leadership effectiveness and business performance and then more easily role model the right behaviours at this leadership level. This equally sends a strong message to employees that they are committed.
Delivering cultural change across the organisation
If you’re a startup, due to your company’s size, delivering cultural change might be reasonably straight forward as you can have a direct relationship with employees in your company and hold all-company meetings to gain insights and align the team. In this case, you might also want to consider having an all-company inclusion cultural immersion rather than just taking yourself or C-suite offsite.
If you are at the 150 employee mark or a large organisation, then you can use one of these three ways to deliver cultural change across your organisation using a mix of experiential leadership workshops, group or one-to-one coaching, educational sessions and delivery frameworks such as agile.
- Cascade top-down — once leaders have been re-educated, aligned and committed on future state culture, they drive change and role model behaviours in their respective part of the organisation and monitor the change overall in terms of behaviours and practices and overall performance drivers.
- Functional or slice — this would look to effect change in a particular functional area where you will be looking to improve business results in a specific area through more inclusive and creative behaviours. Choosing an area that works across the organisation such as HR or commercial, would also create a tipping point where behaviours are pervasive and cultural change is emergent.
- Cross-company — non-positional leaders and influencers from the focus-groups are brought back together to learn about where the organisation wants to go, and they come up with the solutions and champion implementing the new behaviours and changes into their informal networks.
- Diagnose: Work to diagnose the internal biases and leadership behaviours that are currently creating your culture and business results not just external events and feed this back to leaders.
- Immerse: Start by facilitating leaders to understand what creates these unconscious biases and behaviours and what creates inclusive behaviours in an immersive experiential event.
- Align: Align leaders by creating a future state and measures including purpose, vision, values (internal conditions), behaviours, methods and performance measures that will get you there, obstacles that might get in the way and how you will overcome them.
- Design, Deliver & Evaluate: Design your cultural transformational approach and choose a delivery approach to implement, monitor, review and evaluate progress.
Whatever approach you decide to take to build a creative and inclusive culture, remember it starts with the leaders and how they operate as an individual and as a collective team. The more aware the leaders of your organisation are the more aware they are of the behaviours that are conducive for inclusion and performance.
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