Kathryn Gallan, a Principal Consultant in Berwick Partners’ IT & Digital Leadership Practice, speaks to Brad Taylor, People & OD Director at the CIPD, about why companies with a clear purpose perform better.
I was delighted to spend some time with Brad Taylor, People & OD Director at the CIPD, the professional body for HR and people development. The CIPD’s stated purpose is ‘Championing Better Work and Working Lives’ and it represents the global HR, Learning and People Profession.
We discussed why having a clearly communicated company purpose is important for the workforce at every age.
Brad, the CIPD is the voice of the people profession; are employee expectations changing and what feedback are you receiving from companies?
What people want from work has changed and is continuing to change at an ever-increasing pace. Case in point, over the next few years, Generation Z (those born between 1995 and 2010) will enter the workplace – that’s 61 million people who have never known life without technology. Younger employees have a very clear definition of what they expect to get from work and a clearer vision of what being successful on their terms means.
I think most people are aware that the tenure of employees is getting shorter and this generation believes they cannot rely on a company to be responsible for them. They have accepted they need to be accountable for their own careers and, with this, they are more responsible for their own learning. This generation is prepared to invest their own time and money in becoming more ‘marketable’ so they can work on their terms.
Accordingly, they have a different perspective of what they will commit to their employer. For Generation Z, it isn’t about engagement but commitment and that’s why having a clear, authentic purpose is so important. If purpose isn’t clearly communicated, there will be a misalignment between the organisation and its sustained ambition, as individuals put their career and motivations ahead of the company’s. We are already starting to see how individuals spend less time with an organisation and an outcome of this is that it impacts on brand promise. For example, if a company prides itself on long term relationships with customers, those relationships will be compromised by a relatively quick succession of customer facing staff. If a company takes the view that training isn’t worthwhile because it can’t recoup the investment (due to reduced tenure), service levels will suffer, and customers will choose to purchase elsewhere. Our role as people professionals is to help companies navigate these challenges.
Are there other trends that are occurring?
The future workforce is more entrepreneurially-minded and very conscious of their ‘own brand’ and how they can use it to work on their terms, doing work they find more meaningful. Similarly, many aren’t entering the world of work ‘business ready’.
It would also appear there aren’t enough organisations thinking about what their sector and business will look like in 10 to15 years. The way technology is changing is creating new ways of working (remotely and at different times), meaning that building engagement and commitment among staff is essential. Interestingly, we’re seeing that employees in organisations of all types have the same expectations as their customers. When they feel passionate about a brand and its cause, they will champion it. When the organisation acts in a way employees feel goes against what it stands for, they’ll be vocal about it - often on social media. Some business leaders are finding that many employees are unafraid to use their voice and are unashamed to ask bold questions.
That’s an interesting point. If we look at brands with clear purpose like Facebook (connecting the world) and Uber (good things happen when people can move) how much pressure is there on leadership teams to balance what customers are saying they want with moral and ethical decisions?
As you’ve used Facebook as an example, let’s look at that. Purpose must come from a place of good intent and Facebook was/is about creating positive connections, being transparent and allowing freedom of speech. Its view was that users felt the same way and would effectively ‘police’ themselves. The scandal of Cambridge Analytica, mining data on the site and allegedly skewing political agendas, shows that ‘purpose’ has philosophical, moral and ethical implications. The challenge for businesses is how can they achieve their goals ethically, or not at all.
When a business is small, it is easy to understand its purpose. One of the reasons tech companies are so successful is because they are set up with a clear purpose of making something better. Everyone who joins does so on the premise of trying to fix a problem or make something better. As employees buy-in to this and work collegiately, there is little hierarchy, no bureaucracy and minimal requirement for complicated policies. As a business gets to be really big, this is no longer possible. Not only can the founders not connect in the same way, but they can’t make every [hiring] decision. They must empower their leaders and managers to exert their judgement and trust they carry out their roles effectively. Suddenly, there’s an expected way in which things should be done, whether it’s pressure from the City, regulators or consumer interest groups. Business leaders have to be incredibly clear on how to deliver purpose and that is about good strategy setting.
Whether you set it out as blue-sky thinking or strategy, you shouldn’t allow space for people to ‘fill in the gaps.’ If this happens, you’ll soon find people doing their own thing to achieve outcomes they think are required. Similarly, if you’re not paying attention to the people you’re bringing in to the organisation, gradual shifts in behaviour occur. These shifts can be positive and negative.
Can we talk more about how behaviour and values fit in with purpose?
As a positive example, the automotive industry is being disrupted as technology advances. The sector had to bring in different types of people, with different thinking and experiences, to set its future strategy. Without this, it’s likely that the advances in automotive engineering would have been much slower, and the ramifications for the UK would have been significant as other countries embraced the art of what’s possible.
Hiring individuals with the wrong behaviours can be catastrophic. Organisations must be clear on cultural fit. They need to know the behaviours and values that matter, and those that don’t. If you look at the PPI mis-selling scandals, banks were talking about being customer-focused but in areas where the leader’s behaviour was ‘make the sale’ over ‘do what is right by the customer’s circumstances’; they were sales focused at the expense of the customer. There’s no point talking about being a certain way if it isn’t true, and language and actions speak volumes. You can’t say you’re an innovative business if you’re slow to pilot new ideas, or say you’re in it for the long term if you’re quick to cut costs and cancel projects. Employees quickly see through contradictory behaviours and they will find a way to voice their opinion, whether it’s through internal mechanisms or externally through online arenas like Glassdoor. Future employees look for company culture and CEO approval, and contradictory or negative views will impact the choice and quality of people you want to hire.
If we look at the examples cited earlier, Uber hasn’t been without its fair share of scandals and is working incredibly hard to correct its course of action. What are the warning signs of a toxic leadership culture and how should HR address it?
Toxic leadership is a mixture of self-serving attitudes, behaviours and motivations that have an adverse impact on employees, suppliers, customers and ultimately the organisation’s performance. I would recommend a business addresses whether its Board collaborates effectively and is having challenging conversations around the table. If it’s not, it means behaviours are deteriorating and they will play out negatively in the organisation. This may mean managers not getting on board with change programmes, encouraging their teams to sit back and watch initiatives fail or, on a more serious note, breaking the law to further their aims.
In your opinion, do organisations call out values enough?
There are enough lessons being taught about not waking up quickly enough. The PPI scandal was a result of an industry-wide culture which promoted sales focused values over customer focused ones and in this instance, mis-selling became a widely accepted norm. Strategic HR can be invaluable in seeking out deep-rooted behaviours which are endemic in business cultures and driving positive change within an organisation. By working with leaders across all levels of the organisation to embed what the values are (and are not) and demonstrating leadership role modelling etc, it’s possible to create an organisation which ‘walks the walk’. The worst-case scenario is to say one thing and act a different way as this creates mistrust in leadership.
Although we’re talking about the role HR plays in creating positive environments and behaviours, it isn’t their responsibility alone. Organisations need to be wary of making HR the custodian of culture. Instead we want this to be the responsibility of business leaders, managers at all levels and every person in the organisation who works for the organisation. It should be top-down, but it should be felt by everyone at every level.
What are the opportunities for organisations (or HR professionals)?
The positives are that if you can find ways to communicate your organisation’s purpose and it resonates with your employees, they will commit to the cause. Support your managers in creating a narrative which furthers the cause, and help every employee understand how their role is integral to the company achieving its ambitions. Ultimately, it’s about good people practices. Have appropriate outcomes which are aligned to your vision. Create clear and consistent communication around these areas and make sure employees are not left with blanks to fill-in what is desirable and undesirable behaviour. Have performance evaluation mechanisms which allow employees to talk freely about their career ambitions, focus on developing managers and leaders who can talk about what great performance looks like and invest in their ability to coach their teams.
In conclusion, we’re becoming much more conscious as a society and more people want to do work they class as meaningful. As employers we have a duty to communicate why each and every role is important to furthering our business cause, allowing our people to be proud of what they do and who they work for, however long we keep them.
Kathryn Gallan is responsible for hiring customer facing, commercial leadership positions. If you’d like to discuss how bringing in diverse talent to customer, marketing, digital or technology roles will benefit your business, you can contact her on 0121 654 5952 or email email@example.com