When SHAPE launched in 1989, its six founders didn’t envisage power struggles, turf wars, one-upmanship or a preoccupation with looking better than your colleagues. In trying to address these issues, they discovered that internal culture is a direct indicator of future business performance, writes Gerard McMahon.
We hadn’t anticipated these less than desirable behaviours, but they did nevertheless visit the company for a relatively short period midway through its history.
A strategy of rapid top-line growth and product diversification in the mid-2000s had temporarily derailed our initial vision for a company built on a constructive culture that drove excellence in business performance.
It brought an influx of new people to the business, which has seven offices across Australia. A lot of new hires were made on perceived technical expertise, with not nearly enough emphasis placed on cultural fit.
Add to this the fact that we didn’t integrate a lot of these new people well enough, and this resulted in a significant cultural change.
If that wasn’t challenging enough, the global financial crisis (GFC) came along and heightened the issues we were confronting. Facing a rapidly contracting market, we cut our people numbers by 35 per cent, unwittingly adding the anxiety of job insecurity into the mix.
Building a better workplace
We took stock, and it soon became clear that we had lost our way culturally.
While we were experts in building spaces that aim to promote wellbeing and engagement within our client’s organisations, we had lost focus on building the thing that matters above all else: our people and our culture.
Thankfully, we still had the history of a constructive culture from our earlier years, and we had an exceptional team of people. We needed vision and leadership to get through this period.
In 2014, we started on a journey to turn it all around, recognising that a thriving business requires a positive culture. We knew this was easier said than done.
Culture has never been widely understood and is often considered difficult to measure and difficult to manage. A 2016 survey from Deloitte shows that only 28 per cent of CEOs surveyed in their Global Human Capital Trends survey felt they understood their culture well.
That percentage is probably overstated, because unless you measure your culture using a well-researched diagnostic tool, you have no way of knowing. You are simply guessing — or hoping — and, as many people have pointed out, hope is not a strategy.
We knew solid and impartial data would help us prove the case for investing in cultural change. We needed to measure our culture and establish a baseline to assess progress against it.
We started to measure with an effective yet simple tool, the Human Synergistics Circumplex, a tried and tested culture diagnostic tool. We used the results to develop action plans for positive change that would drive business performance.
Individual leadership skills also improved dramatically and were informed by 360-degree feedback using the Human Synergistics individual leadership development tool. Our annual culture survey enabled us to take a deeper dive into the correlation between culture and performance across our business units.
We discovered that the constructiveness of the cultures within each of SHAPE’s operations matched almost identically against their business performance in areas like financial performance, customer satisfaction, safety outcomes and staff churn.
Conversely, where a constructive culture existed, performance in all these measures was outstanding. As they say, “the proof is in the pudding”.
All of this information was crucial to perhaps the most important aspect of the change program: ensuring we had our senior leadership driving our transformation. We got buy-in to the cultural change program by providing compelling data correlations between culture and performance.
From defensive to constructive
Over the following years, a lot has changed at SHAPE — and we continue to focus on ensuring we are creating the most constructive and positive culture for our people.
With the insights gained, we have been able to dramatically turn around performance in our previously underperforming operations.
Our culture measures have very much become our leading indicator of future performance.
The rapid cultural turnaround we experienced and its effect on performance in our operations surprised even us, and it debunked the myth that culture takes a long time to change. We firmly believe our data-driven approach played a huge part in how quickly we were able to improve.
Culture is not as nebulous or difficult to shift as many who put it in the “too hard” or, paradoxically, the “soft skills” bucket might suggest.
Gerard McMahon is the co-founder and head of leadership and organisational development at SHAPE.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.