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Culture and Conduct

Workplace culture is top of the pops on the priority list for most business leaders right now. And whether it’s the increased regulator focus on non-financial misconduct, the steady stream of alarming misogyny and sexual harassment cases hitting the headlines, or first-hand experience of a toxic working culture that’s keeping you awake at night, it’s clear that culture is no longer the mainstay of HR alone. Make no mistake, this is a leadership issue. But for an issue so high on the workplace agenda, here’s the tricky thing about culture: It can feel abstract, unquantifiable, intangible. Culture is influenced by a universe of variables, including attitudes, biases, behaviours, and everyday interactions on the ground in teams. And workplace culture can be governed as much by the unspoken and unwritten rules as it is by formal policy and company values. These challenges combined mean that not only is workplace culture difficult to measure, but it’s not a constant state. In this edition of Inclusion Insights, we look to unpack the priorities for leaders and organisations in building and maintaining a healthy culture in an evolving workplace landscape.

Workplace culture: It ain’t what you do, it’s the way that you do it The late, great Edgar Schein described culture as being “Constantly enacted and created by our interactions with others and shaped by leadership behaviour, and a set of structures, routines, rules and norms that guide and constrain behaviour.” There are many definitions of culture, but in the simplest terms, workplace culture is really about how things are done around here. We’re talking about the behaviours, mindsets and everyday habits that determine how we make decisions, how we serve our clients, how we communicate, how we collaborate, how we treat those around us… The list goes on. If you’ve ever worked in an organisation or team with a toxic culture, it will be no surprise to hear that poor cultures damage trust and inhibit innovation and creativity. But when staff feel they have a voice and their contributions are welcomed and valued, new ideas and fresh perspectives are more likely to shape and improve approaches, and help us make better decisions. But for the regulators, the focus on workplace culture is primarily about risk reduction, with poor firm culture described by the FCA as a “major cause of conduct failures”. If workplace culture has reached the top of your to-do list, you’re not alone. We set out four important takeaways, and tips for leaders and HR practitioners who want to take action.

  1. Staff are quick to spot leaders who fail to walk the talk We all know that when it comes to workplace culture, walking the talk matters. But there is more scrutiny in today’s workplace, and staff are often, rightly, less prepared to tolerate or overlook leaders who behave badly. But this isn’t just about explicit harassment or discrimination, staff will notice everyday words, interactions, demeanour. In today’s workplace, leaders are not only required to live by workplace values, they should be amplifying them. PWC’s Global Culture Survey has found that employees tend to feel less positive about culture than their employers, and that sometimes leadership behaviours contribute to the mismatch. In response to the statement “Our leadership team walks the talk on purpose, values and culture”, PWC found that 73% of Board and C-Suite participants responded positively, compared to just 46% of those below management. What can you do as a leader? It sounds simple, but get out there and talk to people. Engage with those who fall outside of your typical line of sight. Ask for feedback. Surrounding yourself with a “challenge network” rather than a “support network” can build your awareness of how staff really feel, and create opportunities for personal growth. And if you would benefit from a little support, talk to the Inclusive Group team about our 1:1 coaching offering, which can provide a safe space for leaders to unpack fears, concerns or uncertainties around culture and EDI.

  2. Beware of the (awareness) gap What are the consequences when poor workplace behaviours become so ingrained, they are not only tolerated, but they can go completely unnoticed… (by some)? Through workplace culture reviews, we have spoken to many women leaders who became so conditioned early in their career to “tune out” misogynistic comments, that they often don’t notice when sexist remarks are made by male colleagues today. Junior colleagues are not only likely to clock the comments, but they will also see, and feel let down by, the inaction. And regardless of the industry, we have seen that it’s common for staff to air frustrations about the rainmaker who routinely berates, belittles or bullishly overworks junior staff. Oh this behaviour might not go unnoticed by senior figures, but it often goes unchallenged. Because, well, erm, well, that’s just the way [rainmaker] operates. When poor conduct becomes normalised in organisations and teams to the degree that we don’t notice it, or we choose to ignore it, it sends a deeply uncomfortable message to junior staff. And if culture is a priority for your organisation, that’s a problem. An important question for every leadership team and board is “Are we doing enough to disrupt the normalisation of poor conduct?”. Diverse perspectives can be incredibly valuable here. Different viewpoints help to highlight awareness gaps and challenge the status quo. And what to do with the poorly behaved rainmaker? Of course it’s important to consider whether there are sufficient grounds for your HR team to investigate the behaviour and, as we highlight below, it’s crucial that staff feel safe to speak up and report issues. We have found that behavioural coaching can be a powerful way to create greater awareness and personal accountability. Coaching is a relational and visceral learning approach, that enables deep self- reflection and enquiry, in a safe space. To have real impact, coaching should take place over an initial 6 – 12 month period.

  3. Prioritise psychological safety The financial regulators have championed the concept of psychological safety, where staff feel safe to speak up without fear or embarrassment or reprisal, and where organisations and leaders are prepared to listen. But speaking truth to power is rarely easy. As a first step, it’s important that organisations review their formal reporting channels. Do staff trust these channels? Are they aware of how to report concerns or raise grievances? But the importance of psychological safety stretches into our everyday working environment. In an environment that lacks psychological safety, staff may feel afraid to admit mistakes, to ask for help, to share ideas or to raise an alternative view. Staff may also find it incredibly difficult to challenge exclusionary behaviour. How do you evaluate the level of psychological safety in teams? One approach developed by Amy Edmondson, the pioneer of workplace psychological safety, involves a short questionnaire to help leaders to assess perceptions in their team. And how to embed psychological safety? Our training with leaders and staff increasingly includes a focus on speaking up and listening up, providing staff with tools to navigate situations and language to help them to approach and plan difficult conversations.

  4. Critically survey your cultural foundations Finally, workplace culture should of course always be underpinned by policy, training and reporting mechanisms. While almost every organisation has these foundations in place, that’s not to say these provisions are effective, or that they have stood the test of time. Taking time to review and refresh your policy and reporting lines on a regular basis is crucial.

As for training, employers often grapple with the question of mandatory versus voluntary. While mandatory training can run the risk of creating resistance and resentment, as we all know, those who need training the most are very unlikely to attend it voluntarily. Our view is that mandatory training on workplace culture is a must. And that, to ensure issues remain front of mind, it should be repeated annually. And how do you deal with the naysayers? We recommend selecting your training provider carefully, holding in person training (rather than eLearning) and ensuring training is discussion-based with scenarios that feel relevant and relatable to your organisation. If you would like to discuss how Inclusive Group can support your organisation in reviewing cultural strengths and shortfalls, in coaching your leaders and managers or in delivering programmes focusing on psychological safety and embedding speak up cultures, we would love to hear from you. Please get in touch to arrange a conversation with a member of our team.

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