The Oxford dictionary defines culture as “the ideas, customs, and social behaviour of a particular people or society.”

As organisational change consultants, we tend to notice the character and culture of each business we visit. The evidence for this can be found in the location of the office, the volume of noise or conversation within, what is on the walls, how the reception area looks and feels, the style of dress, the promptness with which people start and end meetings, how decisions are made and how success is recognised and celebrated. Like families, tribes and societies, businesses develop their own unique traditions and behaviours that are based on their values and the character of their senior leadership.

In its 2015/16 business plan, the Financial Conduct Authority has determined that a key area of focus should be culture. Why? Because process and policy alone will not change the behaviour and habits of mind that led to the crash of 2008. If even the regulator recognises that culture matters, what can leaders to do develop a culture that is really fit for the future?

Our recent research “Leading in the new regulatory world” highlighted three key challenges for leaders wishing to shift the culture toward an alternative future:

  1. Being able to articulate and message their expectations clearly
  2. Defining what good looks like in the future state
  3. Driving the appropriate behaviour and culture through rewards

Let’s take them in turn.

Change the idea: articulation and messaging

In times of change and turbulence, the temptation can be to shut down and reduce communication to the minimum until the way is clear again. In fact, for leaders who want to create a culture that is fit for their next stage of development, messaging about a clear vision for the future is critical. In order for the culture to shift, individuals needs to know what the reasons are for needing to change, the challenges that will be faced along the way and have  a clear and engaging picture of the ultimate destination. Leaders need to appeal to both the logical rationale for shifting the culture and to the emotions, of both anxiety around the risks of not changing and the excitement of a new future possibility.

Recommendation 1: Leaders need to point to their future destination  – speaking clearly and frequently about their vision for the future.

Change the ‘customs’: what does good look like?

To be fit for the future, a business needs to be able to ‘future proof’ its talent pipeline. This begins with drawing a really clear picture of the future state you are looking to achieve. If one of my clients, a bank, wants to move from traditional face-to-face retail banking into offering its customers digital banking as standard, then it is clear that the definition of skills and the profile for talent will need to change. Either existing staff will need to learn a new way of thinking or they will need to be complemented by new team members with a digital skill set.

Additionally, the approach or behaviour may need to shift. You may need your people to become more customer-centric, more agile or more innovative, or you may need to alleviate risky behaviours that were previously tolerated. To achieve this, leaders and talent experts need to be able to define what good looks like in both skills and attitude. Involving staff in the discovery of these skill sets and behaviours can help to educate them about the future state and engage them in the solution.

Recommendation 2: Decide together what good looks like and how to plan development or recruitment to support it.

Change the behaviour: the use of rewards

Much of what determines a culture is defined by what is rewarded in it. If certain behaviours are prioritised over others e.g. make the sale at any cost, then the organisation develops a clear sense of what is valued most. If you want to shift a culture toward a different future state, you need to consider what behaviours you want to incentivise and then reward and recognise to drive these behaviours.

If currently, my design agency client is fairly siloed in its communication and delivery, but we recognise that a collaborative culture is going to be key to its future success, then we need to find ways to incentivise collaboration. Perhaps people have individual targets or goals to become familiar with the services of another part of the business, or to collaborate across regions or subject areas on a piece of work.

Recommendation 3:  What gets measured gets done. Work out the specific incentives and measure to drive the activities and behaviours you are looking for. Embed these into the reward and recognition system.

Like any new health and wellbeing regime in our own lives, behaviour change for our organisation requires a holistic approach. Know where you want to get to, explore the skill sets you need in place and then set tangible targets and offer rewards and recognition for goals along the way. Remember culture is the collation of your ideas, customs and behaviour. To shift it, you need to address all three.