01 October 2023

Minding the Corporate Culture Gap

 "Maintaining an effective culture is so important that it, in fact, trumps even strategy."

--Howard Stevenson

(C) LinkedIn

If you were in any one of the 2,750 railway stations across the U.K. during King Charles III Coronation Weekend, 5-7 May 2023, you likely heard the monarch himself in a specially recorded message to "mind the gap," when boarding trains on the British Rail System and the Underground tube network.

"Wherever you are traveling, we hope you have a safe and pleasant journey. And remember, please mind the gap," Charles added.

Reuters reported that this famous phrase, the British version of the American admonishment to "watch your step," was intended to warn passengers about the gap between the train carriage and the platform. 

New norms for the office class

In his book, The Fifth Discipline, published in 1990, Peter Senge, Ph.D. wrote that it takes a powerful force to break a vicious cycle. Thirty years in advance of unprecedented nationwide lockdowns, was Dr. Senge foretelling a global pandemic reshaping in-person office work, and altering corporate cultures? 

Who could have imagined 36 months ago a coronavirus or AI would make it possible to consider normalizing a 32-hour workweek. Or that almost one billion square feet of empty office space would be on the market in the U.S. alone due to overbuilding and worker safety.

As of July 2023, 59% of full-time employees are back to being 100% on-site, while 29% are in a hybrid arrangement and 12% are completely remote, according to new data from WFH Research. 

Even Zoom is making people return to the office.

Pre-pandemic, just 5.7% of the nation's workers worked remotely. That 2019 baseline figure indicates a rapid normalization of virtual environments. (CNBC) 

"Research shows that a solid majority of knowledge workers want flexible arrangements after the pandemic. Company leaders face the challenge of reimagining their culture for a world where rituals and ceremonies enacted in the office are inaccessible," says Pamela Hinds and Brian Elliott. (Organizational Culture, Harvard Business Review, February 2021)

Those negotiations also include receiving the same pay and benefits for less time. *

How to imagine again?  

What is corporate culture?

Dr. Edgar H. Schein was a social psychologist who moved easily between academic theory and the practical sides of organizational life. A professional acquaintance, Dr. Schein was the Society of Sloan Fellows professor of management emeritus at Massachusetts Institute of Technology (MIT). His contributions to the understanding of corporate culture were groundbreaking and a lasting legacy.

Dr. Schein's book, Organizational Culture, and Leadership proposed that culture can be analyzed on three levels:  

Artifacts--the constructed environment of an organization including its architecture, technology, office layout, dress code, visible or audible behavior patterns, and public documents like employee orientation and handbooks. They are easy to collect but difficult to interpret. 

Values--the reason and/or rationalizations for why members behave the way they do.

Assumptions--typically an unconscious pattern that determines how group members perceive, think, and feel. While mostly taken for granted they are the ultimate source of values and actions.

"It is the deeply held assumptions and values that lie below the waterline but profoundly shape behavior on a day-to-day basis," says MIT lecturer Donald Sull. 

A company's culture includes the qualities that set it apart from other organizations. A well-defined culture attracts the kind of talent that prioritizes shared values. The potential outcomes are greater employee engagement, productivity, and talent retention. (Indeed) 

"In addition, it is a place where there are clear and consistent processes and healthy conflict management balanced with adaptability, learning, and the ability to shift as necessary for customers and the market," writes Tracy Bower, Ph.D., in Forbes. She adds, "A perfect match with culture is more important than particular attributes of the culture."

An opening between two things

In a new Gallup survey, more people who work from home say they don't feel a connection to the mission of their companies. A gig-worker mentality increasingly describes the current remote work environment.

The share of remote workers who said they felt a connection to their organization's purpose fell to 28% from 32% in 2022--the lowest level since before the pandemic. The findings are from interviews with 9,000 U.S. workers whose jobs can be done remotely.

By contrast, the same Gallup report shows that a third of full-time office workers reported a sense of connection, nearly the same as last year. Hybrid workers reported the highest connections with 35% saying their company's mission made them feel their jobs were important. (The Wall Street Journal)

Gallup found that 38% of people who work remotely full- or part-time are engaged, and enthused about their work, compared with 34% of in-office workers.

"Conflicting metrics show bosses don't have any easy answers as they provide flexible working arrangements yet fret about worker productivity," says Lindsay Ellis who covered this story for the Journal.  

Narrowing the gap

What should leadership be doing to create a corporate culture that transcends time and space?

Here are the main points from the Harvard study:

The first hurdle is acknowledging that culture can no longer be forged in the same way as it was in the office-centric model. 
Be explicit and repeat often about the purpose and meaning of the organization. 

It's not that company culture somehow goes away in a remote or hybrid context. Cultural beliefs and norms are still being created and reinforced, but they're not being guided by systems and routines that were previously established in the office. They're more open to change and subject to influences from new, non-work factors present in employees' day-to-day lives. 

Culture is evolving despite being remote and that organizations need to invest a substantial amount of time and energy into keeping their cultures on track or steering them in new directions. Organizations that fail to do the deep work required to rethink the transmission of company culture may well have unpredictable results.

Leaders can do nothing; work to craft new ways of reinforcing the existing culture; or capitalize on the shift to remote work to profoundly reset the culture. 

In summary

Corporate culture, understood and employed correctly, is a powerful force. Though the ideal culture can be different for different people. 

Institutional knowledge is lost due to staff turnover, retirement, and death. Therefore, generational culture carriers are required to make the relevant historical artifacts, values, and assumptions--especially the organization's character--known to new people. 

Cultures have difficulty recovering from neglect. And widespread contagions don't help.

However you decide to address the realities of this remote work--corporate culture predicament, there's a lot at stake. So watch your step. 

*In its Stand Up Strike against GM, Ford, and Stellantis (Chrysler, Jeep, and RAM trucks), the United Auto Workers is seeking a new contract calling for 32 hours of work with a 40% pay increase over three years.


© Bredholt & Co.