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What is the secret ingredient of corporate culture?

Lubna Qassim posted this on

What is the secret ingredient of corporate culture?  This was the question asked at Hawkamah’s 10th annual conference on Corporate Culture where I was delighted to be a speaker.  Of course, culture is such a critical part of governance.

As Hawkamah says, in introducing this subject, “a flawed corporate culture has emerged as a root cause of many of recent financial scandals. This has attracted the attention of regulators and governance experts especially recently with the Financial Reporting Council (UK) issuing a report on corporate culture and the role of the board.”

Here I want to share the points I made at the event and those of my fellow speakers Michael Masceranhas, CEO, Desert Group; Anil Kumar Parimoo, Chief Risk Officer, Dubai Islamic Bank; and Johan Brand, Managing Director, Leadership Advisory with our excellent moderator, Alec Aaltonen, Vice President of Hawkamah.  I hope you find some secret ingredients here.

  1. Who is responsible for corporate culture?

This is an interesting question.  In a way I believe everybody in an organisation is responsible for corporate culture, yet clearly responsibility has to be allocated to an individual.

The board has to set the vision and agree the culture needed to achieve this but it is the chief executive’s responsibility to set the tone and use communication tools to ensure culture is consistent across the business.

Everyone in the executive team has to ensure they lead the way in terms of behaviour and living the values.

It sounds very easy to say the leadership team has to ‘live the values’ but the reality can be very challenging and involve tough choices and decisions.

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World Class Benchmarking brings this to life in its case study of Disney.  From the beginning, Disney has placed safety above everything else they do – the other three values are courtesy, show and efficiency.  Safety sounds so obvious, but we will all have seen challenges around the leadership table where you are looking at costs, customer experience and what can be achieved.  So ‘safety’ is being looked at in the wider business context and that clear focus on safety first can easily become rather blurred.  How safe?  What did we really mean by ‘safety’?

There was a horrific accident at the roller-coaster park of Alton Towers in the UK last year.  In a report prepared by a fairground expert for the Health and Safety Executive, it refers to a member of the Technical Services team, saying “It is clear that his priority had become getting the ride quickly back into service, and he felt pressured to that effect and … also indicates that management had set targets for downtime on rides, with bonuses linked to achieving acceptably low levels.”

So targets for profitability and efficiencies, such as downtimes, were confused with safety – they skewed the simple focus on ‘safety’.  Every decision taken in an organisation contributes to the corporate culture and its effectiveness.

  1. How should corporate culture be communicated?

Too often, a corporate culture is agreed and then a brass plaque is put on the wall – and then not much else happens.

For a culture to be lived across a business, the leadership has to be connected to everyone in the organisation.  If the values are not seen by those working on the front line, working with customers, then they are meaningless.

In my last blog, I looked at the issue of ensuring honesty and transparency in business – and ensuring corruption cannot live.  I mentioned that at Emirates NBD, we have introduced a whistleblowing policy.  This is a good example of bringing values to life.  It is no good just introducing a policy – our leadership team have had to work extremely hard to ensure people have confidence in using it and understand why they should speak up if they feel a practice is at odds with our policies.  We have spent a lot of time and effort on creating awareness, training our employees and giving assurance to employees if they speak out. I think one of the most elements of the policy is that we will reward employees who speak up – not penalise them.

I would argue this is all very powerful in the message that we mean what we say about corruption – it is not just the message but living and breathing this and ensuring it is easy for employees to follow those values.

  1. How should you measure and evaluate a corporate culture?

At the Hawkamah conference we discussed the formal ways of evaluating culture – through employee surveys and customer service surveys.

But the best way has to be the chief executive and fellow leaders walking the talk in the business?

A truly inspiring example of this was seen earlier this year.  Our ruler and prime minister, His Highness Sheikh Mohammed bin Rashid Al Maktoum, walked unannounced into the offices of the Land Department and Department of Economic Development at 7.30 in the morning to find empty desks which should have been occupied.  He posted a video of his visit on Instagram (click below to view this) and then retired nine leaders – saying the country needed a new generation of leadership.

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This is leadership in action, demonstrating the values by doing them.  The Sheikh was up and working at 7.30am and expected others to be doing the same.  And he took action to say this behaviour is unacceptable.

Human beings are the best imitators – they learn by watching and copying.  If leaders do not walk the values, why should their employees?  They will copy the behaviours set by the leaders.

While you can have long lists of surveys and ways to evaluate corporate culture, the quickest way is for leaders to walk their companies, setting by example and ensuring the values are lived every day and all day.

The questions at the Hawkwamah conference show this is a topic that is becoming more important in organisations and businesses are keen to learn and share practices and stories.  I would welcome hearing your stories so we improve this important area of governance.

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