Assessing cultural frameworks

There are a handful of factors that have the greatest influence in creating a healthy organisational culture according to Yvonne Willich, organisational psychologist at  KordaMentha.

In an article published by the advisory and investment firm, Willich explains that the foremost "cultural element" is that leaders "walk the talk" of the organisation's values. Other factors include financial incentives structure and the way that challenging and alternative opinion is received within the organisation.

"Healthy cultures welcome challenge and honesty. Unhealthy cultures suppress dissent," says Willich.

In order to accurately assess culture, internal staff surveys should address these factors, Willich says. However, surveys generate a lot of data without asking the crucial questions. If the CEO does not want to include all questions that scrutinise leadership, it would be a very courageous HR team who pushed for greater survey validity. The real picture may lie in what is unexplored and unreported, she says.

Ironically, Willich says, the reality is that an organisation's ability to assess its own culture correlates directly with how healthy its culture is. Organisations with a healthy culture and strong leadership will assess themselves with rigour and integrity. They have the resilience to accept their failings and address them.

Businesses with unhealthy cultures and leaders who have a personal agenda to preserve the status quo will do a very poor job. They want to be seen to do something while hiding the facts. They may comply with requirements but will present data that obscures or omits the truth.

Willich highlights an example where the board of an organisation has requested an independent review following suggestions of inappropriate and unethical behaviour within the organisation.

"The initial response of the CEO was to suggest that he would get the Big Four firm who audits the company to look at the issues and write a report for the board. The partner in the audit firm is conflicted by both his personal and professional relationship with the CEO. His report would be unlikely to implicate the CEO and other executives in any serious way," Willich explains.

While culture surveys can be good indicators of risk, there are five questions boards should be asking before signing off on one. According to the article, these are:

  • Have we conducted a confidential organisational survey recently?
  • Who checked that we asked all the right questions?
  • What did responses show were our main risk areas?
  • What have we done to get an independent, deeper look at these risks?
  • How might our process be compromised by conflicting interests?

For more information, read the article Corporate Culture: The questions.