Investigation finds many widely adopted approaches are unnecessary and counter-productive
Regulators and HR practitioners who call for culture change to prevent behaviours that led to the last financial crash are barking up the wrong tree according to research findings by the University of Greenwich’s Prof. Colin Coulson-Thomas which have just been published. The evidence of a five year investigation suggests attempts to change corporate cultures can be counter-productive and are not necessary when there are quicker and easier ways of changing behaviour, preventing undesirable conduct and ensuring compliance.
Coulson-Thomas argues that: “Calls for general and fundamental change of structure, culture or procedures should trigger alarm bells. Continuity can be as important as change, particularly continuity of relationships and consistency of experience that meets customer expectations and requirements. Changes can create new opportunities for fraud, theft, hacking and other abuses. Uncertainty during a period of transition or transformation, or while changes are bedding in, can create new loopholes and vulnerabilities.”
The Professor believes: “Customers, employees, business partners, suppliers and investors often represent a diversity of cultures, religions, values and nationalities. A variety of perspectives can spur creativity. General culture change is often advocated where there are affordable ways of quickly changing behaviour and achieving other aims with existing people and cultures. Fraud and other abuses usually result from technical loopholes and vulnerabilities rather than deficiencies of general attitudes and values.”
In summary, Coulson-Thomas suggests “many general corporate culture change programmes and associated training may be unnecessary if their purpose is to quickly alter specific behaviours in particular areas. Organisations may need to embrace a diversity of cultures and encourage a variety of approaches and behaviours across different functions and business units. Performance support which integrates learning and working can be a cost-effective way of changing behaviour, ensuring compliance, enabling people to innovate and remain current and competitive, and delivering multiple objectives without requiring a change of personnel, culture or structure.”
Coulson-Thomas points out that: “To a libertarian attempts to change attitudes, beliefs and values might be as unwelcome as the efforts of totalitarian regimes to change how their people think. One response to a desire or request for culture change could be questions such as change to what culture or to whose culture? Will the attitudes, beliefs and values of a CEO, board or consultant hired to advise on culture change be better or worse, or more or less relevant and/or appropriate to various situations and contexts than an existing mix of attitudes, beliefs and values?”
He continues: “Many HR practitioners need to question whether they are helping or hindering. My investigations of what high performers do differently reveal large and measurable differences in performance among people trained, rewarded and compensated the same way. The variability of performance across members of key work-groups raises questions concerning the relevance and contribution of many training, reward and other HR policies and practices. Wide differences are explained by how many critical success factors are in place. The extent to which the job, task or activity is done in a winning or losing way determines outcomes.”
The professor finds “Training, reward or compensation do not appear differentiators in the many sectors in which the policies and practices of competing companies seem largely the same. For key jobs such as bidding for business, building key account relationships, pricing, purchasing, or creating and/or exploiting know-how, the approaches of winners – or those in the top quartile of achievement – are very different from those of losers in the bottom quartile of achievement. Evidence from reports that have examined critical success factors for key jobs suggests that however much people are paid, whatever their culture and however motivated and engaged they are, if they approach a task or activity in a losing way they are likely to fail. Increasing motivation or remuneration in the hope of a better result while people’s approaches and the support they receive remains unchanged could be like pouring money down a drain.”
He continues: “Reward and compensation policies and practices also contribute to mis-selling and other abuses. The prospect of commission payments can bias views, distort judgements, encourage risky behaviour and result in a flouting of rules. There are other expensive practices and naïve behaviours, such as a policy of paying above average or in the top quartile to attract better people and then complaining about the cost of talent wars. Reward, compensation and other policies that companies pursue may have much less impact than those who champion them and/or have a vested interest in them claim.”
Coulson-Thomas suspects: “Many companies pursue policies that are general, time consuming and disruptive when quicker, cheaper and more affordable options exist. In relation to training, reward and other HR policies and practices a ratchet effect may be in operation. The wrong policies may have a negative impact on behaviour, while many expensive approaches deliver little in the way of positive benefits in relation to other and better ways of improving performance. Too often those in roles that are neither visible nor a source of competitive advantage or differentiation benefit the most from general remuneration policies. Supporting key work-groups is the key to success.”
Prof. Colin Coulson-Thomas holds a portfolio of board, academic, public and voluntary appointments, including being a member of the business school team at the University of Greenwich, Director-General for UK and Europe of the Institute of Directors of India and leader of the International Governance Initiative of the Order of St Lazarus. He has advised companies in over 40 countries on how to improve director, board and corporate performance. The evidence in parts one and two of an article “Learning and behaviour: addressing the culture change conundrum” published in Industrial and Commercial Training draw upon three reports Transforming Knowledge Management, Talent Management 2 and Transforming Public Services by Colin Coulson-Thomas which summarise the findings of a five-year investigation into the most cost-effective route to high performance organisations. They and some 20 studies of critical success factors for key jobs are published by Policy Publications and can be obtained from www.policypublications.com
02 Jun 2015
Colin Coulson-Thomas