CEO must walk the talk

Below is a fictionalized case study that presents dilemma faced in real organizations. And written by me is the recommended solution to the problem. This has been published in Business Manager Magazine May 2017 edition.

Case Study - What makes or break the organization culture?

Alpha Corporation is an organization that takes care of its employees in a number of ways. The company has initiated many steps to make things easier for the employees and to promote positive organizational behavior. On the transportation front, the company provides AC cab facilities to the staff to commute to the company. This service is provided free of cost. Among other free benefits, food is catered to the employees . Employees are strongly urged to work to complete their tasks during the scheduled working hours. All facilities are provided for people working overtime.

The senior management team closely interacts with junior team. Often managers come to the desk of employees with bouquets and organize small celebrations for employees on occasions such as birthdays and anniversaries. This encourages informal interaction and teaches employees a lot about the culture of the organization. Festivals such a Holi and Diwali are celebrated with lunch or dinner parties.

The culture of the organization is open and non-hierarchical. Many members of the staff are so impressed with the culture and the management style of senior managers that they have made them their role models. This has gradually resulted in building harmony in the organization. The regular interactions between senior management and employees enable younger employees to adapt to the organization much faster. They are given all possible opportunities to seek opinions and explanations from the senior management about any doubts that they might have.

There are regular training programs in the company. The training programs are on different aspects such as behavioral training, technical training, and domain-specific training. This contributes towards the overall development of the employees along with development in their technical skill. This also helps in making employees more congruent with the company policies and objectives.

The reward and recognition programs at the company are based on merit. The pay structures as well as the extra rewards are given on the basis of performance in different projects. The compensation offered by the company is competitive though not the highest in the industry. Employees are recognized for the work that they do during regular summits in order to honour leading performers.

The offsite programs for employees are arranged team-wise, business unit-wise, and pan-company wise. The general atmosphere in the company is that of stability and calm, and is conductive to learning and improvement. It has a great brand name internationally and maintains the same working conditions and policies for its employees in India.

Although the organization promotes positive behavior among its employees through various initiatives, there are some issues which need to be tackled. First, as a result of the free culture, the level of competition that can drive employees to greater success is lacking. Also compared with its peers, the organization does not provide fast career growth to employees, which may discourage and frustrate ambitious employees. As most of the organization’s systems are set and structured, there is limited scope for feedback and change. Also, as the organization is relatively large, it does not promote an entrepreneurial mindset in its employees, and takes fewer risks.

As projects are assigned arbitrarily to teams, some teams get to work on more challenging and exciting projects than others. This creates feeling of discontentment, irritation, and resentment in employees who are assigned less exciting projects. As employees are used to working only until 5:30 p.m, some of them are unwilling to put in longer hours when a larger project or assignment is due. As the organization tries to promote stability, it is also soft on all employees-including incompetent and unmotivated employees. Thus, the organization has to support more than its fair share of “deadwoods”, which affects and hampers the productivity of other employees.

Although the company sponsors several festivals, celebrations, and contests, participation is limited to a few enthusiastic employees. Finally, despite several fine initiatives, several employees are dissatisfied with their monetary compensation. Thus, this may be the primary reason why many employees are always on the lookout for an opportunity to quit the organization.

A few interesting trends were observed in the organization over the past few years. According to a survey conducted, most employees admired the organization and its values. Most employees who quit the organization did so within two years of joining, and were generally new graduates. Employees, who quit when at mid-management level are highly sought after and get attractive offers in leadership roles within the industry. Among the older employees, many have spent their entire career comprising more than 20-30 years in the organization. The top management comprises of a large percentage of women and non-resident Indians based in the United States.

Questions for Discussions and Solutions

1. How would you classify this organisation on cultural parameters?

The culture of Alpha Corporation seems to be that of family owned & managed based on traditional relationship value. This is evident from various examples like open & non-hierarchical culture, company wide celebration of festivals such as Holi & Diwali with Lunch & Dinner Parties, provision of employee facilities like AC cab for commuting, food, urging employees to complete work during office hours only, etc...

The culture of Alpha Corporation can also be viewed as not so professionally managed & maybe equated to that a start-up culture given by the fact that compensation though competitive is not as per industry standards leading to employee dissatisfaction and ultimately leading them to quit for better prospects. Most employees who quit the organisation do so within 2 years of joining & are generally new graduates. So Alpha Corporation can be deemed as Training Institute for Freshers or from where competitor companies can pick up skilled and trained employees ready to perform on the job from Day 1. No training investment required by them.

It also seems that all the employees seem to be working in their comfort zone and there is no competitive pressure on them to perform and sustain their positions. This is evident from older employees having spent their entire 20-30 years career or employees not used to working beyond office hours or putting in longer hours when a large project or assignment demands so. Alpha Corporation in its endeavor to promote culture of stability and care for the employees makes do with incompetent and unmotivated employees and supports dead woods, doesn't take any performance based action against them.

2. Identify the initiatives taken by the organisation to promote its strong culture

Alpha Corporation has undertaken many initiatives to promote its strong culture. This includes provision of free AC cab facilities for employees for commutation, food provision, facilities for working overtime. Senior management participates with junior team for celebrating occasions such as birthdays and anniversaries thus encouraging informal interaction. Lunch & Dinner parties are organised for major festivals such as Diwali. Thus Alpha Corporation has various employee engagement activities in place.

Due to open and non-hierarchical work culture, senior managers serve as role models for juniors and newcomers in the organisation. Juniors are free to seek opinions and explanations from seniors for any doubts that they might have without any hesitation. This has also resulted in younger employees adapting to the organisation work culture and its procedures much faster. This has also resulted in building harmony amongst the employees in the organisation.

Structured training programs exist in the company on different aspects such as behavioral, technical and domain-specific. This helps them to develop their competencies and also make them more aware of company's policies and objectives. 

Alpha Corporation also has various reward and recognition programs. Employees are recognized for the work that they do and leading performers are honored. 

3. What are the problems encountered by this organisation?

Alpha Corporation in its endeavor to be an open and non-hierarchical organisation and promote traditional values like culture of caring & harmony amongst its employees, firstly faces the challenge of retaining skilled, ambitious, enthusiastic, professional and career growth oriented employees who would like to move up the career ladder. Attrition is an issue in the organisation.

Also due to cultural issues, employees do not seem to strive to work hard or put in extra efforts in their work when it is required of them. They are used to fix working hours. Employees are used to work in a routine and do not wish to go beyond it.

Also due to non-professional and non-competitive work culture wherein employee performance is not reviewed regularly and feedback given, the company supports incompetent and unmotivated employees (deadwoods). This in turn affects and hampers the productivity of other employees. They in turn get demoralised, disconnected & disengaged with the organisation. One issue leads to another. The company though it sponsors festivals, celebrations and contests, only few regular & enthusiastic employees participate in it.

4. If you were the CEO of this organisation, how would you bring about a positive culture in the organisation

The culture at Alpha Corporation is in need of a revamp. And this can only happen when it's driven from the top, when it's leadership driven. 

The CEO must walk the talk in leading systematic performance improvement throughout Alpha Corporation. This can be done by carrying out many visible activities like setting goals, planning, recognizing & rewarding performance. A significant portion of the time of CEO has to be spent in performance improvement activities if a positive culture change has to be brought about.

Job definitions with performance targets must be clearly delineated for each level of the organisation, objectively measured, and presented in a logical and organised structure. Systems and procedures must be deployed that encourage cooperation and a cross functional approach to management, team activities, and problem solving. Actions must be taken to assist those employees that are not meeting their goals or performing to plan.

Promote the concept of cross-training and job rotation. Cross-training, job sharing, and rotational assignments promote a more engaged employee and makes that employee more valuable to the organisation.

Assessment of employee satisfaction & engagement. Although Alpha Corporation claims to have many employee engagement initiatives in place, a systematic process must be deployed to evaluate and improve the effectiveness and extent of employee satisfaction & engagement initiatives. Consistent and prompt action must be taken to improve conditions identified through these surveys.