Why You Need Culture Management

December 10, 2020
December 10, 2020 Maddie Grant

This article was written by Jamie Notter for Forbes.com – the original can be found here.

Financial management is a given in every organization. We expect that leaders will put processes, systems, and people in place to ensure that an organization’s finances are managed responsibly and ethically. It would be considered an unacceptable risk, in fact, for an organization to attempt to operate without a financial management system in place.

But according to economist Kevin Stiroh in Harvard Business Review, we could say the same thing about workplace culture. Stiroh is not only an economist but a bank supervisor for the Federal Reserve, so he knows a thing or two about financial management, risk and (unfortunately) misconduct. A number of financial institutions have been in hot water over the last several years (remember when Wells Fargo employees were creating thousands of fake accounts just to make their numbers?), and he’s one of the people who has to do something about it. Culture, it turns out, is a key piece. Stiroh argues that firms with a high level of “cultural capital” are less likely to suffer from employee misconduct.

Cultural capital refers to an alignment between, on one hand, what leaders say the culture is and what the underlying patterns of behavior and unspoken assumptions are on the other. When those are not aligned, cultural capital is low, and the risk for misconduct is higher. That’s because people realize that what leaders are spouting about things like “honesty” and “integrity” is just lip service — it’s not how things really happen.

And that sheds light on the true problem here: In too many organizations, workplace culture is treated as a branding or communications issue rather than a core management function. Leaders put culture on the agenda for a few months; they do their off-site, develop their list of core values and put them on posters and cards and hold a town hall to celebrate their cool culture.

That work is fine, but it is not nearly enough.

What we need here is a solid system of culture management (just like you have for financial management). In my book, The Non-Obvious Guide to Employee Engagement, I define that culture management is a system of people, processes and technologies that an organization uses to shape and change its workplace culture on an ongoing basis. That system is critical for building the level of cultural capital in your organization.

Here are some areas you probably need to work on when building the system:

Culture metrics: What are you doing to make sure you understand what your culture really is, down to its roots? Can you distinguish between your culture metrics and your engagement metrics (because they are two different things)? A good culture management system is clear and intentional about its metrics and focuses first on “what is” rather than on what is positive or negative. That part comes later.


Photo by Scott Graham on Unsplash