Is your culture sustainable? To answer this question, we first must define culture. Ask one hundred business owners how they define a good culture, and you will get 90 + different answers based on their individual experiences. We have been HR and Business Advisory Consultants at the wattsnext Group for 15 years and one thing that has never been more difficult to define is ‘culture’. Everyone understands the importance of a ‘good culture’ in retaining key employees, and its commercial flow on to productivity, efficiency, and output. But, without defining it, you can’t measure it or deliberately set out to improve it.

‘Culture is what motivates and retains talented employees’

Betty Thompson

Out of necessity, the world has undertaken a two-year experiment with flexible work arrangements and hybrid workplaces. Based on my recent visits to the global business epicentres of Sydney, Chicago, and New York and seeing first-hand the difference in foot traffic I suggest flexible and hybrid work environments are the new normal. Our clients in both hemispheres agree, meaning defining and improving culture must be a priority to attract and retain the best talent.

Working from home

At the risk of simplifying what is a complicated and evolving definition, based on our experience here is my attempt at not only defining and measuring but sustaining culture in the newly defined business landscape.

‘We estimate that 85% of our clients come to us wanting to improve their culture and employee’s performance’

Ben Watts, Chief Executive Officer of the wattsnext Group

Surface vs Sustainable Culture

Surface Culture is visible, it’s easy to understand and plays a role in all business cultures. The remuneration, the bonus, the car, the gifts, the lunches, the funky office, the uniforms or casual attire, the training, and the fancy workstation. Everything from flexibility to Friday night drinks sits in what I call a company’s surface culture. We must continue to do and evolve these components of our surface cultures or risk them losing their shine and becoming an expectation.

Sustainable Culture

Sustainable Culture is not as visible and certainly not as sexy as its more popular sibling, it is about accountability and consistency and guides people managers on how to manage and improve the performance of their people. It is about longevity and continual improvement, and we have defined it as what we call the three pillars of a Sustainable Culture:

Pillar One: HR Strategy (HRS):

  1. Vision, Mission & Values 
  2. Functional Structure
  3. Clearly defined outcome-focused roles 
  4. Anonymous Survey

Pillar Two: Employee Performance Framework (EPF)

  1. Onboarding framework
  2. One-on-one meetings 
  3. Probation framework 
  4. Performance review framework

Pillar Three: Management Action (MA)

  1. Timely 
  2. Consistent 
  3. Notes/file 
  4. Follow-up

Each pillar is equally important and together equates to a Sustainable Culture. 

Sustainable Equation

Each component of the strategic pillar (HRS) must link to the next and the anonymous survey is critical to uncovering any management blind spots.

Pillar One – HR Strategy (HRS) 

  • The Vision provides aspirational business direction.
  • The Mission or purpose is the why, the emotive and bigger impact on the world, critical to the younger generations that want to be involved with a greater purpose.
  • The Values are the non-negotiable behaviours that we want to be good at, the internal non-negotiables we use as management tools and to guide decision making.
  • Organisational Structure should be defined by function and not hierarchy, a forward-focused succession planning and growth too, making it crystal clear who is accountable for what and career paths obvious.
  • Outcome focused roles are designed and built within the functional structure like they are brand new, each role with clear and measurable outcomes and designed without the incumbent employee’s skills in mind. Outcome focused roles are never built around individuals’ skills, but rather stay with the functional structure as employees come and go from the business. A dynamic document to recruit against, show what a successful day looks like and measure individual performance.
Celebrating wins

Pillar Two – Employee Performance Framework (EPF) 

The EPF underpins a Sustainable Culture by making both managers and employees equally accountable.

The Onboarding component is to be identical for all new employees regardless of the circumstances, giving everyone a fast start and the same foundation to grow. The following three components are small and regular feedback loops (in their own right) and together they link to provide a best practice communication and performance framework, critical to continual individual improvement and team performance.

Managers speaking with employees regularly do not constitute a One-on-one meeting; these are two way formal, agenda-driven conversations conducted at least fortnightly.

The most underutilised HR framework is Probation, it should include at least three mini-performance reviews, part of a process where new employees are managed up or out before the period expires. Regular One-on-one and multiple Probation meetings are part of a performance ecosystem, allowing for the formal Performance reviews to be positive, proactive, and forward-focused.

Conducting Performance reviews is an art and they need to occur at least twice a year. It wouldn’t be fair for a sporting coach to provide player feedback on game 3, once a year at the end of the season…..that is why a well-designed EPF is essential to a high-performance culture!

Management Framework

Pillar Three – Management Action (MA)

Is an expectation of how a manager should act when poor employee behaviour is experienced, pillar three (MA) is reactive. When there is an employment contract, policy, values, or poor behaviour management action must be timely (usually fast) and consistent regardless of who is involved or who the direct manager is. Also, regardless of who the employee is, too often we see long term loyal or high performers being treated differently to more junior employees and this can instantly erode all the great culture work you have invested in. All disciplinary actions large and small should be noted in writing and filed the same way by all managers to protect the business. All employees should have the expectations explained, their ongoing behaviour monitored and always followed up to close the loop. The key to the MA pillar is for all managers to treat all poor behaviour with the same methodology (timely, consistent, noted/filed & followed up), regardless of the severity of the incident or seniority or level of employee. 

Give your business a Sustainable Culture self-audit out of 12, and equally, rate the components under each of the pillars. Based on our experience a score of 10 or above is good, but if like most of us you score 9 or below you have a HR plan blueprint for the immediate future. 

Managing people is difficult and the flexible and hybrid expectations of our employees add further complexity. Accountability and consistency have never been more important in the workplace (whatever form your workplace takes). Everyone should be comfortable that they are treated, managed, and can give and receive feedback the same way. Managers should be educated and provided the tools to be successful and business owners and executives are comfortable that their employees are engaged and, in an environment, where they can grow. 

The modern business owner has never been through a more challenging two-year period and if anything, I believe fear has meant current retention numbers are not a good indication of a good culture. As business owners and executives, we need to assess our culture as a priority. Is your Surface Culture evolving?

Now we can define a Sustainable Culture, you can measure it!

Work with your Executives and HR professionals to ‘self-audit’ your Sustainable Culture using our equation (HRS) + (EPF) + (MA) = (SC) because attracting, retaining, managing, and continuing to develop the best talent in your business depends on it!

Author: Ben Watts

Author: Ben Watts
Ben is a veteran in the HR space- a forward-thinking leader specialising in functional business structures and people performance techniques. With twenty years’ experience managing large ASX listed corporates across multiple industries, Ben adds depth and expertise to our clients' strategy solutions, genuinely providing a commercial result for their investment.