Over the past year, New Zealanders, along with the rest of the world, have had to seriously change the way they do business. From credit lines drying up, to mass employee redundancies, the shift from prosperous economy to one in state of so-called peril has left many organisations high and dry.
The role that organisational culture and leadership has played in the global meltdown, both here and internationally, is intriguing. Take, for example, the fall of some of the world’s largest financial institutions. Underpinned by an aggressive, ‘greed is good’ management mentality, these companies encouraged cutthroat culture which irresponsibly distributed credit to beat their competitors.
The result was an economic meltdown in the United States and subsequent domino impact on the rest of the world. It is not surprising if this sort of behaviour sounds familiar. Our research shows that the New Zealand business community is somewhat guilty of the same approach.
Our “Human Synergistics Transforming Leadership and Culture: State of the Nations” report reveals that nearly 50 percent of the 468 New Zealand organisations surveyed are characterised as aggressive, with short-term, ‘win at all costs’ mentalities.
Within these aggressive organisations, managers unwittingly play employees against each other in win-lose performance framework; encourage staff to put each other down to gain status; and, enforce no-tolerance approach to errors.
Managers in these workplaces also generally avoid the tough conversations and carry poor performance as an overhead, which in turn perpetuates low-achievement culture, with little or no feedback to promote improvement.
So what creates this kind of culture in our organisations? And how does this influence leaders’ ability to build resilience in the current economic climate?
The inextricable link between culture and leadership, and its ultimate impact on performance, is well documented. No matter what country you visit, company’s culture and the productivity of its people is significantly influenced by the actions and attitudes of the leader of that company. The New Zealand survey shows that over half of our leaders have negative impact on their staff, the organisational culture and, therefore, enterprise performance.
Leaders crush creativity by encouraging staff to treat rules as more important than ideas, they avoid blame or taking responsibility for mistakes, and they steer clear of ‘rocking the boat’. Then, in relation to how employees interact with each other, the cultural norms (as dictated by the leader) tell them to compete rather than cooperate, always please the boss and never admit faults.
On the other hand, our senior managers say they want people who strive for excellence, who enjoy their work, who help others grow and develop, acknowledge their own flaws and, most importantly, who maintain sense of personal integrity. Therefore, despite what leaders say and think, they don’t act in ways that create the workplaces they say they want.
Why this incongruity? Because our leaders often manage intuitively. New Zealand’s ‘anyone can do anything’ attitude tends to toss inexperienced employees in the deep end, leaving them to manage teams without first giving them the necessary training or skills.
As the economy dives, organisations that entered the crisis in weak cultural position – promoting aggressive behaviours – resort to the crudest motivator of all – fear. That means making poor performers redundant.
In post-redundancy workplace, remaining employees tend to be de-motivated, anxious and fearful. Panic infiltrates the workplace, leading to high staff turnover, high levels of rework, wasted effort and more stress.
Innovative cultures, in which people are encouraged to speak up, experiment and embrace possible failure, are flattened by directive management style which, in turn, erodes organisational resilience.
Redundancies shouldn’t be first on the list of cost-saving actions. Total human resource costs can be cut by 30 percent over 12 months by reducing stress, exciting people about their work, reducing time wasted surfing the net during work hours, fixing core function inefficiencies to reduce re-work and, lowering staff turnover by improving organisational culture.
It isn’t too late for New Zealand companies to right their cultural wrongs. They simply need to build more constructive, albeit disciplined, approaches to leadership, cultural management and doing business.
Managers should start by looking inward, becoming more self-aware of their own leadership style and determining how this style impacts the organisation’s culture.
New Zealand organisations are now in ‘do or die’ situation. The global events of the past year have changed the rules, and are demanding that we adapt. If New Zealand’s organisational leaders make serious effort to change, productivity will increase and their enterprises will become more resilient.
Shaun McCarthy is chairman of Human Synergistics New Zealand and Australia, organisational culture and leadership consultants.
