What is that elusive thing we call ‘culture’?

In the first of a series of articles exploring company culture, the EIC’s Alan Mullett discusses the importance of leadership in embedding effective and enduring cultural change.

Barely a day passes in the utility sector without the word “culture” being mentioned in conversation or media commentary.

Safety culture, customer service culture, innovation culture, net zero culture. Even dire warnings from Unipart Group chief executive, John Neill at Utility Week Live that, “culture change is fundamental to meeting the challenges facing the utilities industry.” Challenges such as tougher price controls, digitisation, net zero, and how we must develop our cultures to meet those challenges head on.

Over the next three articles we shall be exploring culture, it is a broad subject. We will look at what culture is and why we need to pay urgent attention to it. We will then walk through the practical steps we can take to change it.

These articles are published at a time where cultural leadership has never been more important.  Over the last six years in conjunction with others, I have been designing, testing, and refining a pioneering cultural transition programme in the utility sector. We have learnt much about utility sector culture and the dos and don’ts of creating effective and enduring cultural change. Some of the highlights will resonate with those leaders trying to take the bold steps required to effect cultural change and make their companies fit for future purpose.

What is culture?

We need to be able to define something before we can change it. We cannot manage or change culture without defining what it means to us in the utility sector.

It seems ‘culture’ can be everything from bacteria on a petri dish, to a work of art. Socially it can mean the beliefs, values and behaviours that define the identity and the rights and rituals of a group. Some cultures have endured for millennia others have quickly withered and perished.  Culture is not static, especially in our fast-changing sector. We need to continually adapt our cultures if we are to remain relevant.

We found that if you strip away the theory and look at the day-to-day reality, an organisation’s culture can be distilled down to one simple eye-opening and challenging concept. Culture is defined by what leaders think, say and do, day in and day out.

This means that mission, values, and vision statements of an organisation are just nice words on a wall unless they are embodied in the behaviours of its leaders. If a leader is self-interested, capricious, and untrustworthy, it creates a low trust culture that increases costs and decreases speed. If a leader instils an environment of fear, you will have an anxious blame culture that dulls innovation. You will get quick wins, but rarely sustainable success.

If leaders are open, consistent and care about the company and those that work there, if they have personal integrity and are committed to always acting in the best interests of all stakeholders, if they are straight, firm and fair to all then you will have a high trust culture with sector leading levels of productivity and wellbeing. This culture will be enduring where safety improves and customer and employee satisfaction scores show a strong upward trend, where innovation increases and CO2 decreases, and shareholders enjoy sector leading returns.

Why what leaders, say, think and do is so important

Whether you are the CEO or a site manager, those who are led perceive that their leaders to have a greater control over their lives. That their leaders have the power to affect the quality of their lives, more than most other people. That they have more control over their sustainability of employment, their ability to pay their mortgage and to provide and care for their loved ones. And have a greater impact on their health and wellbeing.

Copious research shows that people tend to mimic and adopt the behaviours of those that lead them to seek approval, acceptance, and security. It is called behavioural contagion.

If you accept this definition of culture, then it is not rocket science to know that to evolve or to change a culture you need to evolve or change the behaviours of those that lead.

But we are in danger of jumping ahead of ourselves. There are a few principles that need to be embraced before you embark on any cultural change, and we will cover those in the next article.