Vlatka Hlupic urges a culture change for the 21st century organisation

For years, training and development professionals have debated the big issues that they confront: what is training for? How do we select and develop programmes? How do we know which are the most effective? Some of the latest findings on organisational development promise to inform, perhaps even revolutionise, our thinking.

Above all, the latest research opens up the possibility to broaden the discussion away from the familiar tussle between finance and HR. For example, there has been much discussion over the years on whether one can, or should, assess a financial return on training investment. The debate is evenly balanced. While there is an obvious need to help the business and avoid waste, some training initiatives have objectives that are long-term and difficult to quantify, such as maintaining corporate culture or assisting the management of risk.

The case for gauging a return on training investment can be inadvertently weakened by assuming that a precise monetary figure can, or should, be determined over a prescribed timescale. Determining the ROI can be a good idea but one that can be couched too much in terms that are determined by accountancy timescales, rather than the needs of the organisation. Business partners from the human resources department often have to work hard to blend the cultures of finance and HR: ensure that there is financial accountability without tying the hands of learning and development professionals too much by a pedantic cost-benefit calculation for every move that they make.

But if there is a requirement for the business partners to bind the HR strategy and the business strategy together, this begs a bigger question: how did they come to be separate?

Much of the latest research supports a more joined-up approach to the development of all people-related investments, linked closely with business strategy and operations. Findings raise fundamental questions over key aspects of the 20th century corporation, with its specialist departments or ‘silos’, and supports a more co-operative culture where accountability is to the customer, rather than functional head. In this new paradigm, it is taken for granted that corporate culture and employee engagement are always of great importance; that learning and innovation are continual, and that communication is strong, enabling intelligent feedback on the effectiveness of all initiatives – training-related or otherwise.

This new business model, based on many years of research on organisational development, takes organisational culture and skills seriously all the time, not just when the employee survey results are in. It replaces a passive, inert concept of an organisation consisting of assets, resources and a cost base, with a dynamic one consisting of teams and engaged people. It summarises not just the rationale for better engagement of people across the enterprise but how to go about this in practice.

The findings support the view that it helps to take a holistic approach and to address mind-set and values, as well as the organisational set-up. It is a shift:

1. From a controlling mind-set to an empowering one
2. From setting rules to establishing principles
3. From issuing instructions to creating teams
4. From overseeing transactions to building alliances
5. From a focus on short-term profits to serving all stakeholders.

This helps counter the dysfunctions that can arise in an organisation overly segregated into silos, in which training and development is seen as something only for the training specialists to worry about. Instead we become, in line with Peter Senge’s vision, a learning organisation, continually receiving feedback and intelligence from customers and each other.

The most effective companies raise performance and engagement across the whole organisation, in many dimensions, unleashing the potential of all the people employed. And the bigger lesson is that business strategy and operations; and people development and engagement have to be considered together.

There are immense implications for the learning and development profession. Having high engagement scores and well-regarded training programmes may feel satisfying but is the engagement well directed? Is a major training investment really helping the business meet the needs of the customers, or identify and attract new ones? Has it been assessed against alternative investments?

In terms of practical application, the approach overseen in many applications applies respectively to an individual shift and an organisational shift towards this joined-up way of managing.

The model has five levels of operation, for both individuals, executive teams and organisations – from the apathetic individual/lifeless institution at Level 1, to the limitless/unbounded high performance of Level 5 (see below). There is a particularly significant transformation from Level 3 – the ordered command and control approach that is common in many corporations – to Level 4, where high engagement begins to be felt, with its multiple benefits for service, innovation and efficiency.

The organisational shift is further bolstered by an approach called the 6 Box Leadership Model and its online diagnostic tool, which emphasises the inter-relatedness of organisational activities. My research and work with employers has resulted in identifying six key groups of factors (that drive value creation, innovation, engagement as well as profit) which form this model. Three of the dimensions relate to people: culture, relationships and individuals and three are related to processes and materials: strategy, systems and resources (see below).

In-depth questionnaire-based information creates a series of categorised scores and the two approaches are used together, so rankings can be obtained to determine the level of operation of individuals and different parts of the organisation and across the six different dimensions of the organisation defined. The questionnaires are based on a six-point Likert scale, which eliminates the neutral option. The software allows also for qualitative comments, which helps to elucidate the why of a quantitative score indicating operation at a particular level.

Taken together, these approaches result in an organisation’s leaders being able to access continuous intelligence on the performance, capability and potential of the entire workforce, and the extent to which it is achieving its aims. It is a whole level beyond the traditional snapshot of an employee survey, both in terms of detail, and in terms of the dimensions addressed – looking at relationships, strategy and wider performance, not just the degree of commitment and enthusiasm of individuals. It can be particularly valuable when scores are assessed against time to see not just if there are improvements but which of the six dimensions are changing and why.

In this way, the 6 box leadership model reduces the guesswork in managerial investments and other decisions generally. Instead of relying on a combination of hearsay, financial data and employee opinion, one has access to richer organisational intelligence, giving information on the internal dynamics and how they change over time.

For learning and development specialists, a whole new array of organisational information becomes available to help one assess, for example, the impact of a major managerial development initiative. Employers that have used it have found it to be a powerful generator of value and innovation.

In the example of a City of London insurance company, scores from the 6 box leadership analysis were used to reform induction and training programmes, tailored to the specific needs of the firm. It is a medium-sized underwriting agency, relatively young for the City. All employees were invited to complete the questionnaires and the completion rate was 100 per cent.

The headline figures were reassuring: the employees reported a good level of engagement and performance across the six dimensions. Delving into the results a little further, however, revealed some areas to address. For example, senior managers rated the organisation more highly than other staff – this is a common finding when using this approach. Also, the dimension of culture scored lower than others at 62 per cent – respectable but leaving room for improvement. And within culture, some scores were much higher than others. What emerged was a high-performance climate, with some emerging issues around stress and potential burn-out. Social responsibility scores were low.

Qualitative information – comments in the questionnaire – yielded clear requests for stronger induction for all employees – as well as training and development in different areas, including for more tailored courses relating to specialist aspects of underwriting. This led directly to the following actions:

• Named individual to lead the underwriting manuals project
• Individual to lead a new on-boarding project for new joiners
• Individual to launch the effective broker communications course
• Group of individuals to build a suite of relevant and tailored courses
• Programme of refresher courses for key products.

Initial feedback showed that some benefits started to emerge soon after, and that a more people-focused culture was developing. The managing director observed:

“The [survey] was very easy to administer and came up with some very interesting findings. Perhaps most importantly, it provided the impetus for us to apply renewed vigour to the training and personal development of all staff, and as a consequence we are now rewriting our training policy, making it far more employee-friendly, putting the onus on managers, mandating more training, and providing far more tailored courses.”

Spreading the word

Given the logic, and evidence base, for a move towards the empowered ‘Level 4/5’ organisation on the model, why is such a wholehearted commitment to an empowering leadership style not more common? One likely explanation is that it can be very challenging. It is common to seek progress only at an individual level, or only within some of the six dimensions. So organisations might seek to develop a few individual leaders’ capabilities with their own team but pay little attention to the wider culture, say, or induction of new recruits. Or there can be a move away from a ‘command and control’ structure, but not a ‘command and control’ mindset.

And there is a wider issue. Organisations do not exist in a societal vacuum. It is difficult to transform the culture of a single organisation when the wider culture influencing how businesses are perceived and reported on remains stuck in Level 3 (at best) – although the best employers like WL Gore and Morning Star have consistently managed to do this.

To support a wider shift, I am seeking to join with other academics, leading management organisations and business schools to encourage dissemination of the research findings and innovative ideas surrounding the whole agenda of enlightened leadership and the learning organisation.

If training professionals sometimes feel frustrated that their efforts are not better appreciated, it may be that the source of the frustration lies in the wider organisational or even societal culture. There is now a body of thought leaders wishing to confront that challenge and a vast store of evidence to call upon.