Who really matters?

The majority of companies and their leadership teams, obsess about the perceptions of external stakeholders to the detriment of their key internal audience, employees according to our latest report, “The Missing Link”, backed up (and observed) by no shortage of anecdotal evidence.

Employees have tended to lag behind other audiences in the overall stakeholder hierarchy, although the situation is changing, and culture is now beginning, belatedly, to feature on Board agendas, not least because of external pressure from the Financial Reporting Council, the asset management industry and others.

Our research shows, few companies, other than those led by genuinely enlightened CEOs that ‘get it’, have a conscious strategy to shape and manage their culture, one comparable to the strategy and programme they want in place to help shape the external environment in which they operate.

Other studies confirm this. Deloitte, in its Global Human Capital Trends report, identifies culture as one of the most important business topics, with 82% of survey respondents believing that “culture is a potential competitive advantage”. And yet (tellingly):

·         Only 28% of respondents believe they understand their culture well, and

·         Only 19% believe they have the “right culture”.

This extends to their approach to communications. Leaders, be they in corporate functions or business divisions, know they need to communicate with their employees, and internal communications roles have proliferated over recent years to reflect this demand. But, in many cases, they rarely have a strategic component to them, and they frequently command lower compensation packages than their external communications/affairs counterparts. The inference is that they are either less business critical or perceived to be less complex and strategic. Quite the opposite, in fact. But it is further evidence of the fact that culture, engagement and the employer brand are not agonised over to the degree that external reputation and brand are. Culture is not yet even eating the external environment for breakfast, never mind strategy.

Criticaleye, the peer-to-peer Board Community for CEOs and senior executives, took a poll at its recent HR Director retreat, which revealed that 58% of HRDs don’t believe they have the right leadership capability within their organisation to execute culture change. Would they say the same about their leadership capability to execute external reputation change? Probably not. 

In the report we argue that the investment in the analytics/research, strategic thinking and creativity that helps business leaders to better understand and influence external stakeholders should be replicated internally. Culture, employee engagement and employee experience (as opposed to customer experience) all require similar levels of analysis, strategic insight and creativity.

It is beginning to change and culture/brand/purpose are beginning to get its place on the Board and Executive Committee agendas, but this change is not as widespread as it should be, and is sometimes approached with tick box mentality.

The executive summary of “The Missing Link”, is now available (please respond if you would like a copy) and we will be blogging about key insights over coming weeks.

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