Whitepapers

A Critical Link Between Corporate Culture and Leadership Competencies

by Agota Alvarez
on 2016-09-22

"What is corporate culture? It’s a phrase that gets thrown around a lot in popular business literature, and it can be defined in the broadest sense as the manifestations that arise from an organization’s specific combination of mission, vision, and values.

Ideally, an executive group will define those philosophies with clarity, which will then permeate vertically throughout the leadership hierarchy and horizontally across teams, departments, and functional areas. When faced with making a business decision, managers and individual contributors should be expected to ask, “Which option best aligns with our mission, vision, and values?”

That’s the big picture, but on a day-to-day level, corporate culture is what we observe in the office. For example, what are the expected behaviors, norms, and informal rules? Is the atmosphere sedate and collegial or noisy and fast-paced? Are disagreements addressed indirectly, through channels, or are people expected to confront each other in a “tell it like it is” manner? Would management send you home if you failed to show up in formal business attire, or does your boss routinely sport T-shirts featuring popular comic-book characters?

We’ve no doubt all seen what happens when someone is hired into the wrong culture. Perhaps someone who prefers a strict hierarchical environment finds out after she accepts a supervisor role that employees are used to a casual open-door climate with a lot of autonomy. Or maybe a sales manager formerly working in a high-performing, results-focused culture finds himself smacking his forehead on the desk trying to lead a passive team of reps waiting for someone else to provide leads and hoping that referrals materialize.

If your company has a well-defined culture, clear goals, and the right leadership in place, you are likely on the leading edge of your industry. If you don’t, you may be sliding toward mediocrity, suffering from complacency, and inadvertently encouraging counterproductive work behaviors. Envisioning worst possible outcomes might not be in our nature, but eventually, you could be closing the front doors.

You may have the right mission and values but the wrong leadership mix to realize your objectives. Or you have good people but you need to shift the corporate culture to keep up with an evolving industry. Either way, Competency Modeling can be your ticket to the leading edge. Competency Modeling is often the critical component in defining desirable leadership qualities, improving cultural effectiveness, and raising employee engagement to new levels. And that’s just the beginning. The image below shows how Competency Models can be used throughout the entire talent-management lifecycle in order to maximize organizational effectiveness.

Competencies may be defined as a collection of skills, behaviors, and attributes. Imagine you work for a technology company with a culture of innovation. Your best leaders are likely to be those who are highly creative and willing to take risks. If your organization emphasizes operational excellence (an overnight-shipping service, for example), you might want to seek leadership competencies related to structure, time management, and business-systems planning.

On the other hand, if your company culture is about client relationships and consultative service, you could veer off course by developing or bringing in leaders with an aggressive “warrior” approach toward business. Sending mixed signals to employees and alienating long-standing customers simply to boost short-term revenue is a bad trade-off, especially if you lose your cultural identify because of it.

While there is certainly overlap between innovation, operational excellence, and client service, observing what people talk about, the actions they take, the business decisions they make, and what they are held accountable for should tell you about the prevailing values.

Once you understand the culture of your organization (or determine the direction in which you want to move the culture), the most powerful choice you can make is to create a Competency Model that identifies the desired behaviors of those who have the most impact on the culture: your leaders. Competency Models can also be created for Sales Representatives, Engineers, or any other role or group of roles that play a key part in a company’s success or failure.

It is important to note that different competencies may be important at different levels of an organization and that the same competencies might be expressed differently depending on your organizational level. So far we have talked about Executive Leaders, who are largely responsible for defining the culture and exemplifying the behaviors associated with achieving company goals. Supervisors and Mid-Level Managers may have to display another set of competencies or express similar competencies in ways unlike Executive Leadership.

Take the competency Driving Change, for example. Mid-Level Managers are often in a situation to recognize problems and identify needed changes. Senior Leadership is usually responsible for deciding to take action on those recommendations, and Supervisors typically roll out the resultant programs and initiatives and make sure Front Line employees comply. Imagine that an organization wants to improve its customer-service reputation. Senior Leaders will probably brainstorm ideas and think strategically about how to utilize new service technologies, but it is often up to Frontline Supervisors and Team Leaders to provide the hands-on training and deal with the details of implementation.

Although change is happening at all levels, different sets of motivations and strengths must show through at each level. The Competency Model helps to determine what those strengths and motivations are.

Building such a model for your organization does not require access to some mysterious, unexplainable power but merely the guidance of an experienced and reputable Management Consulting firm.

While the process may vary slightly depending on your needs and requirements, the basic steps for creating a Competency Model include:

  • Using valid psychometrics instruments and other data-assessment methods to perform a thorough Job Analysis of the position or positions for which a Competency Model will be built

  • Conducting focus groups, interviews, and, if possible, surveys with key stakeholders to identify the important knowledge, skills, abilities, or other characteristics that lead to success

  • Grouping the results into competencies, which provide a standard definition andbehavioral examples so that everyone who uses this model is speaking the same language

  • Mapping the competencies back to the psychometric instrument so that future applicants can be measured against the Competency Model

When a Competency Model is integrated into the talent-management system, you can effectively integrate people with culture. You can also clarify your message to develop consistent goals, reduce ambiguity, and put aside biases to objectively assess people. Once you know what competencies it takes to be successful in a given position, you can also build a Structured Interview Guide, accelerate the onboarding process, create focused orientation plans, identify areas of development for career pathing, remove inconsistencies from performance appraisals, and let your team members know exactly what qualities are needed to succeed.

With a comprehensive Competency Model, you can:

  • Foster a feeling of connectedness with company goals, strategy, and values

  • Integrate strategy and values into your culture

  • Select and develop human capital that is aligned with strategy and values

  • Engage your workforce with clarity of purpose

However, even the best Competency Model is meaningless if not championed and supported by your leaders. The executive team must not only promote the model but also demonstrate the competencies; otherwise, the next level of leaders down will not be able to effect culture change either. It’s up to everyone to walk the talk and set a good example while also making practical use of the model through formal talent-management processes such as performance appraisals. In other words, to fulfill the promise of the investment requires an enterprise-wide follow-through as well as a commitment to making Competency Modelling an integral part of your culture.