A values-based approach to creating organisational cultural resilience
If there is one thing that companies are learning in the current economic crisis, it is the importance of resilience — the ability of an organisation to withstand shocks and remain sustainable under prolonged periods of duress.
The most resilient companies display the following characteristics:
- A high level of staff engagement
- A low level of cultural entropy
- A vision of the future shared by all employees
- A set of values shared by all employees
- A focus on adaptability and innovation
Not only do these qualities create resilience, they also lead to internal cohesion, a key component in building a strong internal community that can drive the goals and performance of the organisation. The current crisis shows us that organisations that are strong on the inside also are strong on the outside.
Being strong on the inside means having a values-driven culture, a highly aligned, cohesive and effective leadership team, a low level of cultural entropy, and a high level of staff engagement.
Cultural entropy is the degree of dysfunction in an organisation. It is the amount of energy unavailable for useful work. Cultural entropy arises from the presence of limiting values such as bureaucracy, internal competition, blame, short-term focus, firefighting, etc. Research by Richard Barrett– Co-Founder of the Values Centre and author of Building a Values-Driven Organisation. A Whole System Approach to Cultural Transformation shows that low levels of cultural entropy are accompanied by high levels of financial performance and high staff engagement. Companies with these attributes are able to grow their incomes three times faster than companies with high entropy.
Checklist for building resilience
The following checklist of actions will help you to build your company’s resilience, support you in traversing the economic downturn, and place you in a strong position for success when normalcy returns. This checklist is based on the core principles of the Barrett Model. Each of the seven items on the checklist represents a critical step in building a full-spectrum, sustainable organisation.
Step 1: Focus on building financial stability: Build up your cash reserves. Seek ways to stay financially sustainable.
Step 2: Communicate with staff and customers: Confidence is important. Ensure everyone knows what you are doing to get through this crisis.
Step 3: Focus on your core business: Get lean. Streamline your systems and process to reduce costs and increase agility.
Step 4: Learn to adapt to a changing environment: Work on reducing cultural entropy and building innovation.
Step 5: Get clear on your direction: Re-energize your vision, mission and values to build internal cohesion.
Step 6: Build strategic alliances: Align with your customers and suppliers to create mutually supportive, beneficial relationships.
Step 7: Keep the long-term in mind: Ensure your short-term plans do not compromise your long-term viability.
Building a Values-Driven Organisation
Deborah Moyle is an accredited CTT practitioner, delivering workshops and ongoing interventions which help establish and build values-driven organisations.
Richard Barrett, Founder and Chairman of Barrett Values Centre, is an internationally recognized author of Building a Values-Driven Organisation: A Whole System Approach to Cultural Transformation, consultant and keynote speaker who works with CEOs and senior executives around the world to build vision-guided, values-driven organisations that excel in financial performance, cultural capital and sustainable development.
Barrett is creator of the Cultural Transformation Tools (CTT) which have supported the transformational journeys of more than 1,000 organisations in 50 countries, including Pfizer, L'Oreal, Kraft, McKinsey and Company, Ernst & Young, Price-Waterhouse, KPMG, Siemens, Johnson & Johnson, Motorola, Volvo, Ford, ANZ Bank, Barclays Capital and ING Bank.
Barrett is a Fellow of the World Business Academy and Former Values Coordinator at the World Bank.
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Acknowledgement to Richard Barrett for copy.