I believe in the power of a positive, high-performance culture, which begins with strong ethical values at the core. When I was at Aetna, we worked to create the culture and values with input from our then ~40,000 employees. We felt having employee insights early and often in the process was critical to our long-term success.
Your corporate culture: is it what you think it is?
I was at Aetna during a time of massive change. We were losing $1 million per day on average, and rapidly losing the confidence of members, customers, brokers and investors. Doctors were furious with us. We had also lost the support of our employees. We soon learned that they were demoralized and beaten down because of the poor performance of the company, the strained relationships with our constituents and the constant negativity in the media. Many of our employees were embarrassed to work for Aetna. We could not be successful in rebuilding the company without employees who were engaged and committed to the company’s success. Employees were our most important assets on our path to rebuilding. My job, and the job of the entire leadership team, was to re-engage the employees. Part of that came from working to fix the company so that we could see performance improvements. But we also needed to understand what led to this dysfunctional state.
We began a series of activities to communicate with employees, including educating them on the reality of our business and its substantial challenges. We also asked for their input. Working with an outside firm, we developed a survey that was distributed to the entire employee population. And we found that our employees had a lot to say. The first year we conducted the voluntary survey we achieved close to a 90% response rate. We also talked to our employees through focus groups and we took what they told us and created company values, which reflected the beliefs of employees at all levels of the company. We reinforced the legitimacy of the values by using them every single day, but also by incorporating survey action items within our business plans each year. Over time, our management team members were held accountable for improvement on survey action items, and their compensation was tied to their performance related to these survey action items.
We probed a number of areas in the survey, but as just one example, we asked whether employees believed that the company was acting in accordance with its values, and whether in fact their own department and their own leader was. We placed a high value on leadership capability, and for performance evaluations of leaders, it was weighted as important as their business results.
The surveys, among other programs, became a regular part of how we communicated about culture and values, as well as a marker for how and whether our employees felt the same as we did about our culture.
Setting the right tone at the top is key. Consistency makes it work.
Much of a leader’s responsibility in creating a positive high-performance culture is setting the right tone, and acting on it consistently. That day-to-day execution – the tenor and tone – really makes the difference. With one deviation – one exasperating meeting – the CEO can legitimize bad behavior.
Another critical element in setting the tone is handling performance management. However the CEO models and communicates his or her expectations is how people will be held accountable. When conducting a business review in a setting with other executives watching, if results clearly committed to were not achieved, how does the CEO react and respond?
Understanding the role of the Board in leading from the top.
Since the responsibility for fostering a positive high-performance culture is the CEO’s, that creates a critical responsibility for the Board: to identify a CEO candidate with the right skills, values, and “touch,” and to work with the incumbent to make sure that all those qualities are appropriately deployed. Directors should be mindful of the elements of CEO performance that bear on culture.
The challenge for the Board is that Directors do not spend time with the executive in a routine operating environment – it’s not their job. Yet they must figure out whether the CEO is behaving consistently with the company’s values and its espoused culture, and whether he or she is doing so consistently.
In my experience, there are a few ways for the Board to develop those necessary insights. One is through interaction with other senior leaders rather than solely with the CEO. A second, and in my mind critical element is getting access to metrics. A well-conceived and well-constructed employee survey can be extremely valuable. It can open a window on employees’ cultural and emotional health, and reveal their perspective on the values of the organization. The survey allows Directors to determine whether what they think they see in the CEO and leadership team matches what the organization is experiencing. There may be times for the Board to act on this information – whether by articulating goals, making clear demands, or making a change, to ensure the long-term success of the enterprise.
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