How Leaders Influence Culture – Part 2; Rewards, Promotions, and Measurements

In this blog post we continue discussing how leaders can influence their culture.

Rewards

Rewarding what you want to see is one of the more common ways a leader can influence culture.  Review your policies for awards, bonuses, and promotions.  Are these policies consistent with your strategy or are they based on old business models that are no longer applicable to your business.  If not, change them to align with your goals and objectives.   This is applicable to any organization.

In a prior leadership role my department needed significant process improvement in most functions.  The reward systems that were currently in place did not emphasize this need.  The first significant change was to implement a bonus system that rewarded process improvement in which all staff members could participate.  All other reward systems were suspended.  At first, the culture reacted negatively to this change.  However, as staff were empowered to improve their job experience by fixing problematic processes and receive awards for these improvements, the culture began to change.  These changes were reinforced with cultural conversations that highlighted the positive aspects of this change.  The results were phenomenal.

Promotions

It is also important for significant leadership positions to be filled internally whenever possible.  As we’ve discussed in prior posts, a leader is responsible for developing future leaders.  Along with managing culture, it is one of leadership’s most important tasks.  If leadership positions are filled externally it is often, though not always, an admission of failure in leadership development.  It sends a message to the rest of the culture that your future here is limited; if you want to be promoted, seek employment elsewhere. Hiring externally may be necessary if your organization is in crisis, but under normal circumstances hiring from within sends a strong positive reinforcement message to the culture.  Additionally, internal selectees have a significant advantage over external candidates – they know how to be effective in your culture.  Adjusting to a new culture in a leadership position can be a lengthy process with no guarantee of success.

Measurements

Culture focuses on what its leaders measure.  If you need the culture to elevate the importance of certain results, begin measuring as well as rewarding those results. Financial measures are not enough.  Today, most organizations use Balanced Scorecards.  These scorecards contain different sets of metrics that measure the elements of culture.  For example, if the culture values work life balance, metrics that track usage of telework and alternate work schedules reinforces the message to staff that participating in these programs are culturally important.

Next week we will continue this discussion on how leaders influence culture with a discussion on operating mechanisms.

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