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CAHRS Working Group Driving Culture Change Hosted by Redmond, WA | October 5, 2017

Key Takeaways: 1. Top Leader ownership and advocacy of the culture change is crical; but you

need many leaders on board to really embed change in the organizaon. Participating

Organizations: 2. Culture change is hard but sustaining the change is even harder.

3M 3. The HR funcon needs to behave differently to support culture change. Amazon Boeing Cornell University Overview Expedia Ford Culture is an important part of engaging employees in organizaons and driving General Electric business performance. For many companies, the ulmate aspiraon is to create a JPMorgan Chase culture where every employee can do their best work and to do this work in an Mastercard environment where there are clear norms for expected behaviors and acons. Microsoft However, effecvely shiing culture to this aspiraonal state with today’s diverse workforce, rapidly changing technology and other disrupve forces in the business is Terex a bigger challenge than ever. During this working group, the organizaons present Workday explored how culture is impacng the workplace, what CAHRS member companies are doing to keep pace in this environment and what strategies they employ to successfully embed culture. The 10 Things We’ve Learned About Culture —Kathleen Hogan, Chief People Officer, Microso

1. Honor your past; define your future 2. Net it out: Simple yet strategic 3. You can’t fake it 4. Have a purpose‐driven mission 5. Make symbolic changes big and small 6. Make it who you are 7. Communicate, communicate, communicate 8. Let technology accelerate the change 9. All oars in the water 10. Stay humble, stay the course

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Group Discussion Themes

Following Kathleen Hogan’s interacon with the group (based on her LinkedIn arcle), the parcipants had a robust discussion that focused on a few important themes:

Idenfying the need to change culture In the past, finding the burning plaorm as to why a culture needs to change was difficult. Today, some companies are finding this easier given the pace of change in the world, increased compeon and the demands of a mulgeneraonal workforce. When top leadership changes, this can also create an opportunity, as that leader’s values may be different from the prior leader’s and warrant a reason to relook at culture. It’s as important to figure out what should be retained in the current culture or what may have been lost and needs to be brought back as it is to know what you want to change going forward.

Importance of the CEO/Top Leader A crical part of successful culture change is having the top leader (CEO) as an architect and advocate of the need for culture change. This needs to be authenc to the leader and align with his or her values; however, the culture can’t be so unique to the leader that it can’t be sustained beyond that one person and over me. For culture to be clear and impact the broader workforce, cultural advocacy needs to move down through the leadership levels of the organizaon to have a chance at embedding and sustaining.

Secrets to a great culture 1. Several companies noted that the secret to spreading your culture is to keep it simple. This is much harder to do than you would think but the simpler it is, the more memorable it will be for employees. Many companies try to be sophiscated, or try to include too many things. 2. Next, to sustain it, make sure you align your support mechanisms in the enre employee life cycle (from interviewing to assessment, performance to rewards, and in leadership development) to guide the behaviors and reinforce them. 3. Another secret is don’t flinch; when outside pressures from the business or bad press start to come as they inevitably will, stay the course. In fact, at one company, the leader looked at negave publicity as a gi that gave them air cover to build the foundaon of the company differently. This kind of leadership is crical to implemenng and sustaining change. 4. It’s also important to have employees focus on the bigger picture and not themselves – this is a watch out for HR, as many HR programs and processes focus on the individual.

Tradional HR culture can be a negave in the culture change process HR has tradionally been a slow and deliberate funcon and has added complexity that results in bureaucracy. HR needs to change its own behaviors to give up control, get beer faster and involve the voice of the employee. HR should also realize that it’s not about how HR sees things but how the employee/user receives it. How it shows up to them might not be as HR intends. One company noted that HR was having a hard me with one parcular aspect of culture change that was becoming more agile, quicker to launch things that weren’t necessarily perfect, and using employees (users) to iterate. They began “product reviews” for HR programs/processes and that really helped them see the employees as customers and get on board with the change.

Middle managers/line leaders as instruments of culture change HR knows it takes more than just the CEO or HR leaders to embed and sustain culture change. Middle managers are the key to success. One company felt that teaching all levels of managers to start every discussion with “Why?” was crical to success. Quesons like “Why are we taking this approach?” and “Why is this important?“ were a crical CAHRS Working Group Page 3 Driving Culture Change | October 5, 2017 Center for Advanced Human Resource Studies Connect | Educate | Achieve

first step in having people understand their purpose — and achieving it and helps lead to a higher level of engagement.

Another company menoned a focus on shiing from the past mindset of “managers” to “people leaders.” Part of this change is to emphasize the importance of developing employees, coaching, etc.

Several companies menoned that it is important to make mistakes public and see how leaders respond. It’s important for a company to have “grit” and sck with the change. Companies and leaders can’t move on too quickly to things won’t take hold.

There was also consensus that frameworks aren’t as effecve anymore. Sets of principles are beer. These are more flexible and allow the space needed for texture and color of the culture to emerge over me. Companies use symbols and storytelling to showcase the change they espouse. Similarly, staying firm to the vision and flexible with the ap‐ proach allows for variaon across employee groups for effecveness.

Social Media and Influencers Several companies are using social media analycs to figure out who the real influencers are. This isn’t about who is where on the org chart, but who may have bigger networks to be influencers. Companies are looking for the “contagion effect” ulizing design thinking for social influencers to pull out to their networks. Another company is pulling innovators into the execuon part of the organizaon to help them think about this differently.

Role of HR in driving culture change The group agreed that managers are willing to own culture but HR needs to help shape and evolve it. HR can also play a key role in sustaining it by helping managers to communicate. Some of the ways HR did that were to:  Encourage managers to get out and walk around and do skip‐level meengs (Gemba Walk);  Use “Town Hall” like meengs and social technology to get the message out;  Schedule 1:1 quarterly conversaons that highlight culture and people impact;  Create examples of what values/culture looks like by career stage and have an impact playbook by funcon; and  Make culture measures a part of key leader (CEO/direct reports) compensaon. Make it transparent to others in the organizaon that this is happening.

Using Analycs to Assess State & Culture Companies are beginning to go beyond the historical annual culture survey for more frequent and impacul data and using it for more than just development:  In some companies, the evaluaon is mainly subjecve but based on data (360 feedback, diversity results, etc.).  One company was very data driven on the “how.” They had moved from an annual culture survey to daily quesons that allowed them to see problems arising earlier and to intervene faster. Depending on answers to the queson, an algorithm dictates the next day’s queson to probe into problem areas more deeply.  Another company is also using the data from more frequent surveys to target learning and development needs. Based on the results, learning and development (L&D) sends out appropriate training modules a manager may need, suggest mentors, etc. They also used the data to recognize the top 10% leaders publicly. For those needing to build skills, they use micro‐coaching for six months. If they don’t improve, the person may move to an individual contributor role or out of the organizaon.  One company is using cultural and technical assessments designed by industrial psychologists instead of interviews for some job families to eliminate human bias. Applicants can receive a job offer based on the assessment results and then come for a job preview to make sure there is a fit. Early data is showing that this is working as far as retenon, quality of job, etc.  One company looks at culture rang as well as performance and potenal in selecon. CAHRS Working Group Page 4 Driving Culture Change | October 5, 2017 Center for Advanced Human Resource Studies Connect | Educate | Achieve

Implicaons for HR funcon skillsets and capabilies for the future The group had a number of thoughts regarding the new skills and capabilies that HR needs to develop for the future:  Shi from acvies to outcomes — What is the employee experience you’re trying to achieve? What is the leadership development experience? This change opens you up to looking at doing things differently.  Redefine strategic business partner – primary role is to help the team be beer; help the leader be beer.  Shi the view of HR Shared Services as a transaconal group and view it as a strategic lever to reshape the employee experience.  Have HR act as the Product Design Leader for the Employee Experience. Think about designing something more consumable. Shi to “how do I make it easy to work here?”  HR’s approach to learning should change from being a content builder and conduit to a curator. Many companies find that peer‐produced content is the most watched — not HR‐ or corporate‐produced. HR can keep the learning true to principles but having all things flow through HR/L&D is too slow and not as authenc. The more advanced organizaons are using algorithms/analycs to opmize how they do this.

This Summary Report was prepared by Beth Flynn- Ferry and Chris Collins for use by participants of the Driving Culture Change Working Group.

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