people discussing plans over whiteboard

The pandemic has been a critical test for leaders, and culture is one area which will distinguish the better leaders in our economy, says Dr Sally Pitkin FAICD, chair of Super Retail Group.

“We need humanity in our leaders during this crisis and in the recovery phase. I think what the pandemic has done is to test leadership teams and boards, in a very serious way.

“And I think as we come into the recovery phase, we are going to see boards and CEOs really look closely at how individually and collectively they have gone through the crisis phase. We may well see changes in leadership teams as a result.”

Organisational culture is critical to performance, and to reputation and sustainability, she told the AICD during an interview. “To build a strong culture, you need a clear purpose. It's very important now during the recovery phase, because organisations need to focus not only on the near term but also on the longer-term.”

During this time, boards and leaders should prioritise connecting mission and purpose to culture, she adds. “Purpose has always very critical to culture. Your core purpose and your ethical framework inform all of the decisions to make. So if you have a clear purpose and you have an ethical framework for decision making, then you'll make good decisions.

“A lot of organisations that I'm associated with are thinking about the plan they need for the next two years. But we can’t stop thinking longer term, and having a longer term vision and strategy.”

The new normal

How long will we work from home? There are indications that we will not go back to an office environment to the extent which prevailed before the crisis.

Overseas, Germany is planning to introduce a legal right to work from home after the COVID-19 pandemic and Finland is making remote work possible from both a legal and cultural perspective.

In Australia, a new survey of their staff by EY shows that one in five do not want to return to the office. Twenty per cent of the 8,500 staff prefer to keep working from home.

As we move forward on recovery, leaders may need to pay more attention to the softer side of people management. “One of the things we think you should do is take the time to reflect as you move from respond to recovery,” says Deloitte Australia Human Capital Leader Pip Dexter.

Managers should decide what needs to be preserved, which may relate to checking in with staff and understanding how they are feeling. “Softer levers around leadership, engagement and communication are really important as you move forward.”

Dexter says the crisis has been a real test for business leaders in terms of resilience and adaptability. The remote working experiment has shown us the value of technology but has also amplified the human element of work, and life, with leaders being required to show more authenticity in a time of crisis.

In its 2020 Global Human Capital Trends report, titled “The social enterprise at work: Paradox as a path forward”, Deloitte says the top two global trends this year are wellbeing and belonging.

Seventy-nine percent of global respondents to the survey said fostering a sense of belonging in the workforce is important or very important to their organisation’s success in the next 12-18 months. On the belonging front, corporate purpose will be the glue that brings workers together, back into the office, post COVID-19.

Eighty per cent of organisations globally said worker wellbeing is important or very important for their success over the next 12–18 months, but only 12 per cent say they are very ready to address this issue.

Other research has found that the use of virtual platforms such as Microsoft Teams has been effective in connecting remote working teams during the COVID-19 lockdown. Swoop Analytics found that Teams collaboration increased on average by 210 per cent and Yammer by 84 per cent between February and the first week of April. Laurence Lock Lee, the co-founder and chief scientist at Swoop Analytics, says there may be an extended transition to “the new normal”.

He urges management to identify those teams that are thriving in the virtual work environment and facilitate the sharing of effective working practices through online forums in order to “move into a creative and innovative stage, where shared knowledge can be leveraged into a productive new normal that is right for you and your organization”.

1. Hybrid working models

Some organisations may have found during the crisis that their organisational culture was strong and responded well to the challenges of the pandemic, observes Pitkin. “However, there may be others that have found the opportunity to change or strengthen different elements of their culture.”

Remote working has delivered some challenges, and a new hybrid way of working that incorporates both virtual working and a staged return to office environments should be included in any strategy around culture, says Pitkin.

“As we transition back to workplaces, that might mean different things in different organisations, but there may be a more hybrid way of working in the future. We've got to rethink some of those norms around how we work together.”

2. Maintaining innovation

The pandemic forced many businesses to reinvent business models and react quickly to the crisis, in ways that were agile and innovative, and embraced technology. Often this involved consulting staff for ideas.

It is important not to lose that momentum on innovation, warns Pitkin. In some cases, business changes that may have normally taken months or years were executed within a matter of days.

“For example, on one of the organisations where I am a director, within 10 days we were able to stand up and deliver a remote protected interface which provided quite complex support for a number of clients. That had been on our technology roadmap for some time.

“At Super Retail Group, where we have four different consumer brands, we were able to get all of those brands to work together to provide consistent contactless click and collect across all of the brands within a matter of days. So, in terms of those sorts of things, I don't think any organisation wants to lose that momentum.”

3. Measuring culture

Organisations are becoming more sophisticated in terms of how they think about monitoring culture, says Pitkin. “I think we still have a long way to go, but there is a lot of information available to you and you can build a dashboard that is relevant for your organisation. What we want is a blend of internal and external data.

“You need to be measuring culture on a rolling basis and in a dynamic way, so organisations should have been keeping an eye on organisational culture during the crisis phase of the pandemic. And they should continue to do so during the recovery phase.”

4. Caring culture and concern

In the crisis phase, some plans needed to be put on hold and will need to be restarted. Some of those plans and actions will help organisations to keep an eye on culture, she says.

Most organisations focused on a couple of things to watch closely in this crisis phase to give an early read on how people are responding.

“For example, access to an employee assistance program, and getting statistics on things like the number of calls the program receives.” Some business leaders may need to consider whether they need to expand the program. “You will find that organisations that are on the ball will have responded and will look at all of those levers, not only to support team members but also to keep an eye on how things are going.”

It is important for leadership teams to not lose sight of the caring concern that needs to be shared with other team members, other stakeholders and business partners.

“With remote working, you can miss a lot of the key cues that in-person interactions give you. I think organisations, and leadership teams in particular, recognise that certain points of interaction and engagement with team members are very critical even in a remote working environment. And so, extra effort has to be put into that.”

5. Communication is key

Communication is critical. Staff want to feel that the organisation cares about them in a real way at the moment as people return to work in the office, and that they will be supported, says Pitkin.

“I think it's going to be a staged return to work. We need clear, consistent and constant communication about all sorts of things from how the office is going to be set up to how people are going to get to work and what their hours are going to be, whether they have concerns about returning to work in a hybrid situation, or if managers should be talking to them about not returning to the office until later.

“For a while, all of that has to be staged and it needs to come down to quite an individual level I think, so that you understand the different groups within your organisation.”

Download our AICD Culture Tool on Governing Organisational Culture

More about Dr Sally Pitkin

Dr Pitkin is chair of the Super Retail Group and a director of The Star Entertainment Group Limited and the Link Group. She is also a former National Director of the AICD Board and holds a PhD in Governance from the University of Queensland. Her most recent article on organisational culture can be found on the AICD website.