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How to Drive Culture Change in an Organization: 5 Secrets

By GAN Integrity (Updated )

Let’s face it: driving cultural change in your organization is typically easier said than done.

Organizations and the people who make up its workforce are complex. Often rooted in old bad habits or taught new ones along the way, changing the culture at an organization begins with understanding it deeply.

To help us tackle the monumental task of shifting behavior that compliance officers around the world are attempting to inspire, we brought together some of the top minds in the space for a special discussion. We gathered at St. Barnabas in London to talk about compliance, ethics, and cultural change. We tapped two very knowledgeable and inspiring women in the compliance space to lead this discussion. We welcomed Ruth Steinholtz, Managing Partner of AretéWork, and Isabelle Meyer, Deputy Group General Counsel of Just Eat, to the spotlight to discuss how culture transformations can successfully occur within organizations. The conversation was moderated by Pauline Blondet, VP of Compliance at GAN Integrity, who writes our blog series known as the Commando Approach to Compliance. Each month she tackles a compliance topic focusing on the concrete challenges compliance officers face in their day-to-day lives.

Below we’ve attempted to summarize the inspiring conversation that transpired in real life so that these insights can be shared on a bigger stage. During our discussion, five cultural change takeaways stood out:

5 Secrets to Driving Cultural Change in Your Organization
Here's a glimpse into the event at St. Barnabas in London.

1. V-A-L-U-E-S

Sing it with me now! To change a culture you need to start with values outside the compliance department since values are the key to cultural transformation. To further emphasize the importance of values, Ruth went as far as to say that “culture eats compliance for breakfast”. This visual is helpful to remember the importance of both these components within an organization.

It’s important to remember that organizations don’t change but people do. Particularly the leaders in companies have the ability to drive impact, so starting with behavioral change within the leadership can be the quickest way to shift culture.

You also want to make sure that the values created are actually written down reflect the true ethos of the organization. You want employees to be able to understand and identify with the values, otherwise, they are not authentic which can be worse than not having them at all.

2. Understand the Culture

Understand what your organization’s culture is really like. What values and behaviors characterize your organization on a daily basis? What are the areas where there are negative values or behaviors that are driving people to feel unfairly treated and thus rationalize behaving badly? Identifying these areas can highlight where you need to do more training.

During our discussion, Isabelle pointed out that in most organizations the compliance team seems to sit somewhere in between top management and the rest of the employee base.

Typically employees can share their concerns with the compliance team and compliance has access to the top.

However, there are situations in which top management is convinced that they have an amazing culture, when in fact, the organization does not. Whether they did not realize this or did not want to accept it, it does not help build towards a solution to fix it.

Sometimes employees are afraid to express themselves truthfully because they think there will be retaliation. How do you, as the compliance officer, change something where you know people are unhappy but don’t feel safe to speak up?

Unless you use an instrument that allows you to look at your culture holistically and split the results by seniority level, it is difficult to convince people at the top that the culture is toxic unless you can show them evidence.

At the end of the day, fear creates dysfunction. Employees need to feel secure and feel that they belong. This is why a positive, healthy culture is a necessity. Effective compliance is the outcome of a healthy culture, not the driver of it. Let that sink in.

3. You Don’t Have To Do It Alone

The good news is, you don’t have to transform the corporate culture of your company by yourself (nor would we suggest it). Everything you do should be done in a consultative way. Nothing effective has been developed in isolation at big organizations, collaboration with other leaders, teams, and departments can be your secret weapon to success. We tend to create things centrally in compliance and forget to consult others enough.

Take a values-driven approach to compliance. This means spending time consulting, talking, and involving people (managers and employees) in drafting any code of ethics and selecting values. The more people you involve in building values, the more they feel they own it which means they will naturally promote it.

It’s also essential to remember that you can’t change culture simply by doing more training. You have to get the senior management team to promote and adopt new values and culture.

Compliance ultimately needs to be seen as a business partner. Currently, compliance is often seen as a support function when we should be seen as a critical part of the business. Compliance should be a network of local “officers” working with the central office.

4. Nothing Can Be Done In Isolation

Create a group of people throughout the organization who are not lawyers or in HR that can help instill compliance and ethics throughout the organization. Think of these people as your “ethics ambassadors” and be sure to involve every function and level. Involving a diverse group will help ensure that everything you’re doing makes sense locally and that you consistently communicate your message across all countries.

This can also be an effective way to break down the fear that employees can sometimes have for the compliance and legal departments. By working with champions locally and having them lead the training they are able to help colleagues with answering questions. Having a peer rather than top management explain compliance takes away any intimidation factor. With that said, ambassadors are only there to consult not punish or implement strictly.

Remember that people and cultures are diverse in multinational companies. Values should be the same globally, but it’s important to have a champion locally that can pass on the message for local understanding.

When it comes to internally recruiting for the compliance team it’s all about finding the right people irrespective of their role in the company. They need to be credible, approachable, not afraid to challenge what is being said, and also capable of being discreet. It’s best to avoid having HR and lawyers do the training but rather connected, local employees who know the challenges and hurdles of the day-to-day job.

During our live chat in London, a member of the audience even pointed out that “becoming an ethics officer if you are already a senior employee in any other position is rather easy because you know the business and the business knows you”.

5. Compliance is Not a Project

Ethics and compliance is not a project or a short-term initiative, those both have end dates. Instead, compliance is ongoing and should always be prioritized. In order to create, improve, and transform culture you need to make it easy for employees to do the right thing and have a broad coalition across all functions. Change has to be driven by senior managers and their behavior and values should be aligned with the changes you’re trying to make.

Tips for Driving Organizational Change

  • Make the business case for cultural change strong and avoid focusing on “we’re doing this because it is the law". The motivation should be strong ethical cultures are good for businesses and there is growing evidence of this.
  • Compliance needs to be in a listening mode more often and have a deep understanding of the business to see the real risks.
  • Change people’s mindsets, by sourcing their real motivations and values (again, authentic values that are right for your company).
  • Get people to take values seriously because it will drive a more successful company and make the compliance officer’s job much easier. One way to do this is to rally around an important social purpose and let that inspire the conversation.

More on Cultural Change

To learn more about spearheading cultural change within organizations, I suggest you read our CCO Conversations interview with Kim Yapchai of Tenneco. In the interview, Kim discusses how to cultivating culture through compliance and shares some of the most beneficial technology she’s come across in the space.

We also wanted to give a huge thanks to Isabelle Meyer and Ruth Steinholtz for their time and insights at the event in London. Ruth Steinholtz also summarized the 5 Key Secrets we discussed on AretéWork’s website.

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