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Cultural Change:

Where are we and where do we need to be?

Robin Kramar CAHRI, Adjunct Professor, Notre Dame University

Sugumar Mariappanadar, Senior Lecturer, Business, Peter Faber Business School, Australian Catholic University

Nicholas Barnett CAHRI, CEO Insync Surveys

Cultural change required in a Post-Hayne Royal Commission world

Nicholas Barnett, CEO, Insync

A post Hayne Royal Commission world

This session is all about

building an

ethical and

sustainable

culture

Who is Nicholas Barnett? - (His character/personality explains

what drives his decisions, actions and behaviours)

Two quotes

We shape our buildings and afterwards our buildings shape us

Winston Churchill, 1943

Shape your culture well – it will then shape you

Nicholas Barnett, 2015

Our organisation’s culture is critical to the successful

execution of strategy

Agreement average: 6.4

CEO and executive leadership behaviours have a significant

impact on our organisation’s culture

Agreement average: 6.6

Our organisation makes the best use of its human capital

Where we are (average: 4.3) Where we should be (average: 6.4)

Truth 1: Cultural problems are pervasive

Truth 2: Cultural

problems are often

immense

Truth 2: A synthesis of 650 respondent comments

▪ Poor leadership (including unethical behaviour and

self-interest)

▪ Lack of accountability and consequences for poor

behaviour

▪ Limited performance and behavioural measures

▪ Lack of communication

▪ Lack of clarity and education around vision and culture

▪ Resource and time constraints

▪ A short-term results focus

▪ External political, stakeholder and compliance

pressures

▪ Ethical leadership from the top down (board, CEO and

executive)

▪ Clear vision and mission/purpose

▪ Clear values and behavioural expectations

▪ Calling out and consequence management of poor

behaviour

▪ Clear codes of conduct and policies

▪ Clear and transparent communication

▪ Training and tools to embed ethics

▪ Focus on customer needs

What factors prevent your leaders helping to

achieve an ethical culture?

What factors help your leaders achieve an

ethical culture?

Truth 3: Larger organisations have larger culture problems

Truth 4: CEOs have trouble seeing culture problems

Where to next?

1 Ask penetrating questions

2 Conduct a rigorous reality check

3 Live an inspiring vision, commit to change

4 Make sure you have the right team

5 And read, share and discuss how the report

applies to your organisation

APRA’s review of CBA’s culture –

a rigorous reality check

APRA’s summary of 36 bank

and other financial services

self assessments

US Business Roundtable’s new Statement on the Purpose

of a Corporation

• Delivering value to our customers

• Investing in our employees

• Dealing fairly and ethically with our suppliers

• Supporting the communities in which we work

• Generating long-term value for shareholders

We commit to:

Each of our stakeholders is essential. We commit to deliver value to all of them, for future success of our companies,

our communities and our country.

The future will still be human if ……..

Insync’s RAMP model of employee engagement drivers

CONCURRENT SESSION

PROFESSOR ROBIN KRAMAR

• Good news for HR professionals ---HR essential

• HR providing leadership for cultural change

• Influencing CEOs and senior management about cultural change

• Ensuring systems and processes for an ethical culture

• Wake up call for HR professionals

• Not provide an appropriate leadership for cultural change

• Not have as much influence as other managers

• Don’t ensure systems and processes conducive to organization having an ethical culture

TRUTH #5: CAPABLE HR IS NEEDED TO GUIDE CULTURAL CHANGE

CONCURRENT SESSION



CONCURRENT SESSION


• Need significant cultural change in more than a third of organization’s surveyed

• Alarming gap between desirable culture and existing culture

• Lack of measures to understand current and future culture

• No clear description of current or future culture

• Lack of plans for culture change over next 2-3 years

• Some reasons

• “Written down but not embedded”

• “The culture is evolving and siloed …”

• Defined culture, not necessarily translated


CONCURRENT SESSION


• What role should HR play in guiding

cultural change?


CONCURRENT SESSION


• HR has an important role to play as an

• Ethical and Credible Activist

• Culture and Change Leader

• Stakeholder Mentor and Coach

• Strategic Architect

• Behaviours

• Collaborative

• Courageous

• Influencer

• Future oriented


CONCURRENT SESSION

PROFESSOR ROBIN KRAMARTRUTH #5: CAPABLE HR IS NEEDED TO GUIDE CULTURAL CHANGE

‘HR has the appropriate organisational influence to impact cultural change’

‘HR has at least the same influence as other senior leaders’

‘HR provide the appropriate leadership in relation to cultural change’

CONCURRENT SESSION



Item Gap

Business Driven

HR has a good understanding of the key drivers of our organisational success

1.7

HR’s input and advice is valued in relation to important organisational decisions.

1.5

Ethical and Credible Activist

HR challenges our organisation to higher standards of ethics. 1.5

HR calls out any lack of ethics in our organisation when appropriate 1.1

Culture and Change Leaders.

HR has the appropriate organisation influence to impact cultural change 1.8

HR has at least the same influence as other senior leaders. 1.7

HR provide the appropriate leadership in relation to cultural change. 1.5

CONCURRENT SESSION



Behaviours HR responders Non-HR responders

Business Driven Actual Desired Actual Desired

HR has a good understanding of the key drivers of our

organisational success

5.3 6.5 4.6 6.1

HR’s input and advice is valued in relation to important

organisational decisions.

5.0 6.5 4.6 6.0

Ethical and Credible Activist

HR challenges our organisation to higher standards of ethics. 5.2 6.3 4.4 5.9

HR calls out any lack of ethics in our organisation when

appropriate

5.4 6.5 4.5 6.2

Culture and Change Leaders.

HR has the appropriate organisation influence to impact

cultural change

4.6 6.4 4.1 5.9

HR has at least the same influence as other senior leaders. 4.7 6.4 4.2 5.9

HR provide the appropriate leadership in relation to cultural

change.

5.1 6.5 4.3 6.0

CONCURRENT SESSION



Question Mean HR Non-HR

Now should Gap Now Should Now Should

Our organisation makes

the best use of its human capital

4.3 6.4 2.2 4.3 6.5 4.5 6.4

Our organisation’s leaders

often ask our employees

how we can support and

empower them better

4.4 6.3 1.9 4.3 6.4 4.5 6.2

CONCURRENT SESSION

PROFESSOR ROBIN KRAMARTRUTH #5: CAPABLE HR IS NEEDED TO GUIDE CULTURAL CHANGE

CONCURRENT SESSION


• Has HR become too focused on Business driven role?

• Have HR perceptions of business driven been too focused on short term financial results,

not long term sustainability?

• Have HR perceptions been focussed on the interests of owners, rather than the interests of

the customers and employees? Are organisations accountable for their impact on external

stakeholders?

• Does an ethical culture explicitly take into account the impact of organizational actions on a

variety of stakeholders?


CONCURRENT SESSION

DR SUGUMAR MARIAPPANADAR

• SPL 1 – Sustainability compliance: An organization’s corporate

governance and HRM systems primarily exist to mitigate financial

and/or legislative risks. This is achieved by complying with

industry-specific regulatory standards for monitoring and

improving performance on those aspects which are material to

human/social and environmental outcomes for key stakeholders.

• SPL 2 – Sustainability and economic efficiency: An

organization’s corporate governance and HRM systems are in place

primarily to achieve financial benefits through economic efficiency.

However, these governance practices and systems do not take into

account simultaneous negative impacts on critical human/social

and environmental outcomes for key stakeholders.

• SPL 3 – Social legitimacy for sustainability: An organisation’s

corporate governance and HRM systems are built on moral and

ethical values of sustainability to achieve financial benefits. These

values are used to facilitate and maintain desirable actions within

socially constructed normative guidelines, in order to create

benefits in critical human/social and environmental sustainability

outcomes for key stakeholders.

Moving forward with Sustainable HRM Performance Level (SPL)

SPL3 :

Social Legitimacy for Sustainability

SPL2 : Sustainability and Economic Efficiency

SPL 1: Sustainability Compliance

SPL Aspiring: Committed to Sustainability Compliance

Each SPL highlights the corporate governance and HRM system processes

and sustainability results achieved in that organization

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