2019 Global Culture Report

FOREWORD

Your culture is the heart and soul of your organization. It is the social operating system that influences what is valued, how people work, and how the organization interacts with its customers and extended community. An organizational culture is alive, continually influencing and being influenced by the shared values and behaviors of its people. No culture is static. It morphs, improves, or suffers from inside and outside forces. Though they are highly complex and changing, strong workplace cultures act and respond in predictable ways. Great workplace cultures create incredible advantages—they attract talent, mobilize innovation, develop strong leaders, and become the organization’s muscle memory for ongoing success.

The context in which organizations are operating continues to change, making it challenging for leaders to respond to new disruptions while continuing to bolster and improve their workplace cultures. In our extensive research for the 2019 Global Culture Report, we saw several factors impacting organizations around the globe. All research, unless otherwise cited, is from the 2019 Global Culture Study conducted by O.C. Tanner.

CULTURE DISRUPTORS

1. A More Diverse Workforce

Increased diversity is not only changing the cultural demographics of the workforce, but changing the expectations, complexity, and professional relationships in the workplace. While research has proven again and again that bringing together different perspectives, backgrounds, and ways of thinking leads to better decision-making and innovation, many organizations are still lagging in their ability to build inclusive cultures. When businesses create workplace communities and leadership teams that reflect their diverse communities and customers, they can better address social issues, understand customer needs, and support their employees. Unfortunately, just 36% of business professionals say their company actively works to be more diverse.¹

Employees who feel their company fosters an inclusive culture are 3.2x more likely to feel empowered to perform their best work.²

“Decision-making teams that include a wide range of younger and older employees significantly outperform more narrowly young or old teams. These multi-generation teams are more likely to identify better choices and deliver results that meet or exceed expectations.”³

One of the significant challenges in cultivating a unified workplace culture is overcoming the fragmentation effects of a more diverse workforce. Leaders are now asking themselves how they can create a strong sense of one-ness within teams and across business units and geographic regions while preserving and honoring the differences they and others value. Culture builders must be even more thoughtful and passionate about finding and communicating a shared purpose and shared values around which all can unite. We love what one culture-building CHRO uses as her vision and mantra with her team and leaders, “Let’s create a great place to work for everyone, every day.”

It’s a Generational Thing
We are all experiencing the effects of having five generations in the workforce—each with their own distinct views and attitudes. It is no wonder that generational conflict at work is at an all-time high. This conflict should be no surprise as it is born out of very different life experiences, mindsets, and differing expectations about fairness, flexibility, work ethic, leadership styles, authority, etc. There has been a lot of press for years around Millennials, and now we see their influence increase as they become leaders and insist on making changes to their workplace cultures.

Millennials are now becoming leaders who expect change:⁴

64% Want to make the world a better place

79% Desire a coach or mentor rather than a traditional boss

88% Seek collaborative work culture rather than a competitive one

88% Hope to incorporate work-life “integration” (as opposed to work-life balance)

74% Ask for flexible work schedules

The newest generation, Gen Z (or iGen), is quite different from previous generations. Born between 1995 and 2012, they are now beginning to enter the workforce. They’re more practical but also more vocal when it comes to perceived injustice and inequality. They are highly connected technologically, but also lonelier and more depressed than previous generations.⁵ Because they grew up interfacing with technology every day, they are more likely to misunderstand or misconstrue social interactions. Gen Zers bring a whole new set of challenges to an already complex workplace. However, Gen Zers are also more optimistic, motivated, and tend to have a higher sense of purpose. They can be strong advocates for great workplace culture. They want to be part of something bigger than themselves. Perhaps more than any other generation, they want to feel connected.

Research shows that teams comprised of various generations (Millennials, Gen Xers, and Baby Boomers) make better decisions together. Multi-generation teams were 2x more likely to meet or exceed expectations compared to teams made up only of “young” or “older” employees.⁶

2. Increased Use of Technology and Artificial Intelligence (AI)

Technology is now intricately woven into the fabric of our lives— including at work. We’ve already seen growth in technology available for recruitment, talent management, leadership development, engagement measurement, wellbeing, and corporate learning. Yet Gartner⁷ argues that HR leaders must do more than merely use technology. They must make the transition to being a digital business, with both processes and culture revolving around a new business model. For example, it’s not enough to move from using paper applications (and forms) to digital signatures. HR departments must transition to an entirely new way of attracting talent and communicating company benefits and programs via technology. One of those ways is through Artificial Intelligence (AI). Futurist and author Martin Ford⁸ believes AI is becoming more and more prevalent in our lives—impacting how we live, work, interact with others, and even how we make choices. While some people worry that will dehumanize the workplace, nothing could be further from the truth. Yes, AI can work wonders for efficiency, but we still need human ingenuity and creativity to tap its true potential. Rather than AI, we can think of it as IA (intelligent assistant), because the technology really can help us learn more and do more.

It’s not a matter of AI replacing jobs. It’s a matter of understanding that some skillsets need to change in order to capitalize on the benefits of AI.

3. A Lack of Connection in an Increasingly Connected World

As humans, we have an innate need to connect. We want to be part of something bigger—to work together toward a common goal. Today, there are all kinds of technologies to help us connect, yet we’re actually more disconnected than ever. We text. We message. We connect on social media. We “talk” through communication apps. But only occasionally do we walk down the hall or pick up the phone to talk to someone. No wonder there’s been a steady 30-year decline in Americans’ satisfaction with peer-to-peer relationships at work.⁹

“You have to break bread with them, sit at lunch and have lunches with them, cry with them, laugh with them. You’ve got to be down there constantly shaking hands, talking to them, asking them questions. There’s no finish line.”
—GENERAL MANAGER, TECHNOLOGY COMPANY

Despite the tsunami of digital connections, we’re not making the connections that matter. Data from our 2018 Global Culture Report shows that 42% of respondents do not have a close friend at work. Not surprisingly then, 46% percent of respondents reported feeling lonely.¹² And Gen Z is the loneliest generation of all.¹³ Longer work hours, social media, and an increasingly mobile lifestyle all play a role in this increased loneliness.

A culture where people feel disconnected doesn’t just hurt employees. The Center for Prevention and Health estimates mental illness and substance abuse caused by poor emotional wellbeing costs employers $79—$105 billion every year through reduced productivity, absenteeism, and increased healthcare costs.¹⁴ The lack of genuine connection prevents the collaboration, innovation, and shared purpose that drives business success. It also increases turnover rates.

“There are more opportunities for people to hide behind technology—whether it’s text, instant messaging, Skype, or email—so that if there is some type of issue that never gets resolved, it’s left to fester.”
—PRODUCT VP, MANUFACTURING COMPANY

A Call for Connection

Culture disruptors are creating head-winds that are clearly challenging the way companies do business. Leaders are now looking at how to create workplace cultures that can withstand the uncertainty of changing business models, an increasingly diverse workforce, a flood of new technology, and the disconnectedness that results.

A great workplace culture creates the connection we crave. But it has to be cultivated.

We all have our work cut out for us. Only 66% of respondents to the 2018 Global Culture Study are engaged. If offered a job at a different company with a similar role, pay, and benefits, a little over half of employees (55%) would accept the job.

When you have a shared purpose, accomplish great work together, and achieve team success, you build strong bonds—much more so than just going out to lunch or getting drinks together. Employees thrive when they feel part of something bigger than themselves, when they rise victorious over challenges and opportunities, and when they create meaningful relationships with coworkers. They thrive when they can feel connected to a successful organization through their own achievements and great work. Organizations thrive when they have a culture that fosters this connection. They are more resilient and adaptable to the external forces that disrupt workplace culture.

Just 16% of employees said they felt “connected and engaged” by employers.¹⁵

A MODERN CULTURE FRAMEWORK

As culture-building leaders, how do we overcome these workplace stressors and build connection? How do we ensure our culturebuilding efforts are creating a great employee experience? How do we attract the best talent, inspire people to achieve, and engage them for the long haul?

Last year, in a landmark global research study on workplace culture,¹⁶ we identified the six essential elements of a great workplace culture. These are the aspects of company culture that employees themselves identified as most meaningful to them. They are grounded in the employee experience and are the fundamental building blocks of a great culture. We call them Talent Magnets™ because they attract and connect people to the places they work. They are purpose, opportunity, success, appreciation, wellbeing, and leadership.

Talent Magnets attract the best people to your organization. They draw out an employee’s inherent desire to do meaningful work that makes a difference. They retain employees who may have the opportunity to leave. Research shows top performing companies with thriving workplace cultures excel in all six Talent Magnet areas.

The Talent Magnet Culture Framework is a helpful construct for developing plans, evaluating culture initiatives, and measuring the impact of culture-building efforts.

This year’s study shows how interconnected the Talent Magnets are. Having a meaningful purpose creates opportunity and improves chances for success. Appreciation strongly impacts employee perception of wellbeing and leadership. Providing opportunity creates a feeling of appreciation and bolsters leadership. Improve one magnet, and you will see a lift in the others. All six Talent Magnets work together to build the connections and employee experiences organizations need to retain, engage, and attract their people. As you’ll see, recognition and wellbeing, when combined, have a unique, powerful effect on employee retention. If you want to build a thriving culture where people feel connected, focusing on these six areas can help.

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Creating Peak Employee Experiences

An employee’s life at an organization is comprised of thousands of experiences: from their first interaction during the application or recruiting process until they walk out the door on their very last day. But the employee experience is about more than a timeline of beginnings, transitions, promotions, and endings. Tiny interactions with your company affect the entire employee experience. Daily emails and conversations with leaders and colleagues count. As do the work environment and the resources and technology people use. The recognition they do or don’t receive. Job responsibilities and projects. The meetings they are involved in. All of these things combine to create an employee experience which, like it or not, affects how employees engage with your organization. A poor employee experience makes an employee feel disengaged, cynical, and disgruntled. A great employee experience is filled with meaningful interactions that help employees become connected, feel inspired, and thrive.

Each employee experience is comprised of thousands of moments, good, bad, and in-between. But rather than focusing primarily on fixing the negative, lackluster experiences employees may be having,

You can’t drive employee engagement. But you can build a workplace culture that employees want to engage with, and connect with, through a great employee experience.

Companies should pay more attention to creating peak experiences. Research indicates that positive experiences like celebrations of success, triumphs, and meaningful interactions, have the power to overshadow (or erase if you will) the poor or damaging experiences employees have.¹⁷ Positive peak experiences help innoculate employees against the personality conflicts, frustrations, deadlines, and other disappointments that occur naturally at work.

Where to begin? In this report, we’ll discuss simple, concrete ways to improve in all six Talent Magnets. You will see how each magnet plays a role in building connections. You’ll learn about the extraordinary power of three core tools in creating peak experiences: Recognition, special projects, and continuous performance management. These three tools improve the six Talent Magnets by singling out, utilizing, and celebrating the unique value an employee brings to your organization.

By helping each individual contribute to your organization, and celebrating them for their great work, you’ll not only create peak employee experiences, but you’ll create a company culture where people feel connected and thrive.

You can start by aligning employees to a meaningful purpose.

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