Proving the Business Value of a Strong Organisational Culture: Four Keys to Serco’s Success by Chartered Director Robert Smith
About two years ago Serco was confronted with a number of reputational challenges that resulted in lost confidence from some of their key customers in the U.K. To urgently address these issues, below, Robert tells us how Serco developed a corporate renewal programme to increase awareness of their business values and bolster their corporate culture from the inside out.
I am often asked what the business case for ethics is and I simply reply, “reputational risk management.” The root causes of many reputational failures are ethical or cultural failures. I’m not alone in this sentiment—many surveys, including a recent one by Deloitte, places reputational risk at the top of their surveys of strategic business risks.
At Serco, we needed to take strong steps to create a stronger organisational culture of ethics and respect. As a first step, we had NAVEX Global’s Advisory Services team undertake a culture and ethics assessment across our business. The assessment not only confirmed what we knew, but also raised a number of issues that we had been blind to. It challenged our views and made us think—something we all need to take the time to step back and do.
Our focus was really culture rather than just compliance. I appreciate that compliance programmes are important to provide the sound foundation for an ethical culture. For me, however, the focus should be much more around the behaviours of leaders, the clarity of values and purpose and aligning the two. It’s this alignment that will truly shape and change the ethical culture and characteristics of an organisation. Our focus has certainly shifted in this direction.
You would think that with such a clear business case it would be an easy journey—but that is not the case. Change management for organisational culture change is a major challenge.
Key to Success #1: Be Louder Than the Noise
For me the main challenges have been about being heard amongst the noise. Any business crisis drives a whole stream of initiatives, with ethical and cultural change being just one.
However, we know that a culture of ethics and respect must be embedded throughout an organisation—not thought of in a silo that is solely the responsibility of those with “ethics” in their title. We took a strategic focus that attempted to ‘join the dots’ across a variety of initiatives covering employee engagement, talent management, business operations and corporate communications and identified a number of different channels for engagement (print, web, webcasts, forums, training etc.) to ensure consistent and clear messages were getting through.
Key to Success #2: Take it From the Top
As part of a broader leadership and talent review we aligned to a new leadership model which doesn’t just define leadership competencies but also the behaviours that are expected from leaders at all levels through the organisation. This was supported by training, not to teach leaders ethics, but rather that effective ethical leadership is a competency to be developed—just like any other business competency.
For us, the focus of development was around getting our leaders to recognise the impact they have on the ethical culture of where they work, and to improve their decision making. We looked at external case examples of good and bad behaviours by leaders, and the impact they had on the culture and performance of an organisation. This enabled real debate and consensus around how we want leaders to behave, and the working environment they can create.
Key to Success #3: “Know it. Use it. Live it.”
Supporting this leadership development training was recognition of the need for greater engagement with all employees. Building trust with our customers is one thing; we also needed to rebuild the trust of the 100,000 employees who work for us.
Our first step was to completely revamp our code of conduct. Not to change the rules, but to change the way we present them. The refreshed code, which we’ve titled “Know it. Use it. Live it.” reflects a completely different tone. It is not just about what “you” need to do. It outlines Serco’s responsibilities alongside what the company expects from every employee: “you” equals “all of us.” We also changed the language used to make it simpler, clearer and more direct, avoiding “legalese.”
Related article: What’s In Your Code of Conduct?
We also spent time on the structure of the code of conduct so that it becomes a way of actively thinking about what we need to do and how we need to behave—how to live our code of conduct.
The document is supported by a web site with 92 interactive dilemmas, a number of animated learning tools and direct links to policy documents, guidance and other toolkits, such as the U.K. Institute of Ethics “Say No” Toolkit, our decision-making guide and a simple flow chart showing how to raise issues—and what happens when you do.
And recognising that one important element of trust is transparency, our code website is a public website which anyone can view.
Key to Success #4: Recognise that Change is a Continuous Journey
We all know this is a continuous journey. Each day we continue to strive to stay true to our ethical compass, and we have learnt the importance of putting ethics at the very centre of our corporate agenda. Four of the strategies we’re using to make sure we’re staying on track for the long-term are:
- Consistently challenging our purpose and values. As with our code, it is not about changing the core principles, but rather looking at the language we use so that we better engage with a modern day workforce. We engaged our leadership with this thinking. Not as a siloed ethics initiative, but alongside and core to the output of a business strategy review.
- Continuing to build our leadership training with greater focus on leaders’ decision making, particularly under challenging circumstances. It’s about getting them to apply the tools we have to strengthen their decision making, the way they perform in meetings and the impact they have on those around them.
- Changing our leadership model and our performance review process. Our assessment will not only look at the ‘what’ an individual has done—which has been the historical focus of performance reviews – but also the ‘how’. And to remove subjectivity the leadership model provides examples of good and bad behaviours that might be associated with all elements of the model.
- Improving employee engagement to more quickly identify and address pain points. We continue to improve employee engagement, and we’re taking the time to better segment the data we get from employee engagement surveys. This allows us to proactively plan better forms of intervention. We need both a rigorous set of policies and frameworks and an equally strong commitment to driving a sense of humanity at work and creating closer connections.
Inappropriate or unethical behaviour is not just down to bad apples. More, it is likely that a series of connected events create a perfect storm. Rules and regulations alone will not encourage the right behaviours. The less we are listening to all the signals, the more we will miss and the harder it will be to galvanise people and rebuild our organisation.
We are trying to apply rigour, transparency and operability to our systems with the introduction of new programmes, processes and procedures. But critical to the continuing successful embedding of these systems are our people. We need the willing collaboration and consistent application of these processes and measures by everyone in the organisation.
Developing 100,000 willing followers in Serco may take time, but the outcome will be an engaged and productive group of people who are proud to work for Serco, and who will play a significant role in building trust, ensuring that we sustain a culture of ethics and respect, and ensuring Serco’s reputation continues to deliver the significant business value we know that it can.
For more from Robert and Daniel Kline of|NAVEX Global on training strategies that work, watch their webinar, “Ethics & Compliance Trends Across EU & Beyond: Advancing the Trust Agenda and Maintaining Programme Momentum.”