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Culture & Governance

A NEXT GENERATION BUSINESS PUTS CULTURE AT THE CORE OF THE PERFORMANCE EQUATION

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Next Generation businesses are built on clear purpose and shared direction. They live their values and know how to align behaviour for a differentiated brand experience, leading to improved brand equity, premium returns and reduced risk. They take a long-term view and invest in their culture to build a brand that is admired by their customers and stakeholders

Our Culture and Governance practice provides a full range of solutions for companies to strengthen their purpose and brand values, assess current culture fit, drive wholesale culture change and improve the alignment of day to day decision making to meet regulatory expectations and build sustainable governance.

Culture & Governance Solution Centres

Ralf Schneider

Better Business Compass

A clear and compelling purpose is at the core of any next generation business.

Better Business Compass provides a robust framework and process to review, crystallize and update your organisations purpose and values.

Increasingly, Boards and CEOs are looking to build purpose-driven businesses - not just for risk and compliance purposes, but for long-term value creation and enhanced business performance.

Purpose and values are at the core of sustainable value creation. Latest research on high performance organisations shows that purpose-driven companies produce materially higher returns in terms of market capitalization. They build brand value while mitigating reputational and operating risk.

As a consequence of corporate scandals and conduct failure, trust in business leaders is at an all-time low. Public and political pressure on business conduct is mounting. Regulators impose and enforce ever stricter boundary conditions and potential fines on companies to meet integrity standards.

At the same time employees are looking for more opportunities to make a meaningful contribution through their work and choose employers based on their purpose and values.

Similarly, customers are following more responsible consumption patterns. Loyalty and trust are given to companies that deliver on their brand promise and public commitment to purpose and values.

Better Business Compass will help you to explore, capture, connect and communicate the essence of your business purpose, values and required leadership behaviours.

Explore and crystalize purpose

This inclusive stakeholder process (top-down and bottom–up, inside-out and outside-in) is tailored to capture the unique identity of your organisation at 2 levels:

Mission - Bring focus and clarity to the reason why the organisation exists. The compelling mission of your business and its role in society
Vision - Crystallize and validate where you want to take the business and what to achieve in the long run, with stakeholders in mind.

Redefine
Values

This inclusive process helps you to review explore, capture and consolidate your values, the norms and shared beliefs to which you want to hold each other accountable, determining how you want to operate on a day to day basis.

Define and target culture behaviour

With purpose and values in place, it is important to translate their aspiration into specific behaviours and operationalise your desired culture.

We use an effective and scalable tool, rooted in behavioural research and decades of application, to help you define your desired behavioural profile (ideal culture).

This quantitative approach is complemented with qualitative analysis and decision-workshops with relevant governance bodies (Board/ Management Committee/ Executive Team).

Launch and communicate purpose and values

Once purpose and values are defined, we work with your team to design an effective and flexible communication strategy. We also support you in developing and rolling out creative launch-events, line leadership cascade and communication workshops at scale.

Ralf Schneider

Nicola Foster

Culture Transformation

Transformation is challenging at the system and process level. This is often where resources, effort and attention are invested. However, transformations that do not put an equal focus on the people and culture aspects struggle to embed change effectively and fail to deliver planned benefits.

Our technology-enabled assessment methodology will help you:

Understand your cultural risks and opportunities
Identify your levers for effective change
Embed the desired behaviours to achieve sustainable results

Culture is critical to business success and sustainability. Research shows that culture is a key driver of business performance and a pivotal factor in the outcome of business transformation.

Cultural transformation is unlikely to happen all at once and does not follow a pre-defined or uniform path. Leadership teams need to develop their unique and specific plan for cultural transformation and adapt it as it unfolds.

Cultural transformation is about changing the values, beliefs and behavioural norms of an organisation that define the way people operate, take decisions and perceive change.

It is also about winning people’s hearts and minds.

Whether you are looking to drive wholesale culture change or improve the success of an ongoing business transformation, talk to our Culture Transformation Team to find out how.

Culture Change

When business priorities, business models or strategies change it is important to define the target culture required to achieve the desired business outcomes. Culture change is not for the faint-hearted. However, it is an essential component of successful strategy implementation. It requires strong line-leadership and a systematic approach to change attitudes and behaviours. We help measure your current operating culture to identify and understand the gaps and help you chart an effective path to achieve large scale culture transformation; examples include:

Innovation Culture
Agile Culture
Merger and Acquisition (Cultural Risk Assessment, Post Merger Integration)
Next Generation Leadership
High Performance Culture

Based on a sound and effective culture assessment (online) we work with you to:

Define the new culture (based on business strategy)
Understand what needs to change in the current culture
Design and deliver your specific roadmap to culture change
Build effective change leadership and metrics

Transformation Readiness Check

Many business transformation and change programmes underestimate the importance of managing the cultural dimension of the change initiative. This is why so many of them fail. Changing processes and systems is not enough.

A detailed change plan, cascade of communication and training of staff is not sufficient. Based on our change framework we help you check if your change programme is addressing cultural change risk by:

Understanding the cultural readiness of your business change initiative
Identifying specific culture change gaps and risks
Strengthening the capacity for cultural change as part of your ongoing transformation programme.

Nicola Foster

Culture and Integrity

Trust is the essential ingredient for sustainable business. Customers, employees, investors and regulators expect organisations to live up to their brand promise and to act with integrity. Boards and CEO’s are increasingly concerned with ensuring that business decisions and day-to-day behaviours are aligned with regulations, values and business principles.

Our data-driven assessments detect potential behavioural risk and “blind spots” and identify the levers that will establish and embed the desired behaviours into the culture of the organisation.

An organisation’s behavioural risk profile needs to be understood and actively managed by the Board, CEO and senior leadership. Behavioural risk is an operational risk which, when manifested, has been the cause of highly publicised corporate failures, many of which have occurred in regulated industry sectors. A compliance, or rules-based approach is not, on its own, sufficient to protect an organisation against the adverse outcomes resulting from poor conduct.

Behavioural risk can be mitigated significantly by a healthy organisational culture where leaders set expectations, role model integrity-based decision making and create psychologically safe environments in which employees feel confident they can speak up about issues or mistakes without fear of humiliation or retribution.

If you want to better understand the behavioural risk profile of your organisation, and how to create a culture that supports desired behavioural outcomes, talk to our Culture Transformation Team to find out how with most prominent cases in Financial Services, Automotive and Healthcare. Despite increased regulation and sophisticated product frameworks the regulator has imposed billions of fines for conduct from there.

Read our latest Article on ‘Closing the Integrity Gap: How to Build a Healthy Culture’ here.

Culture Risk Assessment

The Willingness Awareness Matrix is a data driven approach to culture risk assessment. It enables Boards and CEO’s to understand the behavioural risk profile of their organisation and to identify priority areas where behaviour or conduct risk is highest and intervention, beginning with comparative and causal analysis, should be considered.

Our Culture and Integrity team will work with you to develop a mitigation strategy so you can create a healthy cultural environment which supports integrity-based decision-making at the systemic level, and will also enable you to measure progress. While addressing emergent behavioural risk, healthy cultures tend to generate performance improvements that increase stakeholder engagement and deliver sustainable commercial benefits over the long term.

Improve conduct and decision making

Why do good people make bad decisions? This intervention works on improving the quality of decision-making at both the individual and organisational level, particularly for those clients that operate in a regulatory context. By using the data from the culture risk assessment, we will create behaviours and support governance and processes that reduce “blind spots” and improve judgement in environments where compliance and legal standards need to be adhered to.

Healthy cultures have integrity-based decision-making at their core. We will show you how to reduce “group think”, encourage “speak-up” and open dialogue, and raise levels of stakeholder engagement and organisational performance as well as mitigating behaviour and conduct risk.

Leadership
& Culture

How is your organisation’s leadership influencing your organisation’s culture?

Is leadership style increasing or mitigating behavioural risk? What leadership behaviours encourage a healthy culture? We work with you to answer these questions and provide solutions, using data driven interventions, that enable your leaders to understand the impact of their leadership style as individuals and in aggregate.

We use robust psychological measurement tools that allow leaders to reflect on their dominant way of thinking and how their individual style and behavioural preferences are perceived by others. We are able to show you what “cultural footprint” your leaders are creating through the way they motivate others to think and act. Your leadership can also understand their individual stress profiles and coping mechanisms and how this manifests in behaviours and decision-making. We can then work with you to develop and embed strategies to achieve greater alignment between your actual and desired leadership impact and culture outcomes.

Nicola Foster

Thomas Scheiwiller

Better Business Governance & Compliance

Supervisory and Executive Boards are increasingly under pressure from investors, regulators and the market to ensure their governance is fit to drive long-term value creation.

Recent examples in the automotive, banking and healthcare industry demonstrate that the bar of stakeholder expectations is rising. Business leaders must step up to respond to the growing expectation gap and embrace principles and practices of better governance, compliance and sustainability.

Most organisations are skilled at managing short-term value. However, Boards and Senior Leaders need to understand the risks and opportunities of long-term value creation and embrace principles and practices of Better Business Governance.

Talk to our solution centre team to learn more about generating value through aligning their business operations with the principles of sustainability, sustainable and clear goals and objectives.

Sustainable governance

The fiduciary role of Boards is changing. Increasingly long-term value creation and sustainability of the business are more important than short-term shareholder value. New regulation requires Boards to embrace new responsibilities, that come with a need to acquire new competencies and knowledge. Institutional investors are applying pressure to take a wider view on corporate responsibility and value creation.

Regulators, Investors, Consumers and the wider public are pushing for a more holistic Business model based on sustainability.

This has lasting impact on:

The selection of Board members and CEOs (Competences, credibility)
Organisational Purpose
Business Objectives and

Senior Compensation

Our Sustainable Governance solutions address the needs of the changing regulation and provides Boards und Executives with the support to direct and implement an effective agenda for long-term value creation and sustainable business success (Purpose, Strategy, Compensation).

The journey starts with a workshop of Board/ Senior Executives to define the Strategic Materiality Agenda

Based on our risk-based approach, Senior leaders will detect potential blind spots and build a collective view on the material issues and risks to be addressed in building a sustainable business agenda

All material risks will then be examined and turned into a business case to evaluate

Potential commercial impact,
Cost benefit of mitigation,
Impact on growth and margin or
Combination of KPIs relevant to the business

Output is a shared strategic materiality agenda for the Board and CEO to implement.

Sustainability Roadmap and Implementation

The Sustainability Agenda will then be turned into a roadmap embedded into strategy for the next 3- 5 Years.

The board will be involved in monitoring the implementation of the identified sustainability agenda.

Culture and compliance

Compliance has to be understood very broadly and is much more than just ‘legal compliance’ or ‘regulatory compliance’. Of course, the latter are non-negotiable, but compliance does not stop there. Businesses have to cope with not only coded law, but also additional requirements from clients and investors which may go well beyond the law. Examples can be:

Key clients ask their suppliers to sign a Supplier Code of Conduct and reserve the right to audit them against it.
Large index investors have specific requirements when they engage with their investees in 1:1 discussions.

And businesses may have decided about self-commitments which relate to the values and principles in their Integrity Code which may go even further. As an example, commitments to the 10 principles of the UN Global Compact are very common. Or more specifically, a number of businesses have publicly committed to become Carbon-neutral within the nest 3 or 5 years. In this sense, Compliance or Integrity should no longer be considered as corporate functions, but rather as an desired outcome.

Our approach to managing Integrity & Compliance includes the coded law (‘must’), the market requirements (‘should’) and the self-commitments (‘could’) in a holistic picture, from Governance to Strategy, to Risk, to Metrics and Performance. It takes into account best practices, regulatory guidelines, behavioral economics and cultural insights and is customized to a specific business.