The 2022 State of Culture Report is the culmination of a year of research on a global scale of 170 respondents across local, national, and global organizations. From this research, the team extracted key insights into the aspects of organizational culture and climate that link to a variety of performance outcomes as well as the practices that drive results in the day-to-day. 

 Some key findings from the study include: 

• Only 57% of respondents in senior leadership roles reported that their organization cultures are evolving rapidly enough to stay competitive.
• 70% of respondent organizations reported outsourcing at least some HR functions, and it seems that outsourcing in the HR space will continue to grow over time. .
• Organizations that reported a large number of resignations said it was mostly due to inadequate pay/benefits and a lack of ongoing investment in employee skills.

 For more insights to read the 2022 State of Culture Report here. 

Stay up to date with future State of Culture surveys and reports here. 

If you have questions or comments about the study or the report please email info@gothamculture.com.  

 About gothamCulture 

gothamCulture is a management consulting firm that draws on our associate’s comprehensive expertise and experience in the areas of culture, leadership, and people strategy to provide innovative solutions and client-service excellence. Our work is guided by our deeply held shared values, including a commitment to each other and our clients, unwavering integrity, the maniacal pursuit of excellence, relatable expertise, and authentic community. For more information, visit www.gothamCulture.com. 

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July 7, 2021

New York, NY – gothamCulture and the Global Organizational Culture Institute (GOCI) released the first annual 2021 State of Culture Report on July 7, 2021.

The 2021 State of Culture Report is the culmination of a year of research on a global scale of 241 respondents across local, national, and global organizations. From this research, we extracted key insights into the aspects of organizational culture and climate that link to a variety of performance outcomes as well as the practices that drive results in the day-to-day.

Some key findings from the study include:

• Having a common culture definition and leadership involvement in setting the definition can have a significantly positive impact on organizations’ performance.
• It is valuable for organizations to invest in the appropriate assessment of culture in order to proactively shape it to meet the needs of their situation and achieve performance.
• It is important for organizations to demonstrate serious consideration and thought when it comes to social justice issues as it significantly impacts their performance.

For more insights to read the entire 2021 State of Culture Report.

Stay up to date with future State of Culture surveys and reports.

About gothamCulture
gothamCulture is a management consulting firm that draws on our associate’s comprehensive expertise and experience in the areas of culture, leadership, and people strategy to provide innovative solutions and client-service excellence. Our work is guided by our deeply held shared values, including a commitment to each other and our clients, unwavering integrity, the maniacal pursuit of excellence, relatable expertise, and authentic community. For more information, visit www.gothamCulture.com.

About the Global Organizational Culture Institute (GOCI)
Founded in 2020, the Global Organizational Culture Institute (GOCI) is dedicated to conducting research on the topic of organizational culture in order to understand what factors drive performance outcomes. GOCI’s research serves as the foundation for the annual State of Culture Study and associated reports. Learn more at: www.globalstateofculturestudy.com

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To start, what are covert processes?
Unlike overt processes, which can be observed, covert processes are hidden, unspoken, and unacknowledged. They are the collective unconscious dynamics that exist within organizations that regularly impact the interactions and responses of people within the organization. If change management leaders do not account for them in their plans, these processes or dimensions can impact the workflow and stand in the way of achieving organizational goals and change objectives. It is important to know that covert dynamics occur outside of our awareness and you and your employees can be engaging in them without knowing it.

The 6 dimensions of change
Marshak lists six dimensions of change: Reason, Politics, Inspirations, Emotions, Mindset, and Psychodynamics. The first is the only overt dimension out of the six whereas the latter 5 are covert.

1) Reason
Reason is the only overt dimension and shows up when organizations are making the case for change. It is the rational and logical process organizations follow to come up with a compelling reason for why they need to implement a change. Today, reason is paid the most attention to when planning for organizational change. Organizations understand that they need to make a change to survive and remain competitive.

This of course is a very important part of any change initiative to get buy-in. However, solely emphasizing on it, negatively impacts the change process. This tunnel vision can reduce common and expected resistance to irrationality, when in fact it is the result of other dismissed yet valid and powerful forces. Therefore, it is important to account for the five other covert dimensions that can hinder any well thought out change effort.

2) Politics
The covert dimension of politics refers to the events in which individuals, teams or work units work towards their own interest. While this kind of behavior is deemed inappropriate in work environments, it is something that is bound to occur. It might even be the case that the change effort itself was initiated to fulfill a groups’ or maybe a leader’s own interest. Therefore, it is quite necessary to anticipate what political dynamics might surface when managing a change and think through the different courses of action to take to address them.

3) Inspirations
Marshak describes Reason as the head and Inspirations as the heart. Making the case for change rationally is not enough to get the ball rolling; people need to be inspired to be bought in. So change efforts need to be accompanied by value-driven vision statements that evoke inspiration; the third dimension. It is important to look beyond the numbers and logic and inspire people to do ‘better’ or ‘be more impactful’ or ‘make a difference’. This covert dimension of organizational change can be quite powerful. When unaddressed, it can be a missed opportunity for moving change along more smoothly. Moreover, reason might at times clash with and oppose unspoken yet existing values within your organization if both are not addressed, which in turn can hinder the change effort.

4) Emotions
With any change comes a normal and predictable wave of emotions across the organization. Some of these emotions can be acceptance or excitement, but they can also be denial, anger, fear, or sadness. More often than not they are expected to be hidden and unexpressed as they are considered inappropriate in the workplace. However, it is important to engage the workforce and allow them to express their sentiments and emotions. Unexpressed emotions can impact the change effort and if they remain unacknowledged, they can lead to inefficiencies, delays, and maybe even sabotage. Therefore, it is just as important to make space for these emotions as it is to reiterate reason.

5) Mindset
Marshak describes the mindset dimension as the unexamined assumptions, beliefs, and premises that people have and use to interpret the world and in this case, organizational change. These mindsets are covert frameworks that we are generally not aware of having. Mindsets vary from one person to the next and can impact how change efforts within an organization are perceived. Mindsets limit the perceived possibilities of the outcome of change. Moreover, these perceptions significantly vary from one person to the next, so there is a lack of uniformity in how the change is being perceived. Not addressing this dimension can ripple into the other dimensions such as emotions and in turn negatively impact the change process. Therefore, change management includes challenging these mindsets and making them more overt, because it is only by doing so that people can recognize the limitations of their assumptions and entertain alternative possibilities and outcomes of the change.

6) Psychodynamics
The psychodynamic dimension, which includes our unconscious reactions to change, is the most covert out of all dimensions… and the most taboo and off-limits topic to bring up in a workplace. Yet, it can greatly impact any change effort. Psychodynamics might show up as defense mechanisms such as avoiding the whole change effort, arguing and fighting about it, shutting down emotionally transferring feelings for certain figures in your life to your managers or colleagues etc… and a lot of these dynamics might actually be related to other parts of your employees’ lives outside of work. While this might seem like a sensitive topic that is beyond the scope of work, it still shows up and impacts the work. So, there is something to be said about acknowledging it. I am not suggesting setting up group therapy sessions but acknowledging that these forces are at play. Acknowledgement of your own psychodynamics can help you as leaders identify how they impact your interaction with the change and in turn model to your people how to approach it.

I realize that these dimensions are relatively broad and can be dealt with in several different ways. How you choose to integrate these six dimensions into your change analysis will be highly dependent on time, resources, and the nature of your organization, leaders, and people. But, if you set the intention to go beyond Reason and address the covert Politics, Inspirations, Emotions, Mindset, and Psychodynamics, you are more likely to achieve a successful change.

Reference: Marshak, R. J. (2006). Covert processes at work managing the five hidden dimensions of organizational change. Berrett-Koehler Publishers.

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I recently attended an interactive seminar on change leadership with a group of 30 or so organizational development experts and HR leaders to explore how real-life organizations will need to address the challenges of returning to the office (or not). We huddled up and discussed actionable change management plans we would implement to make the transition successful. My colleagues in the virtual room had brilliant ideas to share, and it was evident that while there was agreement around some aspects of the change management plans, people had very different ideas of what needed to be done. And they all seemed like really good ideas.

So the first assumption to keep in mind when putting a change management plan together is that there is no one right way to do this.

The past year has been a breeding ground for experimentation. Some actions were taken on a hunch and while some of them proved to be effective, others completely backfired. To start, you need to figure out what it will take for your organization to thrive. It might be a hybrid model but it also might not be. If the hybrid model is for you, it will look very different than it would at other organizations.

Now is the time to gather the learnings. In order to figure out what will work for your organization, you need to identify what has worked so far.

You need to take stock of everything your organization did to manage the pandemic. Here are some of the big themes to explore:

Leadership & Management
A key if not the key task of leadership is to set vision and direction. It will be important to explore your employees’ perceptions of how responsive and proactive your leadership team was in pivoting and setting the direction and strategy for change. While it is important to assess whether or not people found the outcomes of the strategy to be successful, it is equally important to see if people trusted leadership to take action.

Middle management seemed to be a common clog in the execution of many change management plans this year. There were complaints about middle management’s inability to execute on the vision set by leadership for the changes. Therefore, it will be important to assess how well your management did in rolling out plans and determine how to set them up for success.

Technology
Technology is by far one of the most important factors to explore as you assess your organization’s performance. Understand what technology-enabled collaborative teaming, open communication, and efficient work. Ask your employees about what they found to be the most useful, what was detrimental and what was missing. Technology should be a top priority when it comes to budgeting for this change.

Mental Health & Wellbeing
Mental health issues were up by 102% to 305% (Total Brain’s July Mental Health Index) this year, with an overwhelming number of complaints around burnout and fatigue. If your organization offered support services, now is the time to assess how useful your employees found them and what else needs to be done to ensure their wellbeing. Ask employees about their concerns when it comes to returning to the office and gather their suggestions on how to manage them.

Workload
Based on our experience with different clients, this year was one that challenged everyone’s ability to draw the line between work and personal life. We heard over and over again that people worked more than usual and were overwhelmed by the work. It is important to identify what balance needs to be struck and boundaries need to be established between achieving organizational objectives and managing workload.

Communication
When it comes to a change of any sort, communication can really impact how smooth of a process it can be. Aside from exploring how effective communication tools were, it is important to assess the perceptions employees had of leadership’s communication. Ask your employees about how they felt about the frequency, clarity, consistency, transparency, and methods of communication shared with them.

Collaboration
The shift to remote work pushed people to explore new means of collaboration. While it did pose some challenges, it also made it clear that the team can work together virtually, given the right support. Learning the specifics around effective virtual collaboration will be key in determining your direction for change.

As you assess your organization’s performance, you will notice that a lot of these themes ultimately tell you about your organization’s culture. Think about these and potentially other big themes in relation to your organization and flesh out the specific questions you need answers to. Most importantly, try to get as close as possible to the ‘why’.

Tips from Pivoting Organizations

This past year, gC conducted its first ever global State of Culture study to explore how aspects of culture impact organizational performance during the pandemic using our proprietary Culture Mosaic. The Culture Mosaic is a framework that enables us to understand and communicate culture in ways that ensure organizations are equipped to manage change successfully.

While it is of utmost importance to understand your own organization’s performance, there are a couple of key learnings we extracted from our research you can use to set your own strategy. Based on our research, here are some of the key practices that impacted the participating organizations’ abilities to thrive and pivot during times of change:

1) Reassessing company values and having company-wide conversations around how values can be lived out across scenarios of change

2) Defining culture by being clear about how things are done at the organization and the behaviors expected of its people while tying it to the values

3) Reassessing the culture strategy or investing in setting one by:

• Assessing how environmental changes will impact business
• Aligning the culture strategy with the business strategy
• Having a common definition and getting leadership involved in setting it
• Encouraging concepts such as adaptability, collaboration, leadership engagement and openness, vision setting, communication strengthening and encouragement of a growth mindset, trust in employees, and transparency
• Ensuring it incorporates flexibility and agility in a way that makes sense to them
• Becoming more customer-centric – whether they are internal or external
• Defining what collaboration would look like in the organization across scenarios of change and identifying ways and tools to invest in to enable collaboration and achieve success

4) Investing time in setting a capability development needs assessment and strategy

5) Reassessing competency frameworks to ensure they are aligned with changing needs

6) Developing reliable culture assessment and measurement strategies and procedures

7) Contextualizing issues such as social justice to organizations’ different regions of operation

Identifying what has worked for your organization during this past year and incorporating it into these different practices can help set you up for success to return to the office and weather any other change.

Learn more about the Culture Mosaic.

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Difficult, yes. Impossible, no. Any number of internal or external factors can shape the culture of an organization at varying rates. Catalysts such as mergers and acquisitions, adoption of new technologies, the transition of a key leader or leaders, new government regulations, or an unanticipated global pandemic can all force people to adopt new behaviors to adapt the way work gets done in order to survive and compete.

The COVID-19 pandemic affected everyone in varying ways and took many organizations to task in short order to shed long-held beliefs, assumptions, and ways of working to thrive in the new environment. Many of these changes would have been unheard of prior to the forcing function of the pandemic. Take, for example, remote work. Many organizations would have balked at the idea of introducing work from home policies even partially before the pandemic. This external catalyst not only forced many businesses to adapt but it forced them to figure out how to do it at speed and for the long-term. After many months of operating in this new way, many of the employees in those same organizations are wondering why remote work policies would need to revert to a full-time office schedule in the future, and rightfully so.

Take, for example, Kissflow, a SaaS company based in Wilmington, Delaware. Like many businesses, Kissflow was forced to adapt to full remote work which there were reluctant to do prior to the forcing function of the pandemic. Now that the beliefs and assumptions about remote work have been shattered by the reality of the situation and the organization’s ability to thrive in this environment, they have introduced an entirely new work concept they call REMOTE+ into the organization. Employees work remotely from wherever they would like and each team meets for one workweek per month in the office to capitalize on the benefits of collaborating in person with the company footing the bill for accommodations while employees are in town.

The pandemic example is particularly poignant because we have all experienced it in one way or another over the last year. When forced to make a disruptive change, we adapted. Some organizations were better positioned to make these necessary changes than others because their cultures valued and fostered agility and resilience. Others struggled and some still may cease to exist due to their inability to pivot rapidly.

Regardless of the impetus for the change, internal and external factors will continue to require organizations to evolve their ways of working in order to meet the day. There is no denying this. Naturally, some organizations will be better positioned and better capable of evolving how they work than others. Those leaders who understand the value of creating the organizational muscles of agility and resilience will best mitigate the risks associated with disruptive requirements to change.

Some B2B providers utilize their ability to exercise these muscles of agility and resilience to create new business opportunities for themselves by supporting clients who are less able to adapt quickly during times of great change. Girish Rishi, CEO of Blue Yonder, provides supply chain solutions to clients globally. During the pandemic, his organization developed rapid COVID product offerings to help deliver essential medical goods to customers like Walgreens. By providing Supply Chain Risk Response, Blue Yonder was able to provide value to clients by supporting clients who were struggling to adapt as rapidly as the situation required.

The pandemic of 2020 had disruptive effects on REI as well. CEO Eric Artz told employees via a video call last September that the company would be selling its brand-new, never-occupied headquarters building in Bellevue, Washington which was subsequently purchased by Facebook. The massive impact of the external disruption caused by the pandemic forced executives to reexamine all of the beliefs and assumptions they held about the business.

Because we can’t always anticipate the disruption that will rock us to our core, the challenge becomes developing a culture that values developing agility in its people so that they are ready and able to flex to survive and thrive no matter what the challenge. This need can be a tough ask as we constantly work to manage the day-to-day requirements of getting the job done though. How do leaders meet the needs of today while also being intentional over the long-term to build these muscles into the fabric of the organization? These muscles may not need to be put to use all the time, but they may make or break an organization when the going gets tough.

This article originally appeared on Forbes.com. 

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