The Banking Royal Commission interim findings and the Cricket Australia report all point to one common issue that organisations need to take heed of, if you let poor cultures fester it’s at you own peril.

Our banks have been the pillars of our society, charged with protecting and growing our collective wealth and national economy, and they now have a daunting task ahead as they try to repair the reputational damage, and the erosion of trust and confidence with their customers.

Cricket Australia is charged with promoting and protecting our national sport, being role models and growing the next generation of sportsmen and women. The culture has been described as arrogant, controlling and dismissive of its values, even tolerant of bullying and ostracising tactics. It too has a long road ahead to gain back the respect and trust of the fans.

Unfortunately, these examples are not isolated and history has shown that organisations who don’t focus on building the right culture suffer in the long term. Many of us have witnessed disappointment and frustration with a company’s culture making it difficult for people to do their best work and making everyone feel like a cog in a machine rather than valued talent.

A poor culture is a bit like smog that rolls in over a city, blanketing everything in a dirty haze and preventing the sun from coming out. Years ago I had the good fortune to live in Hong Kong for a few years. I was mesmerised by Hong Kong’s natural beauty which I had missed when visiting as a tourist. On a clear day, the harbour and beaches were spectacular, rivalling the Mediterranean. But then the wind would change direction and smog would envelop the city, resulting in respiratory conditions and dirty dust over everything. This is what happens when toxicity creeps into a culture. It sweeps over silently and unnoticed, slowly covering the vibrancy and making it harder to move freely.

Why are more companies not working harder to build great cultures that people are beating down the door to work in? The focus on quick results, improved shareholders returns, and short-term thinking are just a few of the influences that drive the current issues facing many organisations. There is substantial evidence of the link between great cultures and superior organisational profitability and growth. Yet more effort and investment is often.

put into other strategic (or should I say tactical) priorities that are seen as more important. Michael Henderson in his great book ‘Above the Line’, says that “culture has more influence on organisational performance than strategy. Strategy is important, but aligning the culture to the strategy is even more important.”

Whilst the culture is demonstrated through and is the responsibility of all employees, it is the leaders that can drive the biggest change through their own behaviours and what they tolerate or refuse to walk by. And this change needs to start at the top. It is easy to blame the leaders when a culture deteriorates, but it is the CEO and the Board that sets the direction that manifests down the line.

In my experience, most leaders are well intentioned and doing the best they can on any given day. Leaders are just people and people are inherently flawed. Leaders like everyone else, have bad days, have personal lives that may be in crisis. They can get triggered into responding or behaving in suboptimal ways, which spills over into how they lead, what they encourage and what they tolerate. All of which influences culture. In my experience, when leaders feel confident, happy and self-assured, and are committed to the health, wellbeing and personal development of their teams, the company thrives.

In the course of my career, I have worked for both ends of the spectrum – some amazing cultures I didn’t want to leave, and some difficult cultures that made it hard to stay. The difference is in how it felt to work there and what I was inspired to achieve. The great cultures brought out the best in me and others. We were inspired to want to make the place better for all stakeholders. We innovated and found ways to deliver our improvements in rapid time. It became my friendship group, my support network, and my source of intrinsic reward. There was high energy, high trust, vulnerability and collaboration. Conversely, the poor cultures drove fear, unhappiness and protective behaviours. Blame and gossiping were the norm and information was withheld in order to keep the home team safe.

Utopia is a world where everybody loves their work, loves their workplace, and comes home at the end of each day feeling energised and challenged, valued and content. But we spend too much time at work for it to be anything less. The Dalai Lama says, “Our prime purpose in life is to help others. And if you can’t help them, at least don’t hurt them.” Our cultures should support this ethos and be looking for ways to help customers, help employees, help the shareholders.

Malcolm Gladwell in his book “Outliers: The Story of Success” says “Those three things – autonomy, complexity and a connection between effort and reward – are, most people will agree, the three qualities that work has to have if it is to be satisfying”. That’s correct for work but there are some other elements that are necessary if a culture is to be outstanding and take the business to the next level of performance.

There are lots of models, strategies and processes out there to improve your culture, but in my experience the solution is pretty simple. If you can build high levels of trust, communication and respect in an environment of constant learning, the rest sorts itself out.

Trust – trusting leaders and employees to do the right thing at the right time in the right way.

Respect – Respecting leaders and employees enough to treat them like intelligent adults and share information freely, including the detail of the vision and strategy.

Frequent and two-way communication where feedback is heard and actioned.

There are multiple tactical initiatives that can sit underneath these elements to culturally align all systems, symbols and behaviours but at a high level, these are the fundamentals for a thriving culture. With these key ingredients, the positive behaviours that drive a company forward are safe to emerge. Once you have high trust and respect in the culture, you’ll get honesty and honesty means your people will always tell it as it is. When you have clear communication and respect, you’ll drive ethical behaviour and this means everyone will be doing the right thing even when no one is watching. With high trust and regular communication, you’ll see bravery and this means people will feel safe to call out risks and mistakes, and share vulnerabilities which is important for connection. All of these qualities are important in your employee base to drive the company forward delivering better outcomes for customers and shareholders. No process, system or quality control mechanism is completely foolproof so the best defence is having a robust culture that drives ethical, responsible behaviour, where people feel safe to raise issues and fix problems, where delivering exceptional customer experience is rewarded, and where people feel respected, valued and informed.

Our world is changing. Gone are the days where people took a job for life, when they waited to be told what to do, when the leaders were the authority figures who knew best. Nowadays, people want to think for themselves, do work with purpose and meaning, and look to their leaders to be inspired by their passion and authenticity. In this age of social media and peer feedback, companies neglect their culture at their peril. People want to work in great cultures and be proud of their employer and they don’t hesitate to share their positive or negative experiences broadly where customers and shareholders can read them. We’re also in an age where loneliness and poor mental health is at an all time high. A great culture is not just providing intrinsic reward and better customer outcomes, it’s also performing a social service.

As in the movie ‘Field of Dreams’, “If you build it, they will come”. Or more appropriately and specifically to the banks and Cricket Australia, if you build a great culture, they will come back. The best talent in the market will want to join you again, the right customers will want to do business with you, the fans will return, and you’ll be able to repair the damage, put this embarrassing period behind you and emerge even stronger.

As a senior leader in your business with an impact on culture, I’ll leave you with some questions to ponder:

Are you trusting your people to do the right thing in their own way and letting them get on with it?

Are you showing respect to your people by treating them like adults, valuing their expertise and feedback, and sharing information freely, including the detail of the vision and strategy?

How frequently do you communicate? Do your words match your behaviour? Are you regularly asking for feedback, listening without judgement, and taking it on board?

If you’re reading this and it has resonated, and you would like to discuss how to create a thriving culture in your business, I would love to hear from you.

Gladwell, M. (2008). Outliers: The Story of Success. Penguin.

Henderson, M. (2014). Above the Line. Wrightbooks.