Thrive

Chapter 1

Mind the Gap

Introduction: The Leadership Blind Spot

It's all too common for senior leaders to believe their organisation's culture is strong and aligned with its values. They see a thriving, innovative, and collaborative environment, or at least, that's what they expect. However, when you move down the hierarchy, the lived experience of employees can tell a very different story.

This disconnect between the intended culture and the experienced culture is what we call the 'culture gap'. It's a leadership blind spot that can undermine strategy, hinder performance, and lead to disengagement at all levels of the organisation. For many leaders, the gap is a slow, creeping problem that they only become aware of once it's too late.

The role of the senior leader is not only to set the strategic direction for the organisation but to ensure the organisation's culture is supportive of their strategy and close any cultural gaps by continuously assessing and realigning the actual culture with the desired one.

The Gap Between Vision and Reality

Culture is not just what's written in policy documents or spoken in meetings. It's the unwritten, everyday behaviours that employees experience. Leaders may believe they've created a culture of trust, yet their employees may feel silenced or fearful of raising concerns. This disconnect is what drives organisational dysfunction and disengagement.

A Common Misalignment of Culture

A telling example comes from Uber in its early years. Under the leadership of founder Travis Kalanick, the company's stated values included innovation, customer obsession, and meritocracy. Yet the reality was a toxic workplace where employees felt pressured to cut ethical corners to meet performance targets. The gap between the values espoused by Uber's leadership and the culture lived out by its employees was vast, eventually leading to public scandals and Kalanick's resignation.

Wells Fargo

Similarly, Wells Fargo's leadership believed they were fostering a customer-centric culture. However, intense pressure to meet aggressive sales quotas led employees to open fraudulent accounts to meet targets. The leadership's vision of putting customers first was completely disconnected from the behaviour driven by the organisational incentives in place, leading to one of the largest banking scandals in recent history.

In both cases, leaders were blind to the gap between their intentions and the actual culture. The consequences were severe, including damaged reputations, legal penalties, and a breakdown of trust.

How the Culture Gap Affects Performance

Organisations that fail to bridge the culture gap are often plagued by poor performance, low morale, and high employee turnover. When employees see a disconnect between what leaders say and what they do, it breeds cynicism and disengagement.

Employee Engagement

Studies by Gallup reveal that only a small fraction of employees feel truly engaged at work, and a major factor is the misalignment between company values and leadership behaviour. If the CEO talks about innovation but employees are penalised for taking risks, the result is a disengaged workforce, less creativity, and ultimately lower productivity.

Performance and Trust

The 2017 Edelman Trust Barometer showed that trust in business is eroded when there's a disconnect between what leaders say and what employees experience. Trust is a key driver of performance, collaboration, and long-term success. Without trust, employees are less likely to invest themselves fully in the organisation's mission, and high performing teams become rare.

The Hidden Costs of a Culture Gap

The culture gap often leads to higher turnover, as disengaged employees leave for organisations where they feel more aligned. The cost of replacing employees, not to mention the loss of institutional knowledge, can be significant. Furthermore, companies with a large culture gap are more prone to unethical behaviour, as the lack of clarity and alignment between values and actions creates grey areas.

The CEO's Responsibility: Closing the Gap

Recognising and closing the culture gap is a senior leader's responsibility, and it cannot be delegated to HR or middle management. The CEO must take full ownership of both the strategy and the culture of the organisation. Here's how to do it:

Awareness: Stepping Outside the Leadership Bubble

Leaders often have a skewed perception of their organisation's culture because they're not exposed to the day-to-day experiences of employees. To gain an accurate understanding, they must create opportunities for honest feedback and open communication. This might involve:

 Anonymous employee surveys that ask tough questions about how employees view the culture.

 Focus groups that allow employees from different levels to candidly discuss their experiences.

 Cultural audits conducted by external consultants who can provide objective insights.

By actively seeking out this feedback, leaders can pinpoint the areas where the culture is misaligned with their intention.

Action: Bridging the Gap with Intentional Leadership

Once leaders become aware of the gap, the next step is taking action. This doesn't mean an overnight overhaul of the organisation, but rather targeted, incremental changes that realign the culture with the desired values.

For example, if the culture gap reveals that employees feel pressured to prioritise profits over ethics, the leader might need to rethink performance metrics and incentives. Similarly, if employees report a lack of psychological safety, leadership must focus on building a culture where open dialogue and feedback are encouraged and valued.

Consistency: Living the Values Daily

Leaders must model the behaviours emanating from the values they want to see. This means leading by example and consistently reinforcing the desired behaviours. If integrity is a core value, the leader must be transparent about both successes and failures and ensure that the same level of accountability applies to everyone.

The most effective leaders close the culture gap by making values-based decisions at every level, from the boardroom to individual teams. This consistency builds trust and creates an environment where employees feel secure in the culture being developed.

Tools for Identifying and Bridging the Gap

To effectively close the culture gap, leaders need actionable tools that provide continuous feedback and accountability. Some methods to achieve this include:

 Employee Surveys and Feedback Mechanisms: These are essential for gauging how employees truly feel about the culture. The questions should go beyond satisfaction and delve into trust, alignment with values, and day-to-day experiences.

 Cultural Audits: Bringing in external experts to conduct cultural audits can provide an unbiased assessment of the gap between leadership's vision and the actual culture.

 360-Degree Feedback for Leaders: This allows leaders to understand how their actions are perceived by others in the organisation, offering insights into whether they are effectively modelling the desired culture.

 Cultural Performance Metrics: Linking cultural outcomes to measurable business performance ensures that culture isn't seen as an abstract concept but as a real driver of success.

The Cost of Not Minding the Gap

Ignoring the culture gap comes with serious consequences, both immediate and long-term. These include:

1. Higher Turnover: Disengaged employees are more likely to leave, resulting in higher recruitment and onboarding costs.

2. Decreased Performance: Without a cohesive, aligned culture, employees are less productive and less collaborative, which impacts overall performance.

3. Reputational Damage: As seen in the Post Office and Wells Fargo examples, organisations with significant culture gaps often face public scandals, damaging both their reputation and their bottom line.

The Post Office Scandal

The recent scandal surrounding the UK Post Office is a prime example of how a culture gap can have devastating consequences. Senior leadership failed to listen to the concerns of sub-postmasters, many of whom were wrongfully prosecuted for fraud due to faulty IT systems. This scandal arose from a toxic culture where fear and a lack of transparency prevented crucial feedback from reaching the top. The Post Office leadership's failure to bridge the culture gap led to years of suffering for innocent workers and one of the most significant miscarriages of justice in recent corporate history.

Bridging the Gap: A Leadership Imperative

Closing the culture gap requires more than just awareness; it demands action and commitment from senior leaders. Here are some steps to begin bridging the gap:

 Create Transparency: Build open communication channels where employees feel safe to share their concerns without fear of retaliation.

 Align Values with Behaviours: Clearly define the behaviours that reflect the chosen values, and make sure these behaviours are visible and rewarded.

 Embed Values into Every Process: Ensure that hiring, promotions,...