Five Steps to Guard Against Cultural Risk

Three Levels of Culture
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Gandhi Heryanto
Management Consultant, Indonesia

Five Steps to Guard Against Cultural Risk

A proper corporate culture can be a competitive advantage of a company and usually is considered a very important asset. But sometimes it can also become a liability and cause a cultural crisis. A cultural crisis is a significant incident that indicates a problem with attitudes and behavior in the workplace.
Some examples of such cultural crises are:
- Sexual harassment
- Gender discrimination
- Financial mismanagement
- Deceiving customers
- Not paying attention to safety
- Bad behavior in the leadership ranks.

Clayton mentions five steps to assist companies in starting with building cultural awareness capabilities:
1. Secure explicit commitment from the top.
The main contributor to the success of any effort to maintain corporate culture is the commitment of the top executives.
2. Charter a cultural vigilance team.
The culture guard team could consist of the heads of communication, law, human resources, diversity & inclusion and risk management departments along with representatives from various business lines and organizational levels.
3. Define (or refresh) your behavioral expectations.
Determine the values and behavior expected by the organization. Conduct periodic assessments whether they are still in line with organizational goals.
4. Design an ongoing cultural vigilance strategy and act on it.
With your Cultural Vigilance team, determine how you will monitor culture. Adopt cultural diagnostics that can be continued regularly, and a routine review process that leads to immediate action on known issues.
5. Weave culture into strategy development and annual planning processes.
Strategy and culture must often be evaluated, and together, as a symbiotic driver of strong business performance.
Using the 5 steps above, a company can realize and maintain its culture and prevent a cultural crisis.
Source: Sarah Clayton, "6 Signs Your Corporate Culture Is a Liability", Harvard Business Review, December 2019.

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