The Covid-19 pandemic has focused attention on a subject that has long fascinated communicators and HR professionals: Organizational culture and identity. What drives cultural change? Is identity forged only from the top down? How have changing employee expectations caused us to view organizational identity in different light?

These are some of the questions we asked Alexandra Wood, Senior Solution Leader and Associate Partner at McKinsey & Co. during one of our recent Thought Leader webcasts.

Alexandra co-authored an article for the McKinsey Blog titled “Building Organizational Identity from the Bottom Up.” Here’s what she had to say.

We usually think of the development of organizational identity as a top down process. Leaders define purpose and mission and communicate it down to the rest of the organization. Voila! A new organizational identity somehow emerges. You have a very different perspective, don’t you?

Alexandra Wood (AW): There’s this notion that if you put a strategy down on paper, if you have a purpose statement on a website, if you say this is how we want our organization to behave, it will just get done. But actually, when you think about it, it’s a matter of taking that broader vision and translating it into the everyday actions that every single employee takes regardless of her role.

Ideally, that strategy, that organizational vision should be guiding every decision that every employee makes – and most importantly, those employees on the front lines interacting with customers or working on the assembly line.  And the way to do that is to engage employees from the beginning, so they see how their work relates to the vision, to the strategy. We have a lot of cool technology now that helps us do this in a way that we weren’t able to even a few years ago.

Have you observed a change in employee expectations, especially among millennials? And what happens if organizations don’t meet those expectations?

AW: I’ll answer your second question first. If organizations don’t try to build organizational identity from the bottom up, they are going to lose the talent war. Employees, especially those with in-demand skills, have options now. You will go somewhere where you feel valued, where your opinion matters, and where the organization’s purpose aligns with your own sense of purpose.

And, yes, expectations are changing. For many people, the pandemic has brought on a bit of an existential crisis. Purpose matters more than ever! Perhaps they want more flexibility in where and how they work. And they want to make sure that what they do on the job, which is a huge part of their lives, matches their own personal sense of identity.

Can you describe in more detail how this process of building organizational identity from the bottom up works?

AW: I would say it involves a couple of things. So, the first is an incredibly basic one, but it’s literally just articulating what your strategy is. We refer to this as an organization’s value agenda: How do you create value as an organization? Then you distill that down into key initiatives that you’re going to pursue.

And, then, the second thing is making the value agenda transparent to everyone in the organization. It’s amazing how often many employees have no knowledge of their organization’s strategy, its value agenda. If you don’t communicate the value agenda to employees, they will focus on what they need to get done on a day-to-day basis, with no idea of how that work connects to the larger organizational strategy.

In our courses, we emphasize the key communication role of middle managers and supervisors. Research shows that they are the most credible, trusted communication link in an organization. What role should they play in making the value agenda come to life for employees?

AW: It’s just so important to help middle managers have a dialogue about the organization’s value agenda with their direct reports. At McKinsey, for example, that role is often played by an engagement manager, who places the client project into a broader context for the team working on that project. Fundamentally, the engagement manager is facilitating two-way communication.

The notion of building organizational identity from the bottom-up makes so much sense – can you give us an example of where it’s worked?

AW: My favorite example is a manufacturing client I worked with. This company had been going through a cultural transformation over the past two years. Placing posters in the break room simply wasn’t cutting it – employees felt no connection with the transformation process. The CEO recognized that success depended on the average front-line employee coming up with new ideas, better ways to operate.

The company took two major steps. First, they adopted technology that both helped explain the transformation goals to every employee and then helped them start shifting their daily work to align with those goals. It also included a simple, direct way to submit suggestions on making improvements in the day-to-day work.

The second step was to celebrate the employees who actively engaged in the transformation process. In essence, the company created an influencer network of employees who championed the new behaviors and helped bring along their colleagues.

The results were quite striking. Employees helped cut costs, make processes more efficient, and perhaps most importantly, felt central to their company’s success. A lot of what seemed like little things added up into much bigger outcomes. And the change in culture was real! The employees had helped create a new organizational identity.

Link to article

Alexandra Wood partners with clients to successfully transformation their organizations using digital and analytics platforms. She currently leads Inspire —a digital platform that helps employees build new habits in the workplace using advanced analytics, behavioral science, and personalized content.

Posted by Carl Zangerl, Faculty