Ep15 The Culture Fit Diversity Dilemma

We have probably all heard the well used phrase from Peter Drucker that "Culture eats Strategy for Breakfast", this podcast looks at the importance of culture for success, and the question of whether we should be assessing talent for cultural fit or cultural agility and what is the impact of assessing for cultural fit or values fit on diversity?

The term culture fit has been an increasingly contentious subject in talent assessment, however there has been a move towards culture agility for assessment for recruitment in recent years. In this episode, Amanda is being interviewed by Angela Malik to understand, what is cultural agility, why is it important, and how can we bring in recruitment practices to enable organisations to be more cognitively diverse and culturally agile?

The Chief Psychology Officer website is now available https://www.thecpo.co.uk/   Please like and follow Zircon for more podcasts and articles at https://www.linkedin.com/company/zircon-consulting-ltd/

To contact Amanda via LinkedIn: linkedin.com/in/amandapotterzircon
To contact Amanda via email: TheCPO@zircon-mc.co.uk

For more information about the BeTalent Values cards mentioned in this podcast please go to: https://www.betalent.com

Timestamps

Cultural Agility

·       00:00 – Introduction to Cultural Agility

·       00:43 – This could be a contentious issue…

·       01:19 – Culture is the word!

·       02:01 – What is Culture?

·       02:47 – Culture vs. Climate

·       03:58 – “Culture eats strategy for breakfast!”

·       04:36 – Effects of poor Organizational Culture

·       05:18 – $200 billion, gone in 5 years!

Building a Culture, for Culture

·       05:35 – When we get it right…

·       06:07 – Good Culture vs. Bad Culture

·       07:02 – A shared understanding

·       07:38 – We all need to be on the same page

·       08:35 – Core values on the bulletin board

·       11:31 – Do away with the values?

·       12:41 – Values for recruitment

·       13:33 – Change was in the air…

Diversity & Factionalism

·       14:42 – Selective hiring, undermines Diversity

·       15:33 – Strengths + Culture doesn’t always mix

·       16:04 – Culture Fit => Cultural Agility

·       16:42 – What is Cultural Agility?

·       17:23 – Silo Mentality

·       17:54 – Aspired Values vs. Actual Values

·       18:52 – The value of using Values

Just from looking at this next bit…

·       19:43 – Unconscious Bias

·       20:39 – Amygdala & Pre-frontal Cortex

·       21:45 – Similarity Bias

·       22:24 – Were they the right fit?

·       23:15 – First Impression Bias

·       24:32 – Contrast Effect

·       25:19 – Overcoming Bias in recruiting

·       26:29 – Hiring through Cultural Agility

·       27:59 – Summary of the list

This is right for you!

·       28:21 – We still believe in Strengths

·       29:22 – Curiosity may not kill the cat…

·       29:53 – The value of this Podcast

·   

Episodes are available here https://www.thecpo.co.uk/

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For more information about the BeTalent suite of tools and platform please contact: Hello@BeTalent.com

Transcript

Angela Malik: 0:05

Hello and welcome to this episode of the Chief Psychology Officer with Dr. Amanda Potter, chartered psychologist and CEO of Zircon. I'm Angela Malik, Client Relationship Manager at Zircon, and today we'll be looking at the topic of cultural agility and how it is defining the way we approach hiring as well as diversity and inclusion.

Dr Amanda Potter: 0:25

Thank you, Angela. I'm as usual delighted to be here, and I'm so pleased that we're continuing to research and publish these podcasts. Over the last few months, we've had a number of podcasts looking at diversity and inclusion. This one is quite a contentious podcast looking at the concept of cultural fit or cultural agility because many authors and many publications that you can see on LinkedIn and on the internet suggest that culture fit could undermine diversity and could be the enemy of creating a diverse environment. So what we'd like to do today is look at the importance of culture and the debate between cultural fit and cultural agility for talent acquisition, for recruitment, and for retention of talented employees. Culture can be kind of a buzzword in the corporate world. I completely agree. It's often mentioned, but also very often overlooked. It's one of those things where many people talk about the importance of culture, but then don't necessarily invest the time to understand the culture of the organization and the impact it has on retaining talent and on performance. But actually, culture is critical when considering whether a workplace is a good fit for you if you were applying for a new job and how they're going to feel when they get there. And culture impacts the environment or the climate of the organization. Why don't we start with defining what is culture? An organization's culture is basically its DNA. It's a combination of its values, its goals, attitudes, and practices. And in theory, if you ask any employee within the organization what is it like to work in that organization, people's views should be relatively similar. The experience of working in that organization from a cultural perspective, in terms of how they do business, should be articulated in a relatively similar way. So ultimately, the culture defines how people behave and treat each other, and it impacts decision making, risk taking, ideation, problem solving, and so on.

Angela Malik: 2:46

So, how is culture different from climate?

Dr Amanda Potter: 2:49

Climate is how someone feels to work in a culture or an environment, and it can differ for each of the people in that environment. We talk about psychological safety being climate rather than culture, because in a team, my perception of the team's psychological safety might be different from yours, Angela, because as the CEO, I might have a perception of what it's like to work in our organization. And as one of our managers, Angela, you might have a different perspective. So in theory, and I say in theory, culture is more standardized, and most people will have a similar perspective of the culture and how to do business. And the values in an organization often help to articulate the aspired culture, how they would like a business to be or to operate. Whereas, as I say, climate is about what is it like to work in the company, what does it feel like?

Angela Malik: 3:46

So culture is about shared values, goals, attitudes, practices, and climate is about how it feels to work in that space. Absolutely. So, as you know, I'm not a psychologist, but even I've heard the saying culture eats strategy for breakfast.

Dr Amanda Potter: 4:04

Yes, that's a very famous quote from the management consultant and writer Peter Drucker. This doesn't, of course, mean that strategy is unimportant, rather, that a powerful, psychologically safe and empowering culture is critical for organizational success.

Angela Malik: 4:24

I guess a strategy is only ever as good as its implementation, and that's why culture is so crucial.

Dr Amanda Potter: 4:31

I completely agree. So getting culture right is truly very important, and research shows that poor organizational culture will often lead to lower productivity, lower engagement, and lower performance. If you don't focus on culture, you're setting up the organization for failure. And what you can see is that it can create toxic environments where people are burning out or where people blame one another and they focus on the negatives, which can lead to poor reputation in the eyes of the customer.

Angela Malik: 5:07

And how bad can these consequences be?

Dr Amanda Potter: 5:10

Pretty bad. In fact, one study in the US revealed that poor culture was the cause of 58% of employee resignations and has cost the US economy over 200 billion over five years. So that's a very significant amount.

Angela Malik: 5:30

So looking at it from the other side, what can happen if we get culture right?

Dr Amanda Potter: 5:35

So some research by McKinsey in 2018 found that organizations with a high performing culture resulted in 60% increased shareholder return than average performance cultures. And in comparison to cultures that were ineffective and even toxic, those higher performing cultures were 200% better in creating shareholder return.

Angela Malik: 6:04

So how can you tell a good culture from a bad culture? How can you predict whether your organization's culture will perform well and have good results?

Dr Amanda Potter: 6:13

It comes down to a number of the topics that we talk about a great deal on this podcast, including inclusion, diversity, safety, authenticity, accountability, which is a future topic. There's a number of signs of a toxic culture when an organization is moving from good to bad. And some of the behaviors you start to see are blame, avoidance, risk aversion. And you may remember, Angela, from some of the earlier podcasts, we talk about the concept of functional stupidity, which is around people not challenging the status quo, blindly following rules and processes, and simply not being curious or asking questions.

Angela Malik: 6:57

I suppose it's important for everyone in the organization to have a shared understanding of what that organization's culture actually is.

Dr Amanda Potter: 7:05

Very true, because very often there is a gap between the aspired and the actual culture. So it's important that everyone is on the same page within an organization about where their culture is and where they would like to be. Often leaders have an ideal aspired culture in their head, which is reflected in the corporate values that are published on their website. However, the actual culture and what it's really like to do business within the organization can often be quite different.

Angela Malik: 7:38

So, how do you ensure that everybody's on the same page?

Dr Amanda Potter: 7:41

So, within Zircon, we start with the B Talent Values cards. These are actual physical cards in a box that you can order from us. And we use them in workshops and in single interviews with senior leaders to help us understand the experience of working in the organization and what is important to those leaders. It helps leaders articulate the difference between their aspired culture, what they would like the organization to be, like that they publish online and talk about, and their actual culture. It's also a great team exercise that helps people understand the difference between individuals' values around the table and why people focus on certain things or get upset about certain priorities being missed.

Angela Malik: 8:28

You've mentioned a couple of times about values already being published on company websites and those sorts of things. Don't most organizations have these values written down and communicated?

Dr Amanda Potter: 8:39

Yes, in fact, our research has shown that 76% of FTSE 100 and Fortune 100 have their values published on their website. And the most common value, I'm sure won't surprise you, Angela, is integrity. And it's important to these organizations for their external persona to appear like they are operating in line with their values. But the question is, what is it actually like to work there and how is business conducted? And as a result, how does it impact climate and how people feel? Can I give you an example? We were working with an organization which is a card services organization, and we were conducting a pilot with their global head of talent, and I asked that individual to identify their values using our card sort exercise. What I did is I gave her the 18 values cards and she selected the cards that she felt were the most important. So the language is around what cards are the most important to you, and she selected her five. I then asked her to select the five cards that really depict what it's like to do business in the organization. We then compared the two. And was there a big difference between the two? What was fascinating is that when she selected her five cards to describe the values that are important to her, so the things that she would like to experience on a day-to-day basis at work, she articulated that being bold, visionary, entrepreneurial, enthusiastic, and aspirational is truly important to her. And therefore, working in an environment where those five values are present would drive her personal success. I then asked her to explain the values that she selected for the organization, and she described the organization to be structured, proud, safe, compliant, and dependable. And she had a complete aha moment where she suddenly realized the gap between the culture of the organization she was working in and her personal values. What was really interesting is when we looked at the published values of that organization on the website, they truly matched her aspired values. But they were fundamentally different from what it was like to do business in that organization. And her message back to me was, I get it. I now understand why it's so hard to get a deal across the table agreed or to innovate or to challenge this organization, because they have the aspirations to be innovative, to be future focused, to challenge the way organizations do business, but actually they're all about safety and security because they keep our money safe.

Angela Malik: 11:29

So if there's such a big disconnect in some cases where the lived values are very different from the aspired values, is that an argument to just get rid of organizational values altogether?

Dr Amanda Potter: 11:42

I don't think that dismissing the values is the right thing to do. I think it could be a mistake because we need a starting point for conversation and we still need to help leaders articulate what is important to them and what is critical for success. So the values cards are a great tool for helping teams come together and understand collectively what's important to them, and therefore how does that impact their purpose and how they come together to drive success. But what is really important is we're clear how those values differ within that team, for example, to the aspired values of the organization and the reality of working in that organization. So I don't think we should dismiss them. I think we should just be clearer about the difference between aspired and actual, particularly if we're going to be using values for recruitment, for succession, or any type of assessment or development.

Angela Malik: 12:39

So you mentioned recruitment.

Dr Amanda Potter: 12:41

How do we use values for recruitment? And there we get to the contentious question. Because over the last 30 years, I've been asked by many organizations to build values assessment tools. And we have built them in the past. And very often the desire for a values assessment tool was to help with screening candidates. So to take large populations down to smaller populations of candidates for clients. As a result of all these different requests, what we did is we created our own product internally called Culture Fit under the B Talent brand. And we sold that for a couple of years, but it wasn't one that I was very happy with during that period. And so I threw all of my energy into the products that we are very happy with and are doing a really good job, like strengths, decision styles, resilience, and so on. I started to see the change in the tide around the language of culture fit and the impact of culture fit on diversity and whether recruiting and using values-based cultural fit tools was the right thing to do for organizations. I then made the decision to pull that product off our suite of tools and no longer sell it. And the reason for that is because if you use a culture fit tool and you profile match an individual's values with the values of the organization, what you're doing is potentially, as it says in many of the articles, undermining diversity. We overcame that as an organization because we always sold our culture fit product in combination with our strengths questionnaire. And therefore, with the strengths questionnaire, you got the diversity, the cognitive diversity we've talked about in previous episodes. And with the values, it was a great combination of tools that works brilliantly, but there was a risk that somebody might just use culture fit, they might just use it for screening, and therefore might be prone to the bias, the organizational bias of homogeneity and reducing cognitive diversity.

Angela Malik: 14:41

So, really, if you're only hiring to fit a certain culture, you are undermining diversity.

Dr Amanda Potter: 14:48

You are. And we need diversity in a culture for a culture to be highly effective. All of our research has shown that cognitively diverse organizations and teams are more likely to be psychologically safe. The experience is more likely to be psychologically safe because people speak up, they challenge, they question, and they debate. So you are absolutely right, it could hinder diversity. And we are a strengths-based organization. Everything we do is about driving diversity and driving conversation and ideation and problem solving. And so we certainly didn't want to be offering a product to organizations that could be misused and could be focusing on profile matching or culture fit.

Angela Malik: 15:32

I know in the past, when you were selling culture fit as a product, you were selling it in conjunction with our strengths questionnaires. So that you could fulfill that diversity need.

Dr Amanda Potter: 15:43

Totally. But the reality is we couldn't force customers to always buy strengths with culture, that some would potentially want to just buy culture in isolation. But actually, this leads me on to the next point for this podcast, which is the research has moved away from culture fit more towards culture agility and the fact that we need to hire people who are agile, responsive, attentive, curious, and are able to adapt their style and their behavior depending on the culture they are operating in. So not that they are coming in and demanding a certain type of culture depending on what is important to them, but more that they are able to adapt and be agile to the culture that they are moving into and to fall into step with their colleagues, but also, of course, to challenge where possible.

Angela Malik: 16:37

So let's define that then. What is cultural agility?

Dr Amanda Potter: 16:41

So cultural agility is the ability to work and perform across cultural situations. It means being comfortable with the unfamiliar and being able to pick up on the subtle norms and contexts of different cultures and then adapting your behaviour accordingly. So more than ever in our global organizations, we have to work across many different boundaries in many different continents, and often in a single day because of virtual working. So cultural agility is about interacting with new and different teams and cultures and being attentive and considerate of all of those nuances and differences.

Angela Malik: 17:22

And what is the impact of an organization hiring for cultural fit as opposed to looking for that agility?

Dr Amanda Potter: 17:32

Well, the impact could be silo mentality, because what you have is you would end up having quite distinct cultures in in different departments or different offices that don't necessarily interact or overlap. But also the big risk of assessment for culture fit that we haven't said is very often organizations assess for the aspired values rather than the actual values. So they recruit against the culture that they would like rather than the culture that currently exists. So we sometimes see, particularly at a very senior level, organizations recruiting, for example, very disruptive, innovative, forward-looking individuals to come and challenge the status quo to remove that functional stupidity. And they last nine months because the culture just isn't in a place that they thought it was going to be, and they're a lone wolf trying to fight a system.

Angela Malik: 18:26

That's just like your example that you spoke about earlier, your client who was exactly that innovative and disruptive, but her organization was safe and compliant.

Dr Amanda Potter: 18:36

Very true. Luckily, you joined us, Angela. You are disruptive, and we do have a number of disruptive people in our organization.

Angela Malik: 18:43

So we we welcome all your challenges and ideas. So if there are so many problems with assessing values in recruitment, why is that still a popular method?

Dr Amanda Potter: 18:55

The reality is it's really, really hard to screen candidates. And values is one of the ways organizations still look towards to help screen from large numbers down to smaller numbers for assessment for recruitment. The reality is there's no perfect solution. If there was, one of the consulting firms would have defined it and designed it, and everybody would be using it. From our perspective, the way we overcame that difficulty is to use values as part of the solution, not just being the final solution. What we're trying to do with any type of assessment is provide objectivity and reduce subjectivity, and we're trying to remove any risk of unconscious bias from the leaders who are making the decisions about the candidates.

Angela Malik: 19:42

I know we've talked about bias before. Could you remind us how bias works?

Dr Amanda Potter: 19:47

Of course. So unconscious bias is our brain's way of speeding up problem solving or decision making. And it's been in the past a very critical element of our survival. And so a bias is basically a shortcut, which helps us to speed up any processing of information. The problem with biases, however, is that we only use some of the information that's available to us, and therefore we make assumptions or take giant leaps that are not necessarily very accurate.

Angela Malik: 20:20

So, what exactly is the brain doing when we're experiencing this?

Dr Amanda Potter: 20:25

When we have these mental shortcuts that result in us having unconscious bias, there are a number of brain regions that are involved, but I'd like to focus on two, which I mentioned on a number of podcasts, which are the amygdala and the prefrontal cortex. So imagine we meet someone new that we've never met before. What happens is the prefrontal cortex evaluates that newly met person via the five senses and assigns labels and stereotypes to them. It's not something that we do consciously, but it's something that we automatically do. So the prefrontal cortex, that's our logical side of our brain. Completely. It's the amygdala that helps us understand the level of risk. The amygdala plays a really important role in unconscious bias because it helps us to decide whether we're in danger as soon as possible. And from an evolutionary perspective, it's an important element for our survival. It helps us to characterize stimuliing people into people who are like me or not like me, or are part of my group or not part of my group. But that classification can lead towards prejudice or discrimination or bias.

Angela Malik: 21:35

Yeah, it's it's an us versus them mentality.

Dr Amanda Potter: 21:38

It is. In fact, that's the bias that is most closely linked to what we're talking about, which is similarity bias or like you, like me bias. As humans, we favor those who are most like us, often at the expense of those who are not. And it's actually a natural and automatic thing that happens as in the amygdala. And so you can see how it leads to this in-group and out-group fallacy and why managers often end up favoring who remind them of themselves. And this could be on the basis of gender, ethnic origin, sexual orientation, and so on. But actually, from a cultural perspective, we want diversity, but the natural predisposition is homogeneity.

Angela Malik: 22:20

I can see it's really easy to fall into that trap, isn't it, of hiring for fit. And you often do hear fit as the excuse for why someone wasn't promoted into a role or hired for a role. Someone might say, Why didn't you get that job? And the answer would be, oh, they said I wasn't a good fit.

Dr Amanda Potter: 22:39

That's completely right. And there was a diversity report looking at nearly 200,000 employees across 1,000 companies. And they found that in that research, that both men and women tended to praise colleagues of their own gender more, and managers tended to supervise employees of their own gender more often and preferred to work with people of their own gender more often. And this is all due to that personal bias.

Angela Malik: 23:06

That's really interesting. Are there any other types of bias that we need to be aware of?

Dr Amanda Potter: 23:11

Another one that really impacts culture is first impression bias. So first impression bias means that we make very fast decisions about people in the first seven seconds. So impressions are formed about someone's fit or their personality on the basis of their looks or their facial appearance. And these impressions, we know, are often completely inaccurate because of stereotypes.

Angela Malik: 23:37

It's really strange that our impression bias is inaccurate when it's our amygdala sort of keeping us safe. So you would expect our first impressions to be very accurate because we're making risk assessments and trying to protect ourselves.

Dr Amanda Potter: 23:55

I know, and it's because it's not really a conscious thing. We don't consciously make these biases or make these judgments. It's just it's based on our experience and our knowledge of the past, which is how we get to make these decisions. So we need to train ourselves to overcome them, actually, so that we don't fall into the biases that we've mentioned, similarity like me, like you, first impression, and another one might be contrast effects. All of these biases stop us from truly creating diverse environments.

Angela Malik: 24:29

What is contrast effect?

Dr Amanda Potter: 24:30

So, contrast effect is another unconscious bias where we compare two individuals against one another. So imagine we had two candidates, both of them who were poor, and then we had another candidate who was average. If you were to compare that average person against the two that were poor performers, you might say that that average person is excellent because in comparison to the poor, they are much better. But in comparison to the benchmark, all three are probably not good enough. And so it's another small bias that can impact us.

Angela Malik: 25:02

So we have all these biases that are human nature. They're a natural product of our brain and how it works. How do we overcome these unconscious biases when we are assessing or recruiting?

Dr Amanda Potter: 25:16

So we need to not ignore them because they are natural, but we need to work with them. And cultural agility is a great approach because cultural agility is about understanding how we need to work and perform in cross-cultural situations and being more comfortable with the unfamiliar. So we need, from a DI perspective, make sure that we're truly connected with those different environments and what we expect from people. And so hiring for cultural agility allows organizations to create a workforce that is much more inclusive.

Angela Malik: 25:52

So really we just have to switch between cultural fit and cultural agility.

Dr Amanda Potter: 25:58

If only it was that simple. But I do agree, yes, absolutely. We need to be aware of and remove our unconscious biases. We need to stop profile matching. We do need to still understand what is important to teams and to organizations, but we need to focus on the whole organization, the global organization, and the different environments in which people will be moving into and how they need to adapt.

Angela Malik: 26:23

So, how can we hire for cultural agility?

Dr Amanda Potter: 26:27

So there are a few ways we can improve the hiring process around cultural agility. Number one is not hiring against a profile or a set of values, so not profile matching. Number two is recruiting from a wider pool of graduates. For example, we've got a client who's just said that they would like to recruit for people who've got lower than a 2-1 degree or from a non-Russell group or Ivy League university, or from, in my time, maybe a polytechnic.

Angela Malik: 26:56

That's interesting that organizations are being braver about expanding their definition of what good performance can look like.

Dr Amanda Potter: 27:04

It's true because they're not necessarily just wanting the first class or two one degrees from the top-end universities. They recognize that diversity from different types of universities and actually different courses as well can be incredibly beneficial because those individuals come in and ask different questions. So, in addition to not profile matching and recruiting from a wider pool, a couple of other tips are to have different types of questions in the application form. For example, asking questions around pronouns and asking questions around non-work experience and achievements. And finally, it could be focusing on questions around cultural experiences and their experiences of different working in different environments or different countries to show their level of curiosity and their level of agility and understanding of their experience of interacting in those different environments.

Angela Malik: 27:58

So to hire for cultural agility, we want to avoid profile matching, recruit from a wider pool, ask different types of questions in the application forms and interview around cultural experiences and interests.

Dr Amanda Potter: 28:13

Absolutely. Seems very simple, actually, doesn't it?

Angela Malik: 28:16

It does.

Dr Amanda Potter: 28:17

So the other tip I would add to that is to assess for strengths. I still believe using a strengths-based approach is the best way to create cultural agility if we can have as much diversity across the organization in terms of what people are energized by, rather than have us having a single focus of everybody having the same thing in common in terms of what's important to them, then we get that agility, that cultural agility.

Angela Malik: 28:44

So, what else can we do to create an environment that is culturally agile and not fixed or static?

Dr Amanda Potter: 28:50

So I think this is really the final thing I wanted to say on this podcast, which is we really need to start when we're working with clients to be clear about the difference between the current and the aspired culture and also understand the cultural agility that's required to be successful across that organization. And the larger the organization and the more diverse that organization, the greater the amount of agility that is required. We need to make sure that we recruit and bring into an organization people who are curious and appreciative and open to different ways of interacting, and that they are aware of their biases and prepared to challenge themselves and be open to be challenged. So we need to recognize that we all use shortcuts and we're all prone to bias. So we need to be prepared to be challenged and also to challenge ourselves in order to operate in the best way possible.

Angela Malik: 29:46

Well, thank you, Amanda, for another great conversation. I really think our listeners will get a lot of value from this today.

Dr Amanda Potter: 29:53

I hope so. This is an interesting topic for me as a psychologist. I'm hoping other people find it interesting too. Because the debate with clients around culture has been an ongoing one. And still today we get requests for cultural assessment for recruitment. And I'm still pushing back and saying that rather than using a values fit or culture fit approach, that values cards are a useful discussion tool that we use in recruitment as a starting point for understanding what's important to the individual. But we shouldn't fit against a standard or a profile. But actually, a great way of understanding what truly energizes an individual and where they will invest and spend their time and how they might be diverse from their colleagues is using the strengths-based approach.

Angela Malik: 30:42

And luckily, we have both the Strengths Questionnaire and the Be Talent Values cards to help fulfill that need. Indeed, we do. I'd like to thank Attila Simone, one of our business psychologists, who supported with the preparation of this podcast. And if you like our podcast, please click the follow button on your podcast platform so you know when the next episode is available.

Dr Amanda Potter: 31:05

And I would just like to say that we publish a number of articles and information about our podcasts and our accreditation courses on our Zircon page on LinkedIn. So please like the Zircon page if you'd like to hear about our product, podcast, research, and accreditation news.

Angela Malik: 31:24

The next episode is on a topic that's very dear to my heart. It is a special Black History Month episode with a fantastic guest, Maurice McLeod.

Dr Amanda Potter: 31:34

Thank you so much, everyone, for listening. I hope there are some nuggets in this that are useful in your personal life or your professional life. Thank you very much. Bye.