Creating A Corporate Culture For Employee Engagement: Introducing 'UGRs'

Welcome to the Vantage HR Influencers Podcast. This podcast is sponsored by Vantage Circle, the simple and AI-powered rewards and recognition platform for employee engagement. Corporate culture has received a lot of attention lately. People are now looking for ways to improve the overall experience at work. In this podcast, we'll learn more about what beliefs and behaviors determine corporate culture, what influences it, and how we can develop our culture more organically. Besides that, we'll learn about the unwritten aspects of your organization, your Unwritten Ground Rules, which are also an important factor to consider in your corporate culture.

Susmita Sarma: Hi everyone, this is Susmita from the Vantage HR Influencers Podcast. As my guest speaker today, I am so excited to welcome Steve Simpson, an international speaker, author, and consultant. He has worked with companies for more than 30 years to help them understand and strategically improve their workplace cultures. Professional Speakers Australia recently recognized Steve's achievements by awarding him the prestigious Australian Educator of the Year Award. Welcome to the show, Steve.

Steve Simpson: Thank you, Susmita. It's great to be with you.

Susmita Sarma: Great, okay. So before we proceed with the topic today, let us know a brief about your journey in the corporate world.

Steve Simpson: I started off many years ago working in the area of customer service. The notion of customer experience wasn't even around then. So I started in the area of customer service, working with organizations to help them get a genuine customer service ethic through the organization. And I soon realized that I was having a big impact in some companies I was working with and having very little impact in others. That got me wondering why that was the case. Why was it that in some companies this was being grasped very eagerly, and people were making changes based on the input I was sharing with them, and in other cases that wasn't the case? So I began to realize that it was the corporate culture of these organizations that was determining the extent to which this was picked up. And I then realized that corporate culture was the key to unlocking customer service and a lot of other things. So that's what I then began to focus on: corporate culture. And to be honest with you, I've been doing mostly corporate culture work over the past 25 or so years.

Susmita Sarma: Right, okay, great. So yeah, today's topic is on corporate culture. So let's begin by talking about how to design a corporate culture. But before we do that, I suppose it would be better to define corporate culture and make sure that we're all on the same page.

Steve Simpson: And it's a good question to start off with, because I think there's a strange and interesting paradox that exists nowadays. The term corporate culture, or sometimes it's referred to as workplace culture, or just culture, has been used increasingly over the last 20 or so years, and it's very commonplace now. But the paradox, in my view, is that very few people understand culture in simple and practical terms. What we don't understand, we can't manage, and what we don't manage, we become victims of. I think many people, including leaders in some cases, know that their culture might not be as good as it could be, but don't really know what to do to make changes to it. So understanding culture is the key. My definition of culture is very simple, and I think simplicity is important here: my definition of culture is people's perceptions of "this is the way we do things around here." That's a really important definition, people's perceptions of this is the way we do things around here. And of course, the word "perceptions" is key in that definition. So once we've got people agreeing to that definition, we can then use it in a very practical way. And I think this is overlooked to a large extent in most companies, because the starting point for leaders and companies is, I think, to consider a vitally important question. The question is: what are the key cultural attributes we need in place for us to truly be successful while making this a great place to work? Put more simply, that question is, what does our culture need to look and feel like for us to truly be successful while making this a great place to work? We need leaders to gain clarity and commitment to an aspirational culture, not for the sake of being soft and fluffy, but in the interests of the company being successful and being a great place to work. What does the culture need to look and feel like? There should be no more than five or six attributes that leaders agree on, and we can call these values if you like. It doesn't matter really what we call it, but we need to have that clarity and commitment right across the leadership team to our aspirational culture. It's really vital, and I think it's the necessary starting point for any company serious about transforming its culture.

Susmita Sarma: Rightly said, Steve. So it's primarily about those behaviors, like how we relate to one another, how we interact with each other, and all of which are visually appealing, and all of these stem from attitudes, beliefs, values, and mindsets that lie beneath, right? So what is the best way to design the culture we want for our team?

Steve Simpson: Well, you see, again, Susmita, you're touching on something that's vitally important to culture. My definition of culture is people's perceptions of "this is the way we do things around here," or in other words, the UGRs, the Unwritten Ground Rules. I created this concept of UGRs, Unwritten Ground Rules, more than 30 years ago, and it's the Unwritten Ground Rules, the UGRs, that are your culture. UGRs are people's perceptions of this is the way we do things around here. So they can include things like: at our meetings, it isn't worth complaining because we know nothing will get done, or the only time anyone gets spoken to by the boss is when something is wrong, and so on. The remarkable thing about UGRs is that they drive people's behavior, yet they are seldom, if ever, talked about openly. It's the Unwritten Ground Rules that constitute a company's culture, and they're enormously powerful. A good test for this is the new employee. If a new employee is lucky, they get an induction or orientation where they get told "this is the way we do things around here." And then they go and find out the truth, and they find out by deduction. They'll look for certain cues and clues to work out, to deduce, what the UGRs are. There's evidence of this, Susmita, and that is that the vast majority of us, irrespective of how senior we are, when we join a new company, most of us will be quieter than we otherwise would have been. Why? Well, at an unconscious level, we don't have the term UGRs in our heads, but at an unconscious level, we are tuning in to the UGRs in order that we can conform. That's the power of UGRs. The vast majority of us conform to what we believe the UGRs, in other words the culture, to be. They hold enormous power. And there's all sorts of things that flow from this, like how leaders tap into the UGRs, because it's very rare that people verbalize what the UGRs are. In fact, sometimes leaders are shielded from the UGRs because they are leaders. It's only when a leader leaves the room that the real UGRs surface, in many cases. So it's a very tricky thing for leaders to get their head around, in terms of what the prevailing UGRs are. But over the last 30 years, we've been able to work out ways that we can tap into and find out what the current UGRs are, and it's often a revelation for people.

Susmita Sarma: Right. So as it's named, Unwritten Ground Rules, if it's unwritten, how do we know that this is the rule?

Steve Simpson: This was something we worked at for a long time, and it wasn't until we got Australian universities involved in doing world-first research that we were able to uncover an approach that enables us to surface the prevailing Unwritten Ground Rules. The incredible thing about this approach is that it's very simple, and yet it is very powerful. In this world-first research, which had five companies involved, we got people to anonymously reflect on "the way we do things around here" back in the workplace, and we got them to complete what we now call lead-in sentences. So, for example, in our world-first research, we got people to complete this sentence: "Around here, customers are..." I'll often get people to have a guess at what some of the anonymous responses to that lead-in sentence might have been. We got responses like "around here, customers are a pain in the neck." We had one person who wrote "around here, customers are an interruption to my working day. I could do without them." We literally had that. And we realized at the time that this was such a revelation, because each of these companies had wonderful documentation proclaiming their commitment to customer service, and yet if these are the UGRs, that documentation counts for nothing. That's the power of culture and UGRs. So what we do now, we've gotten a bit smarter since we did that world-first research, which was more than 20 years ago. What we do now is we craft lead-in sentences to link back to the values, or the aspirational culture, of the company. This goes back to my first point about what I think leaders need to do as a first step: they need to gain clarity around their aspirational culture, which they can call values. So I'll give you an example. If we have a value of teamwork, we can get people to anonymously complete a lead-in sentence like "around here, when you need help..." or "around here, when it comes to dealing with people from other work areas..." If we have a value of constant improvement, we can get people to complete the sentence "around here, when someone comes up with a new idea..." If we have a value of respect, we can get people to complete the sentence "around here, people are treated..." When we do this, and we've done this with companies like McLaren Automotive in the UK, Next in the UK, a massive retailer, through to large companies out of Australia and New Zealand, through to small companies that have only a hundred people, and remember, we craft this to link back to the values that the company has, or the aspirational culture, inevitably it's a real revelation for everyone, because people finally realize what the real culture is like. And often it's not as rosy as the leaders would have thought, because often, through no fault of their own, leaders are being shielded from the real UGRs, despite their best efforts. So it's a really simple but powerful tool to understand the current culture, linked, most importantly, to those aspects of the culture that are most important to the company's future success.

Susmita Sarma: Right, so who creates the UGRs? Is it the leaders?

Steve Simpson: That's such a good question. I say to leaders, you are primarily but not solely responsible for the culture. That's an important distinction, because sometimes I think leaders can take on too much responsibility for the culture. There's evidence of this: we can have a good leader with an ordinary culture, why? Because of the staff. We can have an ordinary leader with a good culture, why? Because of the staff. So I think once you learn about UGRs, people realize that everyone plays the game of UGRs, and we can all contribute to the prevailing, current UGRs. So it's vital that staff understand the role that they play. Employees must understand the role that they play, because they can create very negative, counterproductive UGRs, but often not deliberately. Often it's an unconscious thing, and the same with leaders. Often the prevailing UGRs are just a function of history and circumstance, and people don't normally go to work thinking "how can I make more negative UGRs today." We've got what we've got, and I think part of the power of UGRs is its simplicity, and we can indeed get everyone excited about the prospects for a more positive, productive, dynamic, hard-working culture. I honestly believe that the vast majority of people want to be part of a positive, productive, dynamic culture, and most have given up hope of it being any different. I think we need to give people hope, and UGRs can do that.

Susmita Sarma: So are there any specific steps to create and handle UGRs?

Steve Simpson: Well, the first step is gaining clarity around our aspirational culture through the question I've shared with you. We call that "envision": we need to envision our aspirational culture, and we need to get leaders clear and committed to that. The next step is what we call a "stocktake": we need to find out what the current culture is like with regard to our aspirational culture. We can frame the lead-in sentences to link back to the values we're aspiring to, and based on that feedback from the stocktake, we can identify improvement opportunities. Where are the areas of concern? What do we need to improve? And where are our areas of success? What should we be celebrating? Because we shouldn't forget about that either, there's some good stuff happening in most companies. The third step is to involve people in crafting the positive UGRs we'd like to characterize the company by, into the future. We need to teach everyone about UGRs, because often just by learning about UGRs, people realize that their personal behavior contributes to the prevailing UGRs, and we need to have shared ownership of the culture. If there was a silver bullet for improving culture, and there isn't, it doesn't come down to one thing, but if there was a silver bullet, it would be this: we need to have shared ownership of the culture. We need to get employees and leaders genuinely committed to and fighting for a culture that's better than we've currently got, even if it's good right now. So that's the fourth step. The fifth step is embedding our culture, locking it in and constantly building on an improved culture, because in the companies we work with, we're able to create a level of excitement and momentum about a positive, productive culture, but the key is not letting that go, so we've got to lock that in and constantly build on it.

Now I'll share with you a question which I think is vitally important for leaders. I was working with a major company, and I did some sessions with their staff, and I had a debrief session with the senior executive team. The staff loved the sessions we had, and in the debriefing session I asked the leaders this question. I said, "I'm speaking with your employees, and you leaders aren't in the room, but your employees are being open and honest with me. How do you think they would answer this question: what are your leaders' top three priorities?" Now, with this group I was working with, there was a long pause, until one of the leaders, to his credit, spoke up and said, "Steve, we don't even know what our top three priorities are, so how would they?" So there are two key questions that flow from this. One: do we want culture to be a top-three priority? Because, you know, I can come in and get staff and leaders excited and motivated, but if it isn't a top-three priority, that excitement and motivation is going to quickly fade away, and we go back to how we were. So it must be a top-three priority, and that's a genuine decision leadership teams need to consider. You don't go to jail for it not being a top-three priority, but we need to make the decision: do we want it to be, or not? Because if it is a top-three priority, then we need to consider very carefully how we demonstrate to people that this is a top-three priority, and that's largely through the questions that leaders ask, and don't ask. Irrespective of what we say our top three priorities are, our people will deduce what is most important, and if all you ever ask a sales team, for example, is "what are your numbers, what are the dollars in," and that's all you ever ask about, then quickly people will deduce that numbers and dollars are the most important priority. So it's through the questions we ask, and don't ask, and we've got to think about, if we want culture, or people, or values to be a top-three priority, what sorts of questions do we need to be constantly asking our people. Because this links to the fifth stage, embed: how do we lock this in and constantly improve it? It's got to be a top-three priority, we've got to constantly talk about this and never let it go.

Susmita Sarma: Okay, so it must be difficult for the managers or the leaders to deal with the UGRs, I guess, right?

Steve Simpson: Well, you see, irrespective of whether leaders like it or not, UGRs exist. UGRs are a function of human beings being together, it's not confined to work, any collection of people we get together with, there will be UGRs. It's like any group, when we join a new social group we'll be quieter, why, because we're checking out what the UGRs are. So UGRs exist in any group we're in, and we can either wish that it didn't happen and march on regardless, or we can try to grab a hold of this. And remember, not all UGRs are negative. If you have a positive team right now, it follows by definition that there are positive UGRs, it has to be the case. If we have an ordinary team right now, it follows there are ordinary UGRs. The key question for leaders is: are our current UGRs a function of local chance, or are they by design? Are they because we're fighting for this? And in the vast majority of cases, Susmita, the UGRs are a function of local chance, not by design, and I think that needs to change, particularly given the past 18 months. I mean, the situation with COVID in India has been really bad, and I feel for all of you in India, but I think now more than ever, culture is more important than it's ever been in the past, because there is no doubt people, and this applies to everyone on the planet, we have, it's not a matter of if but how much, of these emotions we've been experiencing, because it's a mix of fear, stress, and uncertainty that each and every one of us has experienced over the last 18 months, and we'll continue to do so, and it merely ebbs and flows, it's not a matter of if. So, if that's the context, we need to focus in on our culture more so now than ever before, because at this point in time, when it's so tough, we can differentiate ourselves based on our culture, and people are yearning for that, people need that, and it's so vitally important.

Susmita Sarma: Okay, so leaders who are responsible ensure that their employees are always ready, they teach them the skills and techniques they need to be prepared for the unexpected. So what are some of the unwritten rules that leaders must teach their employees to ensure that they're ready to succeed on their own?

Steve Simpson: Well, again, that's a really good question, because, you see, UGRs are normally talked about quietly. Pre-COVID, that used to be the water cooler conversations, pre-COVID that used to be the conversations that happened after a meeting, pre-COVID it was the response of the group when a new person said something they shouldn't at a meeting. Now it's got much more complicated, now that most of us are virtual, and the subtle cues we're used to tuning into, many of them are gone. So now they're Zoom-related or Teams-related cues that we tune into, like, do people put their cameras on for meetings? I've been in many meetings at companies where the vast majority of people have their cameras off, and that says something in itself. So what do employees need to learn, and what do leaders need to teach? I think leaders need to reinforce to employees that it's okay to challenge, because UGRs normally define the boundaries you don't step over. There might be a UGR that says, "around here, the only time you make comments about the boss is when you agree with them, never disagree with the boss." Well, a leader has got to challenge that, if the leader suspects that's the case, then a leader needs to challenge it. I worked with one leader, and I asked him how it was going with our UGR work, and he said, "Steve, I've implemented one UGR, and it's mandatory, it's compulsory, and it's changed things completely." I said, "What are you talking about, what is this?" And he said he was really concerned about the fact that they were having meetings and then people were going away and not agreeing with what was decided. So he implemented one UGR, and the UGR was: "around here, silence equals consent." He shared this with his people and said, "From now on, if you are silent at a meeting, we have to presume that you agree. I'm prepared to take it on the chin if you disagree, in fact I want you to share if you disagree, because otherwise your silence means you completely agree, and I expect you to carry out the decisions we've made because of your agreement." It's those subtle but vitally important things that can make a big difference to how teams, and indeed companies, function.

Susmita Sarma: Okay, so how do you describe corporate culture's impact on performance, and how they might be addressed through UGRs?

Steve Simpson: We did some fascinating research a while back, and to be honest with you, we stumbled across this question, and I now ask it as often as I can to leaders. In our research, we asked this question: "If the culture of your workplace was to become as good as it could realistically be, how much improvement would there be in people's performance, or productivity?" We gave people a sliding scale, starting at zero, zero is a legitimate answer, you might think the culture now, realistically, is as good as it's going to get, so zero is legitimate, then a sliding scale of 10, 20, up to 100 and 100-plus. We were amazed at the results. Fifty-eight percent, that's six out of ten senior leaders, said 20 percent or more improvement would occur if the culture was realistically improved. Eighty-nine percent, that's nine out of ten middle managers, said there would be a 50 percent improvement in performance if the culture was realistically improved. Now, when I do this over a Zoom meeting, or when I did it pre-COVID at a face-to-face meeting, honestly, I'd ask a group of leaders from the same company, and more often than not, the average people would say was 40 percent. Now this is staggering, because I used to say to people, "40 percent, let's presume you're wildly over-optimistic, let's say 20 percent, would you take it? Because where else, through what other initiative, could you gain performance improvement of that magnitude?" The point here is that there is dramatic performance improvement capability that rests at our feet: it is the culture of our workplace. It's truly remarkable, by the way, that some companies have come out with an average of way above 40 percent as well, it's just incredible, the capacity for performance improvement that rests within companies.

Susmita Sarma: Right. So again, being familiar with a company's understood policies and practices can be particularly difficult for new hires who are now working remotely, given they may never have visited the company's physical location. It's difficult to learn the unwritten rules, and given the number of people working from home these days, it's not an insignificant issue at all. So under this circumstance, how does a manager make sure that new employees are aware of the company's or team's unwritten rules?

Steve Simpson: Well, you see, and this is a really good question, because again, this happens unconsciously, people, new people, are tuning in to subtle cues. As a matter of fact, I did some work with McLaren Automotive in the UK, many people listening to this will know that McLaren have a Formula One team, I wasn't working with that division, I was working with the division that makes road cars. There's incredible security when you're driving to the premises, and when you get through security, it's probably a 700-meter drive before you get dropped off, on a big tract of land. So one morning I get through security, and about 50 meters before we're due to get dropped off, I asked the driver to stop. He was surprised, but he nonetheless stopped, and I took a photograph. It's a shame I can't show you the photograph, because it's of a gardener standing next to a very long hedge, and he is holding a measuring tape, measuring the height of the hedge. So I say to people, "What's the UGR here?" And people will say "precision, attention to detail," that is precisely a UGR at McLaren. It's remarkable, it's even infected the gardeners, what the people on the production line do has infected the gardeners, because they're measuring the height of the hedge for that UGR. So people unconsciously tune into an infinite number of cues. People who join a company will be looking at stuff like, at our Zoom meetings, do people turn their cameras on, because if they join a meeting and they're the only one with their camera on, they're quickly going to learn that's not the thing to do, and they'll turn it off. They'll quickly tune into whether people contribute to meetings or whether they all stay silent, and they'll fall into line. So you're right, it's hard to learn what the official policies and procedures are, but we've all learned, as human beings, how to tune into the unwritten ground rules, the UGRs, because we're staying silent, watching what other people do, we fall into line. The key here is about gaining alignment between what is written in the formal policies and procedures, and their values, by the way, and what actually happens. So if we have a boss saying "I'm really keen to hear your views," and that's written in the policies, and that's a value, but no one ever shares their views at meetings, well, the new person is going to learn very quickly that what's written in the policies does not align with the UGRs, and we know which one will win, it's the UGRs, so the new person is not going to contribute. So it's all about alignment between what is written and what really happens, I think that's the key.

Susmita Sarma: Okay, so what would be your suggestions to a business tuning into this podcast?

Steve Simpson: If you're a leader, I think it would be valuable for you and your leadership team to seriously reflect on whether you would like culture to be a top priority. If you do, I think it's absolutely necessary that you gain clarity and commitment to what that aspirational culture is, and you can use my question, because my fear is that values statements are too often conceived with good intent, but around a question like "so what do we want our values to be," completely separate from any strategic or business planning. I think culture and values need to be reframed to answer the question, "what does that culture need to look and feel like for us to truly be successful while making this a great place to work?" That makes it foundational, that's the foundation stone upon which everything sits. So make a decision, get your team thinking about culture, get clarity about your aspirational culture, and then tune in. You can do this quietly, as a leader, tune into what the UGRs are, because unfortunately, once you learn about UGRs, it's a bit of a curse, there's no off switch, you'll tune into things you previously haven't tuned into, and get a sense of what the UGRs are in relation to your aspirational culture. There might be value in having conversations amongst your leadership team around that very issue: do our UGRs align with our aspirational culture? That's a good starting point, I think, Susmita.

Susmita Sarma: Great, brilliant. So finally, how can our listeners reach out to you, Steve?

Steve Simpson: My email is steve@ugrs.net, and I'm on LinkedIn as well, so look for me under Steve Simpson UGRs, and I'm happy to connect on LinkedIn.

Susmita Sarma: Okay, now that was a great conversation with you, Steve, thanks a lot for joining me on the Vantage HR Influencers Podcast.

Steve Simpson: It was a treat, thanks, Susmita.

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