“Culture” was named the most popular word of the year in 2014 by Merriam-Webster. It has since become one of the most important words in corporate boardrooms, a hot topic in general and smokin’ hot in internal audit circles. But why? And why now? Our session will focus on answering these questions to help us understand how we got to this point and where we go from here. In addition, we will discuss these questions about organizational culture: - What is Culture? - What is Our REAL Culture? - What is Our Desired Culture? - How do We Turn Our Desired Culture into Reality?

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WHY CULTURE?
WHY NOW?
M A Y 2 0 1 8
Randy Samsel
Culture & Talent: The Intersection of Human Capital
Management and Effective Risk Management

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Culture is a reflection
of organizational
values
Culture influences
behavior
Culture
differentiates the
best companies
by driving great
performance
Culture is as
important as
strategy in
determining success
WHY CULTURE

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Culture
“I came to see, in my time at IBM, that culture isn’t just one aspect of the game, it is
the game. In the end, an organization is nothing more than the collective capacity of
its people to create value.”
– Louis Gerstner, IBM
- WHY CULTURE -

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- WHY CULTURE -
Culture is the delivery system for your strategy.

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Culture
• Regulators and boards are increasingly focusing on risk culture because culture
drives behavior.
• It largely determines decisions, conduct, and risk-taking within an organization.
4 Hot Topics Internal Audit Should Be Ready To Address In 2018 FEI Daily | 02/5/2018
- WHY NOW? -

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WHY NOW
Leadership Visibility
War for Talent
Greater Transparency
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1
3

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Culture is How We Behave When No One is Watching.

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Organizations used to be black boxes, but are now glass houses.

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WHAT IS CULTURE

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• PWC principal Rutger von Post defines culture as an
organization’s self-perpetuating pattern of behaviors, thoughts,
feelings, mindsets and beliefs
• The values and behaviors that contribute to the unique social and
psychological environment of an organization –
BusinessDictionary.com
• A classic McKinsey originated phrase to describe culture is “how we
do things around here”

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Culture is the link between Values and Behavior

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WHAT IS OUR REAL
CULTURE

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- CORPORATE VALUE STATEMENTS-
Respect
We treat others as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment.
Ruthlessness, callousness and arrogance don’t belong here.
Integrity
We work with customers and prospects openly, honestly, and sincerely. When we say we will do something, we will
do it; when we say we cannot or will not do something, then we won’t do it.
Communication
We have an obligation to communicate. Here, we take the time to talk with one another and to listen. We believe
that information is meant to move and that information moves people.
Excellence
We are satisfied with nothing less than the very best in everything we do. We will continue to raise the bar for
everyone. The great fun here will be for all of us to discover just how good we can really be.

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When companies fail, it’s usually for reasons that almost
everyone knows but almost no one has voiced.
― Sheryl Sandberg, Option B: Facing Adversity, Building
Resilience, and Finding Joy

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- TABLE DISCUSSION -
Discuss examples of behaviors you have observed that reflect desired values
And examples of behaviors you have observed that do not reflect desired values

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Ask Everyone –
Surveys and Polls
Observe People in
Action – Especially
Leaders
Consider Impact
of Compensation
and Incentive
Plans
Review Hiring,
Onboarding,
Retention and
Succession Practices
HOW CAN YOU DISCOVER YOUR REAL CULTURE

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- THE 2 MINUTE CULTURE CHECK-
Rate your organization on a scale of 1-5 (1 being poor, 5 being great):
1. In the last 12 months, our organization (company, division, department) has
significantly improved productivity.
2. In the last 12 months we have made significant improvements to our processes.
3. In the last 12 months we have significantly improved the features of our
products/services.
4. We have a reputation for being very efficient in our organization.
5. We have a reputation for consistency.
6. We have a reputation for delivering superior results.

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WHAT IS OUR DESIRED
CULTURE

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- CULTURE IS THE LINK BETWEEN VALUES & BEHAVIOR-
Values as Promises
• Basic
• Implied
• Stated

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- EXAMPLES -
Disney – Innovation, Quality, Community, Storytelling, Optimism, Decency
Amazon – Customer Obsessed, Deliver Results, Hire the Best, Think Big
USAA – Service, Loyalty, Honesty, Integrity

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- EXAMPLES -
Hulu – Viewers First, Think Big, Better ways, One Team, Character, Fun
P&G – Integrity, Leadership, Passion for Winning
Hyland – Honesty, Integrity, Fairness, Customers are Partners, Employees are
Family

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- TABLE DISCUSSION -
1. Think about organizations you admire.
2. Then discuss and note the reasons why.
3. Next, think about organizations you do NOT admire and why.

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- The Best Culture -
1. Is Unique to Each Organization
2. Reflects Organizational Values
3. Promotes Desired Behaviors
4. Produces Desired Results

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HOW DO WE TURN OUR
DESIRED CULTURE INTO
REALITY?

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- ALIGNING VALUES WITH CULTURE, AND CULTURE
WITH BEHAVIOR -

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- Table Discussion -
1.Select a Value (promise) you feel is important to any organization and the
behaviors that would reflect that Value
2. Discuss suggested steps for encouraging the desired behaviors.

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- STEP ONE: ALIGNING VALUES WITH CULTURE -
• Publish and Communicate Values.
• Lead by example.
• Engage and Reinforce.

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- STEP TWO: ALIGNING CULTURE WITH BEHAVIORS-
• Hire for Cultural Fit.
• Align Rewards and Performance Feedback to Values.
• Provide Coaching, Mentoring and Feedback on Decision Making.
• Link to Stories and Tangible Results.

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WorkplaceNext Survey™

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- WORKPLACENEXT SURVEY MEASURES SUSTAINABLE SUCCESS -
1. 20 question survey
2. Quantifiable Scoring
3. Prescribed improvement recommendations for ‘remediation’
4. Regular intervals for Survey updates
5. Badge of recognition for reaching and sustaining 90th percentile
*In Beta Testing

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- SAMPLE QUESTION & RECOMMENDATIONS-
Our organization’s shared values are consistently
demonstrated by the leadership team
 Strongly Agree
 Agree
 Unsure
 Disagree
 Strongly Disagree

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- SAMPLE QUESTIONS AND RECOMMENDATIONS -
Leadership Demonstration of Shared Values
• Values definition and development project
• Values audit/review/update
• Leadership coaching/development
• Emotional intelligence assessments/development projects

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CULTURE
CHANGE IS A
JOURNEY, NOT
AN EVENT It is a journey that has a destination but no real end point
Requires an integrated approach that must begin at the
top of the organization and be embedded throughout the
company
Leaders who have successfully, measurably, and sustainably
shaped their cultures know that culture transformation is a
journey
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- SIX BUILDING BLOCKS FOR CULTURE CHANGE -
Inspiration – with leaders and employees inspiring each other
Meaning – starting with the corporate purpose and emphasized in the work itself
Respect – so that trust is high
Caring – for each other and for customers
Compassion – demonstrated with kindness for others in times of suffering
Forgiveness – avoiding blame

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QUESTIONS?

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CONTACT US
Randy Samsel
eSearch, Inc.