Cultural auditing in the resources sector

Organisational culture is defined by the collective norms of behaviour exhibited by the individuals within an organisation.

This is doubly challenging in the resources sector with remote sites, international and head office groups developing their own sub-cultures and accepted operating norms.

Culture is not – and can’t be – about empty tool box talk or a pretty poster on the wall of a crib room. It all starts at the very top with visible, authentic leadership demonstrating the behaviours and actions that embody the desired organisational culture,  who call out poor behaviours and support programs to develop the desired culture.

We’ve all heard Drucker’s famous quote “Culture eats strategy for breakfast”.  A cohesive and empowering culture is more likely to be a positive path to company success than strategy alone; countless studies have proven the benefits that a great organisational culture can have on staff retention and productivity, which translates into improvements in profitability.

A desirable culture can be the differentiator that resource sector organisations need in the race for scarce human resources,  generating brand and reputation advantage among customers and stakeholders. Critically, in this world of active regulators and empowered employees, the ability to protect your social licence to operate and improve employee retention and job satisfaction is a major prize.

Maintaining and influencing improved employee engagement is of particular importance as employees seek real purpose from their work and their lives.

Employees are increasingly moving from organisations that don’t align with their values and often the interview process now includes a reverse interview where the potential candidate wants tangible examples of corporate culture.

The beginning of every year sees employees reconsidering their careers and seeking a fresh start.   Organisational responses to ESG matters and culture have an enormous impact on these deliberations.  The resource industry in particular is reeling from a year of sexual abuse claims, discrimination and poor environmental and cultural decision making.  This makes staff retention even more problematic.  There are effective tools that support a good ‘cultural fabric’ – these tools can support a recovery from these events.

My colleague and fellow RSM Partner, Pippa Hobson recently noted in The West Australian that:

“The mining and resources sector has a gender discrimination and diversity problem that isn’t improving despite the best intentions of government, industry and the community.” 

In terms of contemporary company cultural issues, gender and diversity matters have certainly been the elephant in the room.  Recent reports have let the conversation unfold and it’s pleasing to see additional actions being taken.

RSM ARE ABLE TO SUPPORT THE INDUSTRY TO DRIVE THIS CRITICAL CULTURAL CHANGE. 

Cultural audits can provide information regarding the gap that needs to be bridged and provides a barometer for culture improvement.  Organisations must identify what their desired culture is and the values it promotes to achieve its purpose and strategy.  By understanding this and bridging the gap between the current and future cultural states, the sector will benefit enormously and attract and retain the additional talent it needs. This improvement will need to address many values-based issues and is not isolated to the issue of sexual harassment and discrimination.

For example, procurement strategies that intrinsically consider global issues such as diversity and modern slavery (not just the best ‘bang for buck’) indicate a values proposition that is headed in the right direction.  Not only does this speak to an organisation that is a good corporate citizen, it is also reflecting the values of many of the potential employees in the market.

There needs to be a laser focus on transforming culture within the sector. A heightened focus on the wellbeing, security and engagement of the teams.  Providing a great place to work translates into a higher performance and longevity of these valuable businesses and the industry as a whole.  No-one expects change to occur overnight, but we must hasten the pace of change. For change to happen, it must be championed and modelled by leadership.

Seeking independent professional advice may be prudent in considering any cultural change program, be it a major game-changing program or a finessing of the current cultural construct.

While it’s likely that your HR department already runs employee surveys, it’s worthwhile engaging a third party to independently conduct your cultural audit – staff are generally more comfortable speaking openly when they know the third party will keep their comments confidential. This results in more honest and insightful outcomes for management and the Board.

All too often our clients get a surprise – real insights that they weren’t always expecting. Once the initial shock passes, management are often grateful as they now have the insights they need to take action.

Cultural audits unearth the values and behavioural traits of your people. This allows you to uncover potential problems before they substantially impact your people and your corporate reputation.  You may value honesty, integrity and safety above all else. But if your current leaders and staff have a philosophy of “tonnage at all costs”, then it’s unlikely that values like honesty and integrity will place first in daily business decisions.   This can be seen in cases of poor KPI construction, for instance in safety where near misses may not be reported in order to reduce the negative feedback that may accompany high levels of incidents being reported. 

In one culture audit we conducted, a small group of site staff flagged concerns about the low quantity of personal protective equipment (PPE) at their operating site. Their default view that “management didn’t care” was quickly changed when management immediately added additional PPE to the inventories on site.  Those senior leaders demonstrated their leadership and positive safety culture – there is no better form of leadership.

The key to cultural audits is to focus on the behaviours that are most important to meet your organisational values,  business goals and purpose. There is never a one-size-fits-all approach because the values you promulgate are unique to your goals and aspirations.

I’ll conclude with a quote that summarises our view beautifully. Louis V. Gerstner, Jr. former chairman and CEO of IBM, when discussing company culture, said:

“Until I came to IBM, I probably would have told you that culture was just one among several important elements in any organisation's makeup and success — along with vision, strategy, marketing, financials, and the like... 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 organisation is nothing more than the collective capacity of its people to create value.”

ENGAGE RSM FOR YOUR CULTURAL AUDIT

Cultural audits are an excellent way to identify a wide range of risks – including those that could impact your performance, risk management and reputation.

RSM Australia’s Risk Advisory Services team has a strong track record in delivering cultural audits in relation to key values such as integrity and safety. We have also delivered cultural audits on key enabling behaviours, such as change management and risk management.

We deliver culture audits that are custom designed to address your values and desired behaviours. We focus on the health of your organisation’s culture - be this through surveys, workshops, interviews or review of company materials (i.e. complaints). We can be engaged on a one-off basis or as part of a cyclical health check to ensure your board and executive obtain meaningful and insightful results to support the achievement of your goals.

For more information

For more information, please contact your local adviser.