18 feb 2022
Making soulless companies a thing of the past
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To coincide with the launch of his new book, Building Corporate Soul: Powering Culture & Success with the Soul System™, we spoke to author Ralf Specht, founding partner and former CEO of Spark44, the global joint-venture marketing agency.
Never thinking that he’d do so, the messages from well-wishers about the strong culture he had helped to shape at his company propelled Specht to write the book because as he puts it, “I wanted to give something back”. Contemplating corporate culture, an article he read in the Harvard Business Review inspired and led him to the idea of ‘soul’, a concept he felt could be applied to all organisations.
A fascinating insight on how to maintain a strong culture through all phases of growth across sectors and companies of different sizes, the book explains why corporate soul lies at the heart of increased worker happiness, greater commitment and improved business performance. Companies that have achieved that level of corporate culture have made the leadership behaviours that build soul synonymous with the behaviours which build success.
Here are the top takeaways from the key topics in the book.
Please define what you mean by ‘corporate soul’. Why did you choose the word ‘soul’?
RS: Every company has its culture but only some have got what I call ‘corporate soul’. This means that a company lives its purpose, has built its strategy on that purpose and the behaviours with all stakeholders fully reflect them. There is a German saying ‘Er (oder sie) ist die Seele des Unternehmens’ which means ‘he or she is the soul of the company’. I believe that there is a lot of wisdom in this expression. Harvard Professor Ranjay Gulati believes in the “soul of a startup”, which in his eyes captures the energy inside a company that is so unique.
Companies with soul are masters in creating an integrity between words and actions.
What has inspired you to write the book and develop the Soul System?
RS: The messages I received from my colleagues when I stepped down as CEO of Spark44, an industry first joint venture with Jaguar Land Rover, went beyond your typical farewell good wishes. They included a contemplation of the culture that I and my founding colleagues had been able to establish – a culture summed up by the values ‘Be Bold, Be Brave, Be Honest’ which were our north star and which we lived day in, day out. As I was reading the messages again, I felt they were too valuable to be left on my iPhone and that’s where the book idea came from. But it’s s not about me, it’s about what both I and other leaders have experienced when building or reinstating a human centric performance culture. What we learned is the foundation of the Soul System.
Which elements define the Soul System?
RS: It starts with purpose, which has become a buzzword over the past decade. I’ve seen many exceptionally well written purpose statements that board directors never associated with, let alone reach frontline employees. In other words, they were pointless. The Soul System defines the first level as ‘shared purpose’ – shared by the entire executive team and shared with all stakeholders. The second level is what I call ‘shared understanding’, which builds on the shared purpose and defines vision, mission, values and spirit. Spirit is often overlooked and for me is the very essence of the desired corporate culture. The third level allows the leap from theory into practice, this I refer to as ‘shared behaviours’, which encompass all the interactions inside a company, aligning them with the shared purpose and understanding.
What are the key characteristics of companies with a corporate soul?
RS: Their workers are engaged with a capital E. Companies with soul understand what ESG [Environmental, Social and Governance] means for their business and take visible action. And their leaders walk the talk. Basically, they have established a recognisable level of integrity between the intentions of purpose and strategy and the actions of the organisation. Tech companies for example, which feature prominently in the Soul Index, realised early on that human capital is their only capital and pioneered many principles that companies in other industries have started to adapt.
Outline the key steps for leaders to implement the Soul System™ framework?
RS: It starts with self-reflection. ‘Have I bought into the purpose of our firm?’ ‘Is the proposal that is presented to me in line with our mission?’ ‘Are we handling internal promotions in a fair way?’ These are just a few of the 70 questions for leaders contained in the book to help them do the appropriate soul searching across all key aspects of corporate realities. The key steps are to ensure buy in to the shared purpose and the strategic imperatives and then to get down into the ‘nitty-gritty’ that impacts both employee and customer experience. This will ensure that they live up to what was defined in the boardroom. While it’s not rocket science, it does however require an open mindset and an unwavering belief in the shared purpose.
And what are the key leadership traits that ‘build soul’?
RS: Where once leaders knew that they would themselves be a topic of conversation among their teams perhaps over the dinner table, in today’s social media world, word can spread like wildfire. Employees have a built-in radar when it comes to believing what executives tell them or not as the case may be.
Integrity is the number one leadership trait that builds soul.
How do you go about aligning employee behaviours with corporate strategy?
RS: Two components are essential: 1) communication, communication, communication. You might have thought about all of your strategic documents but have your people fully understood the direction of your company? We have all been in town hall sessions and wondered what exactly has really landed with the team. You cannot communicate enough and you need your team with you. 2) Involve your staff, not just your first line of management. Employees usually have a good sense of what works and what is just bluff so make them part of the solution. They may even have a better understanding of the behaviours that align with the shared purpose. In doing so, you get a double benefit: a higher level of commitment from your people while creating internal ambassadors to spread the message. I call these individuals internal influencers.
Can businesses that hire and fire people really be considered a family [the concept of the Hawaiian word ‘Ohana’, which Specht talks about in his book]?
RS: At times, leaders have to take hard decisions and let people go. Companies with soul do it in a way that recognises the realities of the situation while managing the process so it does justice to the soul of their company. Look at the approach that Airbnb’s Brian Chesky took when they had to let go 25% of their workforce during the pandemic. It was full of dignity, empathy and support for everyone, the like of which I have never seen before. Those staying were reminded that the contributions to the business of the exiting employees mattered and that they would always be part of the Airbnb story. It was the level of trust with his people that made this approach credible.
Talk to us about the role of ESG and D&I in boosting culture and performance?
RS: The best employers have significantly higher ESG scores than their peers. This matters greatly to the Millennial and Gen Z generations, more so than the Gen X baby boomers, who will make up more than 70% of the world’s workforce by the end of the decade. They expect employers to keep pace with this trend. D&I is a driver of value creation and profitability across industries on all continents. And it strengthens culture as well but only if it is real so it needs to be included in the business strategy, needs to be a vital part of the organization, not just an afterthought. Leaders need to take this seriously and define clear KPIs to ensure they identify what I call ‘soul drivers’ inside the organisation at every level, identify the next generation of leaders, deploy talent, improve performance and actively work on removing bias. It’s a big ask but the rewards are huge.
ESG performance helps companies both improve employee satisfaction and attract prospective new workers.
Culture is key to improved loyalty and performance, isn’t it?
RS: The O.C. Tanner Culture Report defines companies with soul as thriving cultures. They are 13x more likely to have highly engaged employees, have 8x the incidence of great work and 2x the likelihood of increased revenues Plus, employees in thriving cultures experience 3x fewer burnout situations and those companies are 3x less likely to face layoffs!
What is it about the startup mentality that builds corporate soul?
RS: Startups are fast, intense, and incredibly purpose driven. They have an innate energy that gives them soul. That mentality is important. It starts with creating an environment of clarity with all stakeholders. But that clarity is a means to an end, it is about creating a shared commitment by all stakeholders to get fully behind the new direction. Not because they are told so, because they believe so. While you are more likely to find soul in startup mode, the problems begin when you scale up and you find yourself with a different company 12 or 24 months later – and somehow the culture gets lost. But there are established companies that have been successful in rebuilding the soul of the corporation, which are mentioned in the book. LEGO is a great example of a turnaround that ticks all the boxes as is Hilton Hotels and most recently, Bentley Motors. Turning a company around during a pandemic and having to navigate Brexit is an incredible achievement.
How can companies better connect with their people in a remote working world?
RS: This is a huge topic in its own right. A virtual workforce requires even stronger leadership skills. Clarity is critical. What is expected of home workers? What are the standards of performance? Communicate, communicate, communicate. Create experiences outside the work environment that allow teams to come together in one physical space. Assign personal mentors when onboarding new joiners. But above all become a role model for transparency in all employee interactions. Empathy helps. Find ways to support parents who work from home by providing childcare support. If it is not possible to meet physically, create virtual social events. And crucially, keep your eyes and ears open for potential mental health issues affecting your people.
What should jobseekers look out for as key signals that a company has ‘soul’?
RS: Jobseekers need to do their homework and fact finding on portals like Glassdoor and Great Place to Work. Read very carefully the feedback from previous employees and what fellow jobseekers have shared about their interview experiences. Really take it seriously. If you come across negative comments, pursue this in your interviews and find out whether things have changed or not. My recommendation is that just as companies seek employment references, you too should ask to be connected with three employees who are happy working for the company. It is also very important that individuals understand the culture of an organisation and what the culture requires of them. But while cultural fit is important, you don’t want to create a company of clones either!
And finally, what’s your number one piece of advice for CEOs/business leaders in 2022?
RS: In the age of ESG, customers and investors increasingly want more information about workplace culture. It’s becoming a key factor for jobseekers. According to a 2021 McKinsey survey, the three chief reasons employees cited for leaving their current jobs were a) ‘not feeling valued by their organization’ (54%), b) ‘not feeling valued by the manager’ (52%) and c) ‘lacking a sense of belonging’ (51%). If people are your biggest asset, you need to take heed of this.
Culture trumps brand.
Learn more about building corporate soul.
Curious to know your company’s Soul System score? Take the test.