By Maggie Walsh, Ph.D., Vice President and Practice Lead, Leadership for Forum
Years ago, when I consulted in the health-care industry, a client of mine brought a new hospital CEO in from outside the business. It has been my experience that every new CEO needs to put his or her stamp on the organization in at least a small way. Those brought in from the outside often are paid to mark their territory. They tend to make a bigger splash, often by bringing forward a new vision and direction, a new strategy, a major revision to an existing strategy, a reorganization, “shake-up,” or all of the above.
After a few months of equilibrium, during which the CEO assessed staff, physician relations, finances, and operation, she revealed herself as a “splasher.” She did all of the above. The changes themselves would prove beneficial to the organization—the shift in strategic direction; the reorganization; yes, even the elimination of certain positions. It took place quickly, under a shroud of secrecy, with certain people “in the know” and most others not. There was no clear message about what was happening while it happened. The climate dramatically shifted from one of open camaraderie and collaboration to one of fear and divisiveness. People became disengaged, physicians began to shift admissions to other hospitals, and patient care began to suffer.
The problem was that this first-time CEO failed to understand that whathappens can be far less important to the long-term success of an organization than howit happens. I stipulate the importance of the strategy, but until the organization executes it, a strategy is just a paperweight. Execution requires the engagement of people up and down the organization. This CEO thought that by turning up the heat in the organization, she would create a climate that would enhance productivity and results. Instead, her stealth approach almost overnight severely damaged engagement across key stakeholder groups.
“Climate” is people’s perceptions and feelings about their work environment. Many people confuse climate with culture, thinking the climate can’t be controlled because it is too big and engrained in the organization. Savvy managers know the climate can, in fact, be improved and that making necessary changes will move employees from anxiety to confidence and from isolation to connection. Climate is measurable and much easier to transform, while culture emphasizes the unspoken assumptions in an organization, which can be more resistant to change. To those who believe climate is too “touchy-feely,” a positive climate doesn’t necessarily equate to more fun or relaxation at work—it means creating conditions in which people feel productive and innovative.
How do you effectively create and manage a climate that will help your company sustain leadership and yield positive business results even amid worldwide uncertainty? Following are six management practices that impact climate:
Climate may have a soft feel, but it has a measurable bottom-line impact. A positive climate improves individual engagement, enhancing performance and productivity while improving business results. Gallup’s recent poll about engagement found that 11 percent of employees were engaged, 62 percent were not engaged, and 27 percent were actively disengaged. Gallup’s comparison of the climates of top versus bottom engagement quartiles demonstrated a clear link between engagement and productivity, profitability, and greater earnings per share.
Many employees put teamwork and recognition at the top of the list of keys to improving workplace climate, but each business climate depends on the goals of the business. Focus on analyzing the kind of climate you need, whether it’s about innovation, customers, or collaboration. The good news is that climate is something that can be controlled, has an immediate effect, and does not require major investments. In the case of the CEO’s changes, if she had been transparent about them, explaining why employees were leaving and thanking them for their contributions, the work climate could have been maintained.
Maggie Walsh, Ph.D., is vice president and practice lead, Leadership for Forum. She leads Forum’s leadership development practice, providing thought leadership and working closely with internal practitioners and clients to continually refresh Forum’s understanding of real leadership issues and needs. Over the years, she has played a role in developing a number of Forum’s leadership and sales capabilities.