Is Your Workplace Culture Ready for AI?

Erka Amursi: The higher you are in the hierarchy, the more power you have. Culture is the thing that changes last. The bigger an organization becomes, that's a challenge. Focusing on the culture is important

Steve Odland: You are an expert in culture. What makes an expert in culture?

Erka Amursi: Oh, wow. That's a difficult question. I can only say that I have studied culture for a long time.

I don't know if it makes me an expert.

Steve Odland: Decades and decades. We're talking about corporate culture. This is a big deal because every company, whether you think you have it or not, even if there's more than one person, there's two people in the company, there's a culture, right?

Erka Amursi: Yeah. Any time there is a group of people, there is an organization, there is a culture.

You can be aware of it or not. You can be intentional about it or not, let it just happen, but there will always be a culture out there.

Steve Odland: One way or another, whether you tend to it or you ignore it, there is a culture.

Erka Amursi: There is.

Steve Odland: And sometimes in companies there are multiple cultures if you don't work at consistency.

Erka Amursi: Yes. The bigger an organization becomes, that's a challenge because you may have different smaller climates in different parts of the organization, and it's normal because the organization may be global. It may be spread out. The national cultures may impact it as well, so there is some variety out there, but unifying that culture is important.

Steve Odland: Yeah, that's an interesting comment because there are cultures within a country. There are cultures across countries around the world, and increasingly as businesses engage globally, maybe either in their supply chain or maybe in their operations and their customers, you're dealing with multiple cultures.

So you got that. That's one level of it. Yeah. But the internal culture has to deal with all those constituencies as well. We're going to talk a little bit about that. But this is a weird time. You and I have been talking about culture. You've been writing about it for a long time. This is a different time now, and we're on a new frontier with AI, and it is changing things, isn't it?

Erka Amursi: Yes, it is. AI and the amount and unstoppable changes that are happening around us are impacting organizations and especially their cultures. Focusing on the culture is important. I've read about CEOs now that spend a lot of time focusing on the culture because they know that it's a good investment.

Steve Odland: Whose job is it to tend to culture?

Erka Amursi: I think everybody's job, but the higher you are in the hierarchy, the more power you have, the more influence you have, the more opportunities you have to impact culture. But culture is impacted by everybody.

Steve Odland: Yeah. You're right. There's an echo chamber, and it's a louder echo depending on where you sit in the organization, but it really is the responsibility of everyone to contribute positively..

Erka Amursi: Yes

Steve Odland: ..to a culture, right, and to be part of it.

Erka Amursi: Yes, even in smaller teams, you can see how different personalities impact dynamics. Adam Grant is an organizational psychologist that I like to follow. He has done this study about givers and takers in the organization. And he has also an assessment that you can be a giver, somebody who helps others, who is supportive of other team members.

You can be a taker focused only on your own interest, or you can be someone in the middle that gives something in order to receive something. And his research shows that the givers at the end are the most successful ones. At the end, they are the ones that are more beneficial for the whole organization.

Steve Odland: But isn't that true of any relationship, though? We're talking about human dynamics after all, right? Yeah. Yeah. Whether you're talking about a partnership or-

Erka Amursi: Yeah ...

Steve Odland: or a marriage, you can't say, "I'm going to give part and I'm going to take."

Erka Amursi: Yeah.

Steve Odland: It has to be unconditional. Parenthood's the same thing where you have to be willing.

And that dynamic works best.

Erka Amursi: Yes, and these givers give, have a positive impact on the culture because other people like them, follow them, while takers create a different kind of microclimate because if you see somebody who's interested only on his own or her own personal interest, and this person is getting promoted, is getting ahead, that, oh, that style works here, so I need to be more selfish, more focused on my own interests because, and because that works.

So we see how people with different inclinations, different personalities behave in the organization, but we also see how the organization treats them. And that is a common learning that impacts our culture.

Steve Odland: Human beings are social animals. Yeah. But as a species, we seem to understand hierarchy. The culture top-down, it's more in the DNA.

You've talked about it, and it's interesting. It's oftentimes at the pure level where culture is most tried. There's a lot of tension sometimes because there's competition- Mm ... peers, and there isn't that hierarchical. Talk a little bit about that.

Erka Amursi: Team members impact the climates of their own teams and departments, but it's also true that It's the leaders at the end who decide which behavior they're promoting and which one they are not.

Yeah. That's why going back to what I said at the beginning, the bigger the influence you have in the organization, the bigger the influence you have in creating and changing culture.

Steve Odland: Yeah, but it doesn't change the responsibility. Let's go back to AI for a minute because you mentioned the amount of change that's going on, whether it's AI now, but lots of different reasons for change, whether it's a merger or divestiture or a new business line or growth.

You're changing every day. If you're growing, whatever that is, there's change in an organization. But there is a lot going on with AI, and you've talked about that culture is challenged because of this rapid change. Talk more about that.

Erka Amursi: Yeah. Culture needs some consistency. Culture is the thing that changes last.

You look at the culture for some kind of slow pace, some kind of old-time rules and values. Culture is that stable thing, at, at least how we perceive it as people. But now with all these changes coming so fast, one after the other, nonstop, continuous changing, this is impacting the way we see culture, the safety that we try to find in that kind of stable set of beliefs and values.

And when the change is coming fast and when you are moving fast, you need culture to be your ally. You don't want culture to be in your way. And the problem is sometimes culture has worked fine for an organization for decade, and it has been reinforced. You believe in those values over and over because your experience has showed that they are important, they make you successful over time, and this is the benefit of it.

But this can be the challenge of it because you think that those values are the ones you are not going to change, and a different environment may require different sets of values and beliefs.

Steve Odland: Yeah, and your point is that culture has many dimensions to it. Yeah. It can be great in stable times if you've got consistency, but if you're trying to engage or drive change, sometimes the culture roots you and cements you so that you can't adapt or you can't bring things on.

You have to have some dynamism in your culture, or at least an openness to change. Again, we're all human beings. In order to get that to work, you've got to remove the fear factor, right? Because people don't want to change if they're afraid. But people like excitement and positive things, right?

It's a matter of how you implement it and how you lead it. Yeah. You introduce in your recent paper a framework that uses four dimensions. Talk about that framework and what are the dimensions.

Erka Amursi: Yeah, we are very excited about that framework because really as a team, we're deeply focused on developing a model that would help everybody have a common language about what we mean when we talk about culture.

And also a model that can help us change it. If you understand it, if you understand all the components of it, you are also able to understand what is working, what is not working, what do you need to change, and how you can do that. That was the purpose of this model. And studying it deeply, we identified four dimensions of culture.

First of all, the thing that our study confirmed is that culture is not one unified concept. It's made of different elements and different dimensions. Understanding them is important. And we identified four dimensions. The first one, strength, culture strength, where it's the dimension of the shared values and norms, how well are you doing in sharing and having a common understanding of your mission, values, beliefs, systems, etc.

The other dimension is culture health, where we focus on psychological safety, the trust that employees feel about each other and leaders, their own experience in the organization, the level of respect, the ethics, the sustainability of the workload, are they burned out or not. All of this creates that healthy experience for the employees that we call the health dimension of culture.

And then we identified the other two dimensions that are adaptability, culture adaptability, the ability to challenge status quo, to experiment, to test new things, and feel safe to do that in an organization, to continuously learn about new things. And the fourth dimension is consistency, the alignment between what you say you value and what you actually value, and you demonstrate that through the behaviors, especially the leaders' behaviors or the rewards systems.

Steve Odland: So strength, the, the health of the, of the, uh, of the culture, adaptability, which is where AI comes in or any change, and then consistency which is important because you, you can't have... You can't balkanize your cultures and have, you know, subcultures and everything. That just is very destructive.

So these are the four dimensions. How do you measure these dimensions in a company?

Erka Amursi: We are working on building a tool, a diagnostic tool that can be useful for organizations to measure this dimension. But the questions that we have in our survey can be a very good starting point because we measure the reliability of the questions, and we have good reliability, good statistical data that support our model.

For each of these dimension, we have five questions That measure different aspects of the health, as I said. One for trust, one for psychological safety, one for ethics, et cetera. I would recommend using our tool. There are other tools that-

Steve Odland: So where do our listeners find these questions that you used as the basis?

Erka Amursi: We have published them in our report in the appendix. Yeah. And we are planning to write a diagnostic, to publish follow-up diagnostic.

Steve Odland: You can find this report at our website, tcb.org, and click on the Human Capital Center, and you'll find Erka's report in there. The questions behind it, which you're saying that people can deploy in their companies to measure their strength on each of these dimensions, right?

Erka Amursi: Yes.

Steve Odland: Yeah, very interesting.

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Steve Odland: There are organizations that when you get inside the organizations, everybody's got their strengths and their weaknesses. Every organization does. Most of the time you can see this from the outside, and you can just say, "That company has a great culture." What is it that we're seeing when we say that about a company?

What is it that we're seeing from the outside that makes it great?

Erka Amursi: There are things that you can easily observe. You can go in the building, and you can observe how people walk, how people talk, how they dress. Are they working all alone, or do they communicate with each other?

Steve Odland: Are they smiling?

Erka Amursi: Are they smiling?

There are a lot of things that you can notice just by observing, and I remember when I was a student studying culture, and I was trained about interviews with potential employers, and I was trained to observe these artifacts and these behaviors even before starting an interview.

Steve Odland: So this isn't rocket science.

You can't tell by looking at the building, right? You can't tell by the bricks and the mortar and all that. It's the people.

Erka Amursi: Yes.

Steve Odland: And how they're behaving, how are they interacting, and that's how you see it.

Erka Amursi: Yes.

Steve Odland: And oftentimes you can see this, especially with companies that are consumer-facing, right? Retail companies, you can walk into a store, and you can just feel it by the basis of how the employees are treating the customers or interacting with each other, and it sometimes feels good, and it sometimes doesn't.

You can see this, the culture.

Erka Amursi: Yes. But also, the artifacts can also play a role, even the walls. If you come to The Conference Board, we have our history showed in different places, the old studies, thick old books that are out there. That shows how proud we are about the culture. So you can also use artifacts to get some impression.

Steve Odland: So there is some physical…

Erka Amursi: Yeah, there are some physical too ...

Steve Odland: Yeah, physical highlights of it, but it does come down to the people. We live in a multi-constituency world. Leadership of a company has to balance the customer, the employee, the owner or shareholder, the community, the environment. We could talk about these as constituencies, but multiple constituencies, and culture has to adapt in order to optimize that interaction with all of them.

You can't just, you can't just be good on one dimension.

Erka Amursi: Yes, it's true, but it's also true that being good on one, with one stakeholder helps the others as well because the happier people feel, the better they will communicate with the others. There is some research out there showing that when employees are engaged and satisfied, they have better customer evaluations. Interaction.

Steve Odland: And that's true in the retail stores too, where you got management kicking the employees. It goes down, and the last person that gets kicked is the customer. It is readable, so that... it's an important point. It's all interactive then, right?

Erka Amursi: Yes.

Steve Odland: Yeah. So how is AI changing culture conversation in companies?

Erka Amursi: It is changing. We are hearing about AI culture now in different articles. People are talking about how AI is potentially going to change organization culture. With AI, we don't know much. It's difficult to foresee and predict. And what we are finding interesting is that even with the survey that we sent out for the study, we saw that employees were both optimistic and a little bit afraid.

They were highlighting the risks, and they were highlighting the opportunities that AI is bringing to the culture. Employees believe that they will continue to be valuable in the workplace in the future, even though AI will be immersed more and more. But they also believe that maybe AI will erode the culture.

They also believe that they will collaborate more. They also believe that they may be more isolated. There is this high belief in potentials, opportunities, but also risks.

Steve Odland: It's a Wild West, and it's unknown. And whenever there's unknown, there's fear, right? You're seeing that where the cultures of a company is to be open and transparent, that AI is being received better because it's not frightening to people, that leadership teams are sharing, "This is what we're doing. This is the purpose, and we're not looking to take jobs out." You have to communicate. This is all part of culture, and so if you want change, successful change, part of successful change management is to be open and honest and transparent and direct. These kinds of cultures are having more success with AI.

Erka Amursi: Yes. And I see how this is changing now with AI because when we talked about change management, we used to have those change management projects where the future was clear. You had the vision. You had, "Oh, this is the current state. These are the problems, and this is the future state. And here is what we are getting in a year or after we implement this new system."

Or program or whatever. So it was clear. You'd go with a clear statement of problems and a clear vision for the future. Now, with AI, we enter into changes where the vision for the future is not clear, and I think it's challenging for leaders communicating these changes without that clear state.

But many organizations are doing it, saying that, "Yes, we know the future is not as clear, but we also know that we cannot stay in the same place. It's more problematic not to change and not to follow all these advances that AI is bringing. But we are moving into this together."

Steve Odland: And so you should just acknowledge that. Companies should just say, "Here's what we know and here's our position on it. Here's what we don't know. But we promised to work together in the open."

I think that's the best you can do sometimes when you're with something that's as undefined as AI. We don't really know where AI's going to take us, but we have to remove the fear, right? People get up in the morning, they put their clothes on the same way, they get out of bed at the same way, they drive to work in the same...

People like routine and ritual because it's stress reducing, and when everything's thrown into chaos, it creates stress. We as leaders in a company need to just understand that and be sensitive to that. The most successful cultures are the ones that do that and look through that lens. Because there are a lot of people, a lot of companies that go, "Oh, it's confidential. We can't tell you." Okay, then what fills the gap? It's gossip. Yes. People will talk regardless, and that's not good, right? It's uncertainty. It's lack of trust. In any change, the culture matters.

Erka Amursi: Especially now, because we can say that, "Oh, we are going to be transparent. Oh, we are going to share anything," but you need employees to trust you in that, and you need to demonstrate that with any small changes that you are doing in the organization.

Because if there are unexpected, for example, layoffs or dramatic changing in the organization structure without any prior communication or transparency, you are hurting trust and you are hurting culture.

Steve Odland: What should CHROs and really all business leaders be thinking about and doing if they really want culture to be a driver of employee engagement?

Erka Amursi: First, measure culture, because-

Steve Odland: How?

Erka Amursi: Use diagnostic tools. Come up and- Your survey ... use ours.

Steve Odland: You can use ours. You can use your survey, but measure engagement.

Erka Amursi: It is important to have an understanding. When we talk about culture, we talk about these dimensions, and we're going to measure this dimension, and we are going to see how we are doing, because we may be doing very well in one but not so well in the other.

And then finding out where you are not doing so well and then identifying what you can do to improve. If it's trust that you are not doing well with, once you know it, then you know that you have an issue with trust, and you need to do whatever you can to rebuild it.

Steve Odland: I think most leaders would tell you they want to be perfect in every dimension, right? And so sometimes they only ask the questions on which they know that they'll get a decent score, and they don't really address the elephant in the room. Is that a good strategy?

Erka Amursi: For failure, yes. I've seen leaders who have shown me, "Oh, I did this 360 evaluation and look, I had no one complaining. It's all perfect. I don't need coaching." I'm like, "Oh, wow. That's why you need coaching." Yeah. Culture, I believe, is impacted highly by leaders, and it's impacted highly by their level of self-awareness. If you are not aware about how your personality is impacting your culture, it will be challenging. You are going to be in the dark.

Steve Odland: Beyond personalizing it, it's interesting because you do want things to be looked at. You want people to be happy. You want the scores to be good, but sometimes there are dimensions where you need work. And it's often best to just tell everybody, "All right, this is a score we didn't like, but we're hearing it. This is an area we need to work on, and we're going to be talking about this, and, you know, we're going to focus on it."

Oftentimes people give a lousy score because they want to grab somebody's attention to the issue, right? And it's not that everybody expects leadership or companies to be perfect in every way, it's just they're trying to help, too, and it's one of the few ways they have to make suggestions.

Erka Amursi: Yes. I believe it's in everybody's interest, any employee's interest, to have a good-performing culture because it works for the organization as a whole, but it works for everybody individually. You feel better. You feel more respected. You like your work better. The outcomes of it are not just for the bottom line, that is important to emphasize, but impact a lot of outcomes throughout organization, employees, teams, everybody.

Steve Odland: Any final thoughts that we haven't talked about from your paper that you'd like to share with our listeners?

Erka Amursi: I just wanted to highlight that culture is not a very unified concept. There are different dimensions that are important to be aware of, to understand, to measure, and if you are going to focus on improving, changing culture, all these elements that we have highlighted—strength, adaptability, consistency, and health—are important.

But our research showed that the health component is the stronger one, so prioritize psychological safety, especially in these times. Trust, prioritize, respect all the ethical elements.

Steve Odland: All those things. Okay, your paper is entitled Organizational Culture: What Really Matters? And it's on our website at tcb.org.

Look at the Human Capital Center and then look for Organizational Culture: What Really Matters? And the basis is the survey, the data that you collected from companies, and that survey is in the appendix. People can use that survey actually for their own company, not just to aggregate data, so really a useful tool for all of our listeners to tap into, right?

Erka Amursi: Yes, we hope so.

Steve Odland: Yeah. Okay. Erka, thanks for being with us today, and I hope everybody reads your paper. It really was an excellent study.

Erka Amursi: It was nice to be here. Thank you.

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