I often get asked what the difference is between culture and engagement and do we need a separate measure?

Deloitte explains it succinctly. Culture describes “the way things work around here” and Engagement describes “how people feel about the way things work around here.”

Culture and engagement are connected but they are different. A healthy culture breeds high levels of engagement where people supply their discretionary effort.

Reflecting the Aon Hewitt Say, Stay, and Strive model, people who feel engaged say positive things about the organisation, they want to stay around and they strive to contribute to its success. The opposite is true when people are disengaged.

Recent research by Hewitt and Barrett Values Centre as part of a Best Employer study of 163 organisations in Australasia showed a strong correlation between cultural entropy or dysfunction and engagement levels. High entropy equals low engagement.

From a financial perspective, the study also found that in organisations with healthy cultures and high engagement scores, growth exceeded 35 percent over a three-year period. Organisations with higher levels of cultural dysfunction and lower engagement scores grew only seven percent over the same period.

Both culture and engagement merit attention but in an integration context, culture comes first. If leaders get the cultural foundations right there’s a good chance the rest will follow.

Failure to engage

The latest research from Gallup indicates that despite all the time, effort, and investment poured into engagement over the past several years, many organisations are failing to move the dial on engagement.

I’ve seen corporates lurch from one engagement survey to the next. By the time they do the survey, analyse the findings, discuss it with the leaders, communicate the (often sanitised) results, and figure out what they’re going to do about it, there is no time to actually implement and embed their improvement initiatives before the survey process starts all over again.

The importance of an engaged workforce is a given. Engagement surveys and initiatives have their place in M&A situations, at the right time.

Here’s an example of how things can play out:

Four months into an acquisition and merger of two significant players in the telecommunications industry, engagement scores were looking good. Many of the senior leaders in the acquiring company congratulated themselves on a transition job well done.

Staff in the acquired company were happy. Only a small percentage of around 4,000 people had lost their jobs. They had received pay rises and additional benefits to bring them into line with their peers, they had their new tee-shirts, caps, and mugs. The morning teas and team building activities were fun and they’d pretty much been left alone to get on with their work. Everyone was on a high.

Then reality set in, structural and operational changes came into play, senior people departed, culture clashes emerged, and the honeymoon period was over. Next time around the engagement scores were the worst the acquiring company ever had. Those same leaders were now overwhelmed and unsure of where and how to start the recovery.

In this case, if the leaders had focused on strengthening their cultural foundations and communicating expectations, as well as aligning HR policies and practices, the results would likely have been different.  Click here to find out more.

To your success,

Linley Watson
Australasia’s Authority on M&A Culture Integration