We have finally reached the end of our series about employee engagement seen through the lens of the Barrett Values Centre. Last time we covered the way the three different types of mind impact employee engagement (read it here), prepared the discussion for our final topic: cultural entropy and cultural risk, key concepts every team leader should be wary of.
Cultural Entropy – the No. 1 Enemy of Employee Engagement
Cultural entropy represents the amount of energy consumed in an organisation on doing unproductive work that does not add value. It arises from limiting values as bureaucracy, hierarchy blame, internal competition, etc. When cultural entropy is high, engagement is low and viceversa, as we can observe in the figure below, based on research carried out by the Barrett Values Centre and Hewitt Associates in Australia and New Zealand.
The different levels of employee engagement as seen in Table 1 are affected by different levels of cultural entropy. Table 2 below shows the effects of high cultural entropy, based on research carried out by the Barrett Values Centre in over 1,000 organizations where cultural values assessments were undertaken during 2007 and 2011.
A Significantly Growing Risk Factor in Business: Culture Risk
Without a strong set of values, ethical and integrity-based risk can spiral out of control especially if the level of cultural entropy in an organisation grows beyond 20-30%. This is the point where performance begins to stagnate and profits start dropping. The table below shows the potentially limiting values which correspond to levels of entropy and the corresponding levels of cultural risk.
High entropy cultures encourage unethical behavior and corruption in order to meet targets and as performance gets worse, controls are increased and cost-cutting measures are put in place and people feel pressured to work long hours. Low performance follows and leaders and managers try to protect themselves by retreating into their silos, blaming others and hoarding information. Employees with socialized minds quickly become disengaged when cost-cutting measures are introduced and the ones with self-authoring and self-transforming minds become progressively frustrated and disengaged when bureaucracy, hierarchy and silo-mentality, along with budget cuts prevent them from doing the work they are passionate about.
While disengaged, socialized minds become a threat to the organization`s productivity, but it is the self-authoring minds who can become truly harmful. They take intellectual capital with them when they leave or disregard ethical norms of behavior in order to secure their interests. The pressures to perform, combined with their ambitions and need for achievement can easily draw them into the danger zone of corruption. They value success over integrity so they will do anything to achieve their purpose.
There Are Two Ways to Minimize Culture Risk
The first one is top-down and it implies building a values-driven organisation. It is difficult to achieve as it requires leaders who operate from full-spectrum consciousness and have mastered all seven stages of psychological development. The rewards are, however, grounbreaking for the organisation. In a values-driven culture compliance shifts to commitment, commitment to consciousness and people understand how to achieve excellence in work and behavior. They operate with honesty and integrity because they are encouraged to do so. Leaders lead by example and encourage ethical behavior causing cultural entropy to drop. When it drops below 10% ethical integrity becomes conscious and employees are commited to shared values and a shared vision.
The second approach is bottom-up and it supports self-leadership for promotion to all levels of management. It views every employee, every supervisor and every manager in a personal journey of psychological development which needs to be measured and understood in order to modulate their drives and motivations and assess what developmental tasks they need to accomplis to accelerate their evolution. Only by leading oneself an employee becomes able to lead a team, an organisation and finally society. Only by working on their own evolution can leaders generate high engagement, low levels of entropy and skyrocket levels of performance.
If you have your own perspective on employee engagement, please share. Theories are very useful but firsthand experience remains the greatest teacher and we are curious about yours.