When business is good, positive feelings can be felt inside just about any organization. And why not? Sales are coming in and money is available to incentivize all performers, not just those at the top. However, during recessionary periods like this one, the tone inside most companies—perhaps even yours—is probably quite different.

What Not To Do

As sales slow, people become nervous and edgy. And although everyone may boost efforts, pressure mounts. The result: finger pointing begins and silos between departments or teams rise. And worst of all, a company culture built upon mutual trust begins to fade.

At times like this, executive management—the folks I typically coach—often say it’s time to get tough with the workforce. Statements like “Let them know they need to work smarter and harder... tell them they need to really start applying themselves or heads will roll!” are common. Is this positive reinforcement or punishment?

Decades ago, the college course Introduction to Psychology taught many of us that actions reinforced are more likely to occur again; actions punished are less likely to occur. With that in mind, it’s obvious that the message above is one of punishment.

So why do so many executives punish more and reinforce less? Read on.

Participatory vs. Autocratic Cultures

More businesses are beginning to appreciate the power of culture as a bona fide business driver. Culture—the sum total of how all people in an organization work together—is measurable and real. Some cultures are autocratic: management tells the workforce what to do. On a good day the workforce complies but doesn’t often excel.

Other cultures are participatory: management and the workforce combine their resources and work in a collaborative and cooperative manner. Research has clearly demonstrated that a participatory culture not only feels better but produces superior business results. (For more information, visit www.denisonconsulting.com.)

In a participatory culture, people believe that in both good and bad times, there are fundamental ways everybody should treat each other, regardless of seniority or responsibility. This type of culture is not a democracy, but everybody participates in making the company work well. It also creates an “evergreen” environment where people fundamentally believe in and trust each other. The bottomline: people cover each others’ backs.

Strong Communication Is Required

Importantly, a participatory culture demands an environment of strong communication. Why? High degrees of trust require a culture of strong and open communication. But successfully sharing information is more complex than it often seems. To achieve this culture, for example, management needs to obtain a consensus from employees on what the company is doing right and wrong, how the workforce is performing, how to give praise for a job well done, and how to correct for things that don’t work so well. Overall, high communication cultures create a number of mutually reinforcing touchpoints similar to the way in which an external marketing program operates. Several legendary companies, like Southwest Airlines, embody this style. In my locale, Palmer Food Services and Canandaigua National Bank are included in this category.

Unfortunately, a participatory management style is more difficult to achieve than an autocratic style.

Many Managers Are Familiar Only With Autocratic Cultures

Autocrats typically bark orders and demand results that usually don’t materialize—especially during tough times like these. The barking usually feels good, if only for a short time. This is one of the reasons managers do it. The other reason: frustration.

Unfortunately, most managers don’t understand how to perform in a participatory environment—the second reason why they are autocrats.

Investing in Your Workforce Even During Difficult Economic Times

A recent Wall Street Journal article noted that even in bad times, good companies invest in leadership development. Investing in your leaders, and ultimately in all your employees, sends a very powerful message that they are important and worthy. Employees appreciate this and will return the favor in terms of higher performance and greater innovation. However, establishing a participatory culture requires an investment of time and money.

How To Build A Participatory Culture

The first step to building a high trust, participatory culture is to truly believe in its value and understand that it’s the wave of the future. Second, start talking about it with senior management. Let them know you are serious and want their undivided attention on this matter.

Also, suggest they read The Five Dysfunctions of a Team by Patrick Lencioni. This is one of the hottest business books right now and for good reason. I have recommended this to many of my clients. Interestingly, all of them have a similar reaction: they feel the book was written about their organization.

Next, have senior management embark on a two-day retreat, preferably off site and professionally facilitated. During the retreat, explore how your organization’s culture does or does not inspire trust and the impact this has on the organization. At the end of the retreat, ask your team to commit to working hard to trust each other. Once your senior management team has committed to establish a participatory culture, you’ll need to cascade this information down into other levels of the organization.

This process will be a journey—and not one that follows a straight line. Expect to go off course from time to time, and feel the need to “get back to business.” But in time you’ll undoubtedly experience the importance of building a trusting, participatory business culture. Good luck!

Dr. Jim Kestenbaum, a corporate psychologist, is founder of The Solutions Group (www.tsgdrjim.com). This article appeared in Impact Analysis, March-April 2009.

Jim Kestenbaum
About The Author Jim Kestenbaum
James Kestenbaum, Ph.D., a corporate psychologist, is founder of The Solutions Group.

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