Do you understand your UGRs?

Over time, organisations with strong corporate cultures increase revenues five times more than other organisations

The difference between business success and failure can be found in your company’s “UGRs” – the Unwritten Ground Rules that staff often understand better than their boss.

By Steve Simpson

Workplace cultures are rarely found in mission statements or annual reports. They are usually built on the foundations of simple observation: employees coming to their own conclusions about “how things are done around here”.

These conclusions about informal workplace cultures are based on understanding UGRs – unwritten ground rules. This term was originally described by authors John Kotter and James Heskett in their landmark 1992 book Corporate Culture and Performance.

Related: 5 myths about corporate business culture

Kotter and Heskett found that over time, organisations with strong corporate cultures increased revenues five times more than other organisations. They also found that organisations with strong cultures outperformed other corporations on a range of measures, including workforce growth, stock prices and net incomes.

Clearly, there are massive opportunities on offer for companies that address and improve their workplace culture. Kotter and Heskett also raised a question as to why this potential has yet to be tapped, given that so many leaders intuitively know that their culture is not serving them well.

This is where the UGRs come into play. The complexity of understanding the concept of a real “workplace culture” is its key challenge. It was partly for this reason the authors created the concept of UGRs, to discover each workplace’s real culture.

Professional Development: CPA Q&A. Access a handpicked selection of resources each month and complete a short monthly assessment to earn CPD hours. Exclusively available to CPA Australia members.

As UGRs are defined as people’s perceptions of “this is the way we do things around here”, some sample negative UGRs from the workplace include:

  • At our meetings, it isn’t worth complaining because nothing will get done.
  • The only time anyone gets spoken to by the boss is when something is wrong.
  • The company talks about good customer service, but we know they don’t really mean it, so we don’t really have to worry about it.

UGRs drive people’s behaviour, yet they are seldom talked about openly. It is the UGRs in a team or company that constitute its culture. One of the most common questions posed in relation to UGRs is “How do we change the negative UGRs in our company?” To answer this question requires consideration of how UGRs are created in the first place. In essence, UGRs are created in three ways:

People watch what gets noticed.

For example, if someone gets into trouble for speaking up, then a UGR might be: “Around here, you’re better off not to speak up, even when you’re asked.”

Conversely, if leaders say that safety is vitally important and someone gets berated for not conforming to safety procedures, then a UGR might be: “Around here, we’re serious about safety.”

People watch what doesn’t get noticed.

For example, if someone speaks badly of a leader, and nobody suggests they shouldn’t talk that way, then a UGR might be “Around here, it’s fine to criticise bosses.”

Similarly, if a person goes out of their way to help a colleague and no-one recognises that extra effort, then a UGR might be: “Around here, it’s not worth your while to help others out.”

People watch for differences in terms of what people say and what they do.

For example, if a manager says, “In this organisation, we care for our people”, and then that same person treats a person without respect, then a UGR might be “Around here, the bosses say one thing and mean another”.

Research into a number of companies around the world has uncovered UGRs that are impacting substantially on performance at an individual and collective level. 

In the sales division of one international company, for example, 68 per cent of the UGRs relating to internal decision-making reflected the view that customers’ perspectives were not taken into account as part of the decision-making process.

Corporate cultures substantially impact on performance. It’s deserving of more serious attention than some of the lip service it currently gets.

Steve Simpson is an international speaker and author on the subject of workplace culture and customer service. He recently co-authored the book A Culture Turned.

Like what you're reading? Enter your email to receive the INTHEBLACK e-newsletter.
December 2016
December 2016

Read the December issue

Each month we select the must-reads from the current issue of INTHEBLACK. Read more now.