Summary
In this CHRO Perspective episode Daniel Strode, head of culture at Banco Santander and author of The Culture Advantage, explains why culture is critical to innovation in a world of constant and accelerating change.
Daniel explores how organisations must shift from risk-avoidant, industrial-era mindsets to growth-oriented cultures that enable experimentation, learning and adaptation. He reflects on why companies can no longer rely on stability, how multiple technologies are reshaping the pace of change, and why innovation must now happen every day, not just in pockets of the business.
The conversation focuses on the role HR plays in shaping a cultural climate that supports innovation, including building effective feedback practices, psychological safety and leadership role modelling. Daniel shares practical ways HR teams can help create environments where people feel safe to speak up, learn from failure and continuously improve.
“The fact that companies used to live longer than humans and now companies live, well, just as long as a teenager would live, is quite a shocking statistic,” says Daniel Strode, head of culture for global bank Banco Santander and author of The Culture Advantage – Empowering your people to drive innovation.
And, he adds, this means if we are not changing we're probably not going to be in business. And that's why companies have to innovate every day.
One of the key factors that contributes to innovation is a growth mindset. This is the belief that intelligence and abilities can be developed through effort and practice. Employees with a growth mindset are more likely to take risks, experiment and try new things. They are also more likely to be resilient in the face of setbacks.
HR can play a key role in promoting a growth mindset within an organisation, says Strode. In this video interview he identifies ways that HR can help including:
- Provide feedback. Feedback is essential for helping employees develop their skills and abilities. HR can help to ensure that feedback is given in a constructive and supportive way. Feedback should be focused on the future and should offer suggestions for improvement.
- Create a culture of psychological safety. Psychological safety is the belief that employees can take risks and be themselves without fear of being punished or ridiculed. HR can help to create a culture of psychological safety by encouraging open communication and by providing employees with opportunities to learn and grow.
- Identify and reward role models. Employees learn by watching others. HR can help to promote a growth mindset by identifying and rewarding employees who demonstrate a growth mindset. >
About Daniel Strode
Daniel Strode is head of culture for Banco Santander – a 200,000 strong global bank – where he leads the global effort to implement a strong common culture across the whole workforce. For the past five years his culture work sees him cross 32 different countries globally, implementing “The Santander Way” and embedding the culture across a range of activities.
Dan is also an academic, teaching at universities and business schools around the world including Madrid’s IE Business School in Spain and Bologna Business School in Italy. His main topics of teaching focus on how to create cultures where innovation can thrive, how to lead in the digital era and how to give and receive world class feedback.
In 2023 he released The Culture Advantage – Empowering your people to drive innovation published by Kogan Page.
Listen to our podcast with Daniel to discover the eight principles related to culture that drive innovation and how to improve psychological safety in the Work’s Not Working… Let’s Fix It! Podcast https://www.worksnotworking.com/
Transcript
What culture really means in practice
I tend to think you cannot trick culture or gain culture for your advantage because you want to win. You have to do it because you're coming from the right position, the right place. You have your intentions in the right place.
So for me, culture is the way we do things around here when no one is looking, and I say the 'when no one is looking' is quite an important part. So that's how I see culture. And the interesting thing is I explored the word and it actually comes from the Latin word cultus which means to care. So also when I think about culture I think about caring for our people. And that might be our people in the company but it might also be our people as in shareholders we have, it might be the communities we operate in and it might be the customers that we serve as well. So caring about all of our stakeholders.
Why innovation now depends on cultural change
Why is culture and innovation important within companies? Well, you've probably seen the latest news about artificial intelligence coming to take all the jobs and so on and so forth.
Well, it's interesting to me because we're in this Fourth Industrial Revolution now where virtual reality, augmented reality, artificial intelligence, the internet of things, 5G, robotics – all these technologies are happening at the same time, which means the pace of change companies and consumers are experiencing is absolutely exponential.
And I think back to the steam engine – well I wasn't born at the time of course –but the steam engine, the internet, the first web 1.0 – all of those technologies changed our world. But they were one technology at a time. Because our world is now being changed by five or six major technologies at the same time that pace is so high.
The fact that companies used to live longer than humans and now companies live, well, just as long as a teenager would live, is quite a shocking statistic. And it means if we are not changing we're probably not going to be in business and that's why we have to innovate every day.
How mindset shapes organisational behaviour
When we've gone through school our mindset has always been to be correct and to be right. You know, every school around the world is absolutely focused upon examinations and in an exam you are either right or wrong. There's not normally any grey area in between.
And because of that mindset, and that mindset which has come from the Industrial Revolution initially, we've been building companies not to take risks. We've been building governance systems to protect us. We've been building bureaucracy to slow us down. All those kind of things to protect us against taking risks.
So for companies now to change that behaviour and mindset, because they need to and they need to innovate, is a cultural change that will take a number of years for most of them to do if they do it successfully, of course, which is easier said than done.
The role of feedback in enabling innovation
I think human resources teams have a very big role when it comes to feedback. You need two things in order to have good feedback. So the first thing you need is a clear and actionable structure. So you need to enable employees to give and receive feedback with a good structure. A structure that's good is typically evidence-based. It comes with good intent. So people are saying things for the right reasons. It's typically future focused, so I'm talking about how we can improve as individuals. And it doesn't necessarily have to be feedback focused on the negative aspect of things only. So we should encourage people to go from good to great as well. And typically I can see us sending messages in that regard and doing OK with our communications and change management efforts.
But the second element, which companies are typically falling foul of at the moment, is creating what I call a cultural climate. So a culture where you can give and receive feedback. And typically what this means is companies or HR functions need to do a few things. They need to enable multi-directional feedback, so feedback that isn't just top down or bottom up, but in all directions. This is very important because everybody should have an equal voice and an equal opportunity to improve things in the company, irrespective of level.
The second thing I think HR functions need to be focused on is, of course, doing digital transformation and having digital tools for feedback. And that might be a mobile app where you can give and receive feedback but also promoting that cultural climate where people can do face-to-face feedback. That's critical. Typically we think our job is done when we implement a mobile app but actually it's not done at all. And we need to foster that face-to-face aspect.
And the final element companies need to figure out is how do you give and receive feedback in a timely manner? And how do you also do that where it's fully embedded in the business. So it's not just happening in a small pocket, it's not just happening within your IT teams, it's happening everywhere.
And again, with culture, as you do these actions you have that kind of flywheel and things start to grow and start to improve but you need to attack all of these at the same time otherwise it's very hard to get that momentum.
So definitely focus on having a good, a clear and an actionable structure but also building a cultural climate as well, where you can give and receive feedback – again with a growth mindset without fear of failure or negative aspects being associated to it.
Why psychological safety matters for growth
The thing to do to really reinforce this is to create what I would say is a safe space for open and regular debate. And that might be your management team holding a town hall meeting where they do live Q&A or other variations of that topic. But definitely having a space where people can have open debate in real time and on a regular basis is important.
How leaders shape the cultural climate
And then the third thing I would do, and this is one that I find really interesting, is I would take five of your best leaders and I would study them and I would say, what common traits or attributes are they displaying? And maybe we need to take those, learn from them and replicate them across the organisation. Maybe they should be our leadership behaviours, because I'm a firm believer that success leaves clues and the more we can look to our role models and learn from them, the better we are going to be as a company.
About the author
