Ensuring your Culture is a Driver rather than a Derivative

“Culture is our source of momentum,” a CEO told me.  “With markets changing so rapidly, culture is the driving force, keeping us from becoming stagnant.”

            A vibrant culture can power an organization through the most trying times. As the diagram shows, culture is the flywheel, a continuous dynamic keeping all the gears going in the right direction.

            However, if culture is left unstated or remains implicit, employees look elsewhere for clues on what to prioritize and how to behave when facing difficult challenges.

In a WSJ OpEd piece, former IBM CEO Lou Gerstner questions whether company culture is too often reduced to a derivative of other processes.  In his example, a CEO’s state-of-the-union proclaims their commitment to investments in future growth and R&D.  Six weeks into the quarter, the CFO sends a memo about Q1 results falling behind budget and discretionary spending is put on hold.  “Now which of those communications,” asks Gerstner, “do you believe shapes the employees view of what really matters and therefore what they see as the true cultural priorities of the company?”

Consider what happened at Wells Fargo.  A company founded on trust was hauled in front of Congress because an overemphasis on financial performance and compensation plans cranked the gears of the organization in the wrong direction.  The culture got so poisoned, even those calling out the unethical practices were shouted down.  Their CEO got axed.

I know I’ve succumbed to the tyranny of short-term results, allowing cultural initiatives to be trumped.  What about you?  How do we prevent team members from looking to comp plans or the budget process for behavioral cues rather than core values and cultural norms? 

In a study featured in the Harvard Business Review, researchers stated,  “What we learned about companies that have strong leadership pipelines and strong financial performance: first, they focus on culture.  They talk about it, they live by it.  People in the company know what [culture] stands for and this gives them freedom to lead in different but complimentary ways.” 

I love that notion – the best companies talk about culture.  At my firms, we talked of culture, but not about culture.  We said our culture was great, but we never said what our culture was.

Company culture is most potent when everyone understands the foundations and principles.  With no ambiguity about the Expectations for employees, they are more likely to deliver.  If Interactions and Operating Norms are clearly stated, then staffers aren’t looking to the wrong sources for how to act. 

Codifying your company culture is a great place to start.  In companies I work with, we’re bringing together leaders and team members in discussion groups to define the Expectations, Interactions and Operating Norms.

Priority Management is one area in need of clarity.  Employees often lament about too much work and too little time.  And with market forces shifting company strategies or tactics, priorities must be readjusted down the chain.  Without explicit company approaches to prioritization, staffers have to guess at tradeoffs between tasks generating revenue or fulfilling client requests.  They use their own methods to choose between important long-term projects and urgent requests.  Determining when to say “No” or which items are delegated and which are put on the back burner is a confusing quandary.

This Important vs. Urgent chart is one model for helping staffers decide between seemingly conflicting priorities.  Adopting these fundamentals for allocating individuals’ time can minimize misalignment and inefficiency.

Discussions about Priority Management or other elements of company Expectations, Interactions and Operating Norms can spark conversation and debate.  There are no easy answers.  However, the dialog is engaging, and important!

Culture can be a steadying force as your business scales.  To leverage this asset, put aside the time with your team to codify the foundations of your culture then document the results.  This clarity can make culture a momentum builder for your organization.

Unlocking the Power of Company Culture

Our culture is awesome!  Culture defines us.  Our culture separates our company from the pack and attracts the best talent.

I’ve heard some form of these declarations from most Founders and CEOs.  Having a killer culture is popular nowadays. Leaders can be as proud of their culture as the company they’ve built.  And, rightfully so.

 Zappos’ CEO Tony Hseih said, “If you get the culture right, most other stuff will take care of itself.”  Start-up founder David Cummings called culture an entrepreneur’s only sustainable competitive advantage.  “I used to believe that culture was ‘soft,’ and had little bearing on our bottom line,” said Tech CEO and author of Wired Differently, Vern Dorsch.  “What I believe today is that our culture has everything to do with our bottom line.”

While What we Do objectives and strategies provide direction, a robust culture keeps the firm on course, holding everyone together when market forces and competitors try to tear the company apart.  Culture is the flywheel, the most dynamic force of How we Operate and the key to thriving as the enterprise scales.

Yet when I ask staffers to describe their ‘killer’ culture, they give me puzzled looks.  After pausing to consider the question, they often cite their cool workspace, casual dress code, work from home flexibility or the fun team events.  Pets roaming the office are frequently pointed out.

How can company culture drive an organization when the basics are unclear to those who are part of it?  Why is there such a disconnect between the potency of culture described by leaders and the superficial facets commonly identified by employees?

In my view, culture is an under leveraged asset, its impact nullified by lack of clarity or inattentiveness.  

In most companies, Purpose, Mission and Values have been carefully considered.  You can find the terms and phrases plastered on walls, t-shirts and other company swag. 

On the other hand, company culture is vague and amorphous, a mystical catchall phrase that means different things to different people.  Culture is implicit.  Company norms, customs or idioms are unstated.  Nothing is written down.  Beyond being respectful and kind to one another, explanations on how to act or behave are not defined.  New employees, and veterans for that matter, are left guessing about unspoken standards and expectations.  When it comes to culture, everyone is supposed to “get it” even though nobody seems to know what “it” is.

So what is culture, exactly?

“Culture is a set of shared beliefs, values and practices” is one start-up’s description.  Others define culture as “a way of thinking, behaving and working.”  A broader view stated, “The visible artifacts of culture have to do with stories, ceremonies, symbols, events, the way people dress, and layout of an office. But the roots of culture have to do with beliefs and assumptions that underlie how work is done in the venture.” 

These definitions sound great on paper but are difficult for employees to apply.  What are the company’s specific shared beliefs on decision-making, prioritization or meeting protocol?  Which practices truly guide collaboration or conflict resolution?  Ceremonies and symbols are interesting, but what exactly are the assumptions underlying accountability, initiative or the commitment expected from members of the team?  

To harness the power of culture, everyone at the firm needs to understand the inner mechanics.  Based on my experience, three primary cogs driving company culture: Interactions, Expectations and Operating Norms.

Your company may be committed to authenticity, building a safe environment for team members to be transparent and vulnerable with one another.  Some businesses focus on collaboration emphasizing equal conversation from all while addressing conflict directly in a healthy and constructive manner.  In some firms, the level of ownership and initiative expected from leaders, teams and individual contributors is most important.  The style of leadership, format for meetings (stand-up, sit down) or cadence and means of communication will vary from company to company. 

How your company defines these cultural cogs is up to your management and team members.  There are no right or wrong answers for the Interactions, Expectations and Operating Norms.  The key to bringing your culture to life is to communicate, communicate, communicate!  Make sure everyone is clear.  Don’t leave interpretation to chance.  Be explicit and unequivocal.

Peter Drucker is credited with saying “Culture eats strategy for breakfast.”   Undoubtedly, company culture and other aspects of How we Operate are as impactful as the strategic aspects of What we Do.  Stating your culture plainly can enable your firm to prosper and thus, eat your competition for lunch!