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.