Culture is the final ingredient in attaining your big company goal that many leaders forget to consider. Often, culture is considered “soft” and not a “hard” thing in business like sales figures.
Paradoxically, a great culture will allow you to execute efficiently and consistently attain those hard results. How you design and maintain your culture (and treat the people you hire) impacts customer satisfaction, productivity, employee engagement, retention, profitability and ultimately the product you develop. Numbers don’t run a business – people do.
When you ask high performance companies what makes them successful, none of them talk about their products or operations. They talk about their culture and how proud they are to be a part of it. This is one of the reasons they outperform – most products are easy to copy. But what really makes a product successful is the culture around it – the ecosystem. It’s much harder to copy, making culture, your ultimate competitive advantage.
After all, culture is really about the right organisational environment that you create (and maintain) to empower your staff to undertake the right actions and decisions to accurately implement the strategy. But it’s not just about supporting the right behaviours (and removing toxic ones).
Nurturing the right culture breeds positive energy and success and it’s crucial to not just in achieving your current goal, but to anything you and your team want to accomplish moving forward.
Unfortunately, most business leaders and employees are fuzzy on what a great culture actually means. It’s not surprising given that culture is such a nebulous word and means different things to different people. The result is that it makes it hard for employees within the business to clearly see what they are a part of. It’s almost like there’s a sheer cobweb or veil blocking a clear perspective of how the organisation operates.
The outcome is a gap between the culture that senior leaders espouse versus what employees experience. The bigger the gap the increased likelihood of cynicism, corroding trust levels and undermining respect for the company ethos (and leaders).
Part of the problem is that myths abound as to what culture is truly about. Let’s take a look at the top five corporate culture myths.
1. It’s About Free Stuff
Ask most CEOs how they manage their culture and they will tell you “We have a great culture. We’ve got a foos ball table, free yoga classes and drinks on Friday. Our staff love our culture.”
Culture can’t be bought. Google is famous for their culture and their non-stop buffet. While outsiders might foolishly believe that it’s all about free food, there is actually a much deeper, strategic reason. Food helps build relationships. Google even measures the length of cafeteria lines to make sure people wait an optimal 3-4 minutes to talk to others in the queue. Not only that, the tables are placed close to one another, so that employees accidentally bump each other. It’s even known as “The Google Bump” and it ensures that people develop a strong friendship network across the company leading to a cross-pollination of ideas and information between departments. Strong friendships almost guarantee people enjoy their jobs, get the latest information to do their work and stay at the company longer. Google strategically provides free food because they realised its the best way to foster workplace friendships and create a happy, innovative productive workplace.
Having social events doesn’t make your culture great. Your culture is great when you have people who want to hang out together, not because of free food and drinks.
15Five surveyed over 1,000 full-time employees and found that 81% would rather join a company that values “open communication” than one with perks such as free food, gym memberships, or a top health benefits plan.
Free stuff is just one part of your strategy to create a great culture. But it’s not enough on its own nor should it be a substitute for actually really working out what your employees need for their personal development and to stay at their job. It also needs to be measured, so as to work out the return on investment to the company.
2. It’s easy to Create Culture
Culture happens organically. When you get a group of people together, a culture develops whether you want it to or not. It behooves an organisation to create a culture everyone loves.
But a great culture doesn’t magically happen on its own. It must be designed deliberately and it takes a lot of work to build and maintain. It’s the job of every single person in the organisation to create a positive culture and make it important. While it’s the leader’s job to make sure everyone understands and believes in it. This means weeding out poor behaviours and habits.
Even if you create a high functioning culture, it can be killed off quickly through neglect or just one bad hire. Just one toxic person, can quickly infiltrate all your hard work, making employees wonder what sort of people are allowed to work at your organisation. Even when you fire poisonous people, it can take months to clean up their dirty work.
Yet, it’s not just bad hires that cause a culture to degrade. It’s also success.
Take a look at Dimmi an online restaurant booking service. Founded in 2009 it quickly grew to 30 people after it received some funding. Pretty soon, employees became complacent. While Dimmi might have been the first application of its kind, pretty soon competitors appeared and chipped away at market share. In a BRW interview, the CEO and founder, Stephen Premutico confessed “We’d become complacent and lazy and forgotten the things that made us great. Two of those things had been “speed and feet on the street.”
In early 2014, he overhauled the culture, so it was more like it was in the beginning. Senior managers were replaced and management returned to “leading from the front” again, with the founder reinstating his policy of spending at least a day a week visiting restaurant partners.
Within a year, Dimmi increased its market share to 30%. Recently, it was sold to Tripadvisor for $25 million which Premutico admits would’t have been possible, if he hadn’t fixed the culture.
3. Just by saying you have a Great Culture means it is
You’ll often hear CEOs and directors talk about their culture and say how wonderful it is. Yet, when you scratch under the surface, they’re unable to define in concrete terms what makes it so awesome. Recently, I was talking to a managing director from a large consultancy firm who was boasting about their great culture claiming “we give people time off when they’re working really hard.” While that’s important, it’s just one aspect of what makes a great culture. Further in the conversation, he confided that at performance review time, there were always a flood of resignations.
Unfortunately, most companies aren’t clear about their culture. Sure, they might do an employee satisfaction survey each quarter that shows people seem happy. Unfortunately, surveys often hide important information. As Aaron Levenstein says, “Statistics are like a bikini. What they reveal is interesting, but what they hide is vital.” A quantitative survey on its own is not enough. Business leaders need to read all the comments and do follow up interviews with those that make negative comments.
“Fish don’t know they’re swimming in water.” Likewise, few companies can define their culture, even those who do employee engagement surveys. Culture is the essence of a company. It’s an ephemeral quality that is hard to articulate by those working in it. After all, if you were to define your family dynamics, you’d also have trouble. Yet, those outside it can see it much clearer.
It’s really important for companies to think about their culture and what they want it to be – in terms of behaviours that are needed to match market reality, their values and customer servicing requirements and how they want to be in the future.
This is so important because the process of “claiming and naming it”, makes it much easier to be able to communicate it clearly as you grow and scale. It means you improve your hiring rate, as you have more clarity around who you need. As Dharmesh Shah, the cofounder of Hubspot says “the more you can articulate about your culture in terms of the operating, so how stuff works at your company, the fewer and righter decisions will be made.”
It also means that if you’re really clear about what your culture is then you can promote it to potential employees, so that they can self-select and know that they are the right fit for what you need. Rather, than just promote yourself generically to the talent market and receive a ton of misfitting applicants.
4. Never let your Culture Change
As your reality changes, your culture can and should change. Over time, what worked previously in your culture can actually backfire as the world changes.
Take GM for instance. When an email was circulated by a GM lawyer that a victim died in a GM Cobalt vehicle because of a faulty ignition switch, nothing happened. Despite, internal engineers trying to solve the problem for ten years. No report was given to senior executives, no recall was launched and not even the general counsel was alerted. Instead, a report was commissioned that took six months to be written. And when that, unsurprisingly, pointed the issue to the ignition switch, the chief engineer responsible for the investigation deliberated over the result. Finally, a public recall was undertaken a full nine months after the initial discovery that GM was responsible. The result was 13 people lost their lives.
So why did employees ignore the crucial information potentially saving customers from dying from faulty airbags that didn’t deploy? It was due to culture. A culture of indecision where people work hard to not bring bad news to higher-ups. At GM, no one is held accountable for a decision. For decades, GM employees have never been held responsible for the success or failure of a project. People never got fired for poor performance. What started as a genuine attempt to protect employees from losing their jobs has turned into a highly dysfunctional and rigid culture where no one debates, decisions are made in private and vital information is hidden. Now, Mary Barra the new CEO, is charged with the enormously difficult task of transforming the culture – a culture where failing to change the culture has famously become part of the culture.
But it’s not just dysfunctional cultures that need to change. Often naively, companies want to preserve their “start up” culture, but this can actually hold them back.
Consider MYOB, an accounting software company. The CEO, Tim Reed, recently told BOSS magazine, that he overhauled the company culture because it was still stuck with the original start up culture:
“Essentially, people worked in a culture where they believed someone else was responsible. They believed two or three execs at the top were the only decision makers. The deep-seated belief was an overhang of the entrepreneurial days, when three people did make every decision. We now have a culture of test and learn.”
And that brings me to the next point. What sort of culture does you company need to nurture to move forward in the right direction? Every company is different and some might need more of a firm nudge. But a strong, visionary CEO needs to take a stand and assess the current culture and see how it can be fine-tuned to move in the right direction. While a board needs to sign off on the culture and embody it.
5. Forget the Words and Symbols
Culture is based on a common language and symbols. How business leaders and employees talk within the company, creates a shared language. Change how people speak in your organisation and you change behaviours and your culture.
What is your shared way of speaking? Do you say “I” a lot in your talks or do you use the more collaborative “we?” Do you tell people that they “should” do that thing or do you “offer” a solution?
Likewise, aligning the physical working environment to the culture, through symbols, inspires better business results.
When the Pampers nappy brand was struggling, one of the things that Proctor & Gamble did to improve the brand was to make its symbols and office environment about babies and mothers. Procedures even changed to become more friendly to working mums such as maternity parking spaces. Mums and babies were brought in to interact with staff. The brand ideal was operationalised through focusing everyone in the business on delighting mums.
Most companies don’t fully realise the impact that business leaders convey with their words and actions and how that works towards creating a culture over time. It’s a myth to believe you can say how great your culture is to your workforce once or twice a year and not back that up with sustainable, long term communication that backs up that you mean what you say.
It’s important to strengthen your culture through symbolic activities such as staff events, celebrations, rewards, communications and the physical environment so that it matches the culture that you’re trying to design.
Essentially, your culture works towards helping you attract the right people who are empowered to make the right decisions and behaviours to make your customers happy.
Yet, these corporate culture myths make it much more likely for large cultural perception gaps between what leaders perceive the culture to be and the reality of what employees (and customers) experience. When you live in the land of delusions, it means a reduced ability for the organisation to deal with market changes, changing consumers preferences, disengaged employees and a poorly thought out strategy.
All together, companies get confused about culture when they believe they can offer employees ‘free stuff’ without strategising how that ties into their cultural framework. Without doing the hard work on actually quantifying and specifying your culture, it’s difficult to foster the right behaviours to execute strategy, if you’re unclear on those behaviours. And it makes it hard to write and talk about it and generate important shared languages that unites the workforce.
Organisational culture is an ongoing process – a bit like raising children. Make it easier on your firm and identify it, define it, so that you can deliver it, in the best way possible.