Enough talk, let’s build a culture that eats strategy for lunch…
We all seem to intellectually understand the importance of a healthy organizational culture, but few businesses have a plan to intentionally define and institutionalize a culture that yields a sustainable competitive advantage.
Let’s start with the basics, a definition. Culture is a commonly held set of values and core principles that show up in the daily words and actions of the people; “the [insert company name] way”. I have a plaque hanging over my desk that says thoughts lead to words, words lead to action, actions become habits, habits shape your character, and your character defines your destiny. The culture of your company will define your destiny and your legacy. So, as we start our journey, we will focus on words and actions.
Before we talk about how, let’s discuss Why. Why does Culture matter, doesn’t the CEO have other important things to do? Four things to consider. (1) A healthy culture will yield a sustained differentiation in a sea of mediocrity. (2) A healthy culture will increase the ability to attract and retain the right people in an extremely competitive labor market. (3)Employees who are positive about their company will deliver better client experiences. (4) Companies with great people and strong cultures earn higher multiples or valuations.
Now on to how, and this is where we struggle. This cannot be a human resource initiative and it cannot be achieved with casual Fridays, more pizza parties, and gimmicks. Defining and institutionalizing a culture is a Sr. Leadership function. Let’s look at four specific actions:
(1) DEFINE. Too often, we create a few core values that are vague and meaningless. What we want to do in this phase is to identify 20-30 behavioral statements that define with specificity what you expect people to do. Do this by reflecting on questions like (a) What things if done, would create an amazing company (b)Which employees would you clone, why? (c)What behaviors make you crazy (opposite). Once you’ve created observable behavior statements, you can figure out a scheme to categorize them. Often, categorizing into core values can be effective, but avoid values that are aspirational (vs real) or generic table stakes (like integrity, honesty).
(2) TEACH. Everyone will read and interpret the statements in their own way. It’s very important to explain each statement in weekly increments. What does it mean, why is it important, how do we demonstrate. Create a weekly focus, incorporate into weekly meetings, talk about in weekly 1:1 meetings. Many things can be done, but the bottom line is to create consistent rituals. This is ongoing, year after year, but each year, the effort goes one layer deeper in the organization.
(3) MEASURE. What gets measured gets done. The best two ways to measure progress are (1) Build an organizational survey around the behavioral statements. Be prepared to receive the feedback humbly and expect leaders to be committed to being responsive. (2) Incorporate the behavioral statements into performance review systems and/or 360 assessments. Employees that cannot consistently meet expectations on at least 75% of behavioral standards must be addressed.
(4) EMBED. The final step phase is to embed all your behavioral differentiators into everything that you do. Build selection systems to hire people that “fit”. Build reward and recognition systems to reinforce. Build them into new employee onboarding processes.
Every company has a culture. Is yours by chance or by design? Don’t let a key driver of value in your company evolve by chance.
For questions or more information pertaining to this article, please contact Scott Smith at email@example.com or firstname.lastname@example.org.