Our many years of experience in culture, leadership and business turnarounds have taught us a few things about how culture impacts performance, and the levers leaders can use to manage culture and improve performance.
We have a lot to say, (see our latest book: Culture Rules!) but these principles are our way of summing it all up.
1. Every organisation has a culture
Stop and reflect for a moment. Remember that first week in your current company? How everything was so different? It took a while to understand “how things are done around here.” Large or small, start-up or mature, commercial or government, every organization has a culture, either designed from the beginning or left to develop by default. Culture matters, big time.
2. Culture impacts performance Companies constantly launch improvement initiatives, complete with market research and milestones and budgets. But few of them make it through the "jaws of culture". A culture not aligned with the new strategy has an uncanny way of blocking progress. 3. Culture can be a significant risk Warren Buffett once said: "Risk comes from not knowing what you are doing." Too which we would add: "Risk comes from not knowing what your culture is doing." Most HR executives and consultants see culture as values and behaviors. We go deeper and see the hidden risks that can negatively impact business performance. 4. Culture works on human logic, not business logic Organizations are made up of strong social networks. Being accepted and following the rules set down by the leader means keeping your job and hopefully advancing. There is no single, uniform corporate culture. Instead all companies are made up of subcultures, each with an informal group leader who sets the ground-rules. When the subcultures are aligned with the overall business strategy, execution is easier. When subcultures are out of alignment, strategy execution is difficult. 5. Organisations are shadows of their leaders “Organizations are shadows of their leaders; that’s the good news, and the bad news!” You can write down all the culture words and values statements that you want. But employees pay a thousand times more attention to what you do as a leader, than what you say. It’s all the little things leaders do, that they might not even realize, that set the standards for the culture. 6. Culture will drift whatever you do The problem with most organizations as they grow and change is that nearly everything gets managed, often micro-managed, except the culture. Culture is often left to evolve on its own, and as a result, organizations experience cultural drift. As the culture shifts, employee behavior can easily get out of alignment with the organization’s strategic mission and objectives. 7. Policies determine culture The strongest culture causal factors are the internal systems and policies that drive employee behavior. The HR function has multiple culture levers at its disposal, yet few HR leaders assess the impact of policies and practices on culture. Strong culture drivers are contained in compensation systems, performance evaluations, on-boarding, promotion criteria, employee recognition schemes, recruiting and hiring profiles, medical and health policies, training and professional development. As Winston Churchill once said: "First we shape our institutions; thereafter they shape us." 8. You get the culture you ignore Every workday is filled with ‘coachable moments’ to help build and sustain a strong and aligned culture. Most are missed due to lack of leadership courage. When leaders fail to challenge negative attitudes and behavior in meetings, it’s a signal to all that such behavior is condoned. When co-workers fail to challenge each other concerning poor attitudes or behavior, the negativity is seen as normal, tends to spread and in many cases escalates into lack of trust and reduced employee engagement. Seth Godin put it nicely: "Leaders get the culture they deserve." 9. There is no perfect culture Two more quotes: "Your culture is your brand!" That was Tony Hsieh, CEO of Zappos, who grew from a start-up to $1 billion in revenue in just 10 years based on a culture of customer service. And here's Vince Lombardi: "Perfection is not attainable, but if we chase perfection we can catch excellence." 10. Teams change culture, not consultants There are the individuals, from all levels (hourly to executive) that are trusted and respected by their peers and others in the company. People listen when they speak. People follow and imitate their behaviors, attitudes and points of view about work, management, customer service and culture. They are the ‘informal leaders’ with great power to sway opinion and behavior. They are your culture change agents. All successful culture change approaches have two things in common: courageous leadership, and employees taking accountability for the culture. For more information or to request a demo on how mapping culture drivers can improve business results, contact us here. To purchase a copy: Culture Rules