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Why your workplace culture is everything

by Andrew Cunningham on 15 Feb 2017

workplace_culture

Workplace culture is not foosball, table tennis, or pizza on Friday. Culture is who you are as a company and how it really operates and what it really cares about. The company may have a purpose but it is the culture that makes it happen. If you are a Simon Sinek fan and believe in the "Why? How? What?" steps, then culture is the key component of the "How?" you are going to do things.

In a globalised economy with free movement of capital and online services, and an increasingly mobile talent pool, culture becomes an even more important differentiator and medium to long term strategic advantage. Would you be happier and more productive in a start up using old doors as desks, or would you like a big salary wearing a suit, loathing your colleagues and devoid of purpose? It doesn't have to be an either/ or but it does illustrate the trade offs many make to work in an environment they enjoy.

Active management of culture is particularly important in fast growth companies. If you are doubling the headcount each year, you are bringing in a lot of new ways of how things get done, how to communicate, how people are treated and how decisions are made. Without active management a culture will grow organically and so often becomes different by team or group, which reduces cooperation, communication and staying focused on the company's purpose. The culture may also grow in ways which aren't compatible with what you want and leaves you asking questions as to why things aren't getting done correctly, quickly, or efficiently. It is better to start too early on building a culture as changing one is so much more difficult than setting one up.

So what is culture?

Culture is the mass of unwritten rules on how people treat each other, how they treat customers/ suppliers, how work gets done, and for CEOs it is what happens when they are not in the room - e.g.: it is the unspoken set of rules which are used for the basis of decision making.

You know it when you see a company with good culture, but it is often difficult to define it in a way that is transferable to the next company. You can copy the policies, buy foosball tables, provide benefits employees can brag about, but this won't automatically give you the same culture. So what are category definitions of culture that do translate across companies and countries?[1]

  • Achievement (about targets, bottom line, stock price, etc.)
  • Customer centric
  • One-team
  • Innovation
  • People first
  • Greater good

The categories are not mutually exclusive, but do need to be prioritised and defined for your company.  Companies such as Nordstrom and Four Seasons are famous for their customer experience as they have defined what it is and the autonomy individuals have to maintain it, even at the expense of achievement goals. Microsoft is being changed from an achievement first company under Steve Ballmer to an innovation first company under Satya Nadella.   

How does culture work?

Culture is one of the most difficult things to manage as it is a network of interactions between different people. We are all human and behave differently under different conditions and at different times. It is also difficult to easily measure culture quantitatively, so it is difficult to know if you are making positive progress on a week-by-week basis. The best way of managing culture is to write down the behaviours and outputs you want from the culture, and then measure the change in behaviours and outputs over time.

workplace_cultureThe standard behaviour model is: your experiences form your values, your values drive your behaviours, and your behaviours determine what your outputs are (see diagram ). The key is culture, as it creates the context for the experiences. For example:

  1. If you are struggling with a piece of work… is your manager aggressive, gives you the answer and tells you it is all about making the quarterly numbers? Or does your manager use Socratic questioning so you learn, see all options and make trade offs which will provide a balance between short and longer term goals? These two examples will lead to different outputs in the short term and set the pattern for how future decisions are made.
  2. Is the culture about getting the biggest bonus? Giving customers the best experience? Patience with failure on the innovation road? Different cultural contexts will give people different experiences from the same event. 

So how do you create the culture you want? 

The key is "repeatedly observed consistent behaviour" of the people at the top of an organisation. If the CEO is flying around in a private jet, and everyone knows it, employees will be less inclined to be careful with their expenses. If the CEO of a smaller organisation is disorganised and everything is by the seat of their pants, it is much less likely the rest of the team is going to be executing with efficiency and consistency.  

All decisions need to be made through the prism of the culture you want. You can talk about being an innovation company, but everyone in the company can work out quickly if your decision making is focused on innovation or financial achievement. Think of every decision as an opportunity to put it through the "what if we were truly customer centric… what would the answer look like?"

Steps to creating the culture you want… 

  1. Start by focusing on one culture category, defining what it means in your company's context, and don't move to the next category until the first one is imbedded into the organisation. Trying to change multiple categories at the same time leads to failure.
  2. Define the behaviours and outputs you want to see from the culture so you can measure progress.
  3. Manage the (unspoken) messages in priority order:
    1. Behaviour: what does the senior team do (what they say is close to irrelevant and falls into the BS bin in most employees brains)? What do people see/ experience from the senior team? Are people treated with respect/ belittled, does the senior team help each other or fight, are they punished for failure, are women and minorities treated equally? Remember, the more senior you are in the management team the higher the amplification on your megaphone to those below you. At the CEO level even your smallest behaviour gets analysed, assumptions drawn, and company behaviours created. Define what behaviour you want and write it down.
    2. Processes: planning, performance review, organisation, purchasing, sales, etc. Do your processes reflect and support the ambitions of the culture you want? There is not much point in wanting an innovative culture when there is a heavy top down performance system and bureaucratic purchasing process. Define what the experience should be for the user of the process and write it down.
    3. Visible symbols: what do your offices look like, how do people dress, what benefits do people get, how are people's time and budgets allocated, who gets promoted/ exited, who sits where, what sort of company party do you throw? At the low end of imporance, but still a useful signal, is the foosball or table tennis table. Define how you want everything to look and feel and write it down. 

Finally, it is critical to display repeatedly observed consistent behaviour. As a manager or CEO the self discipline to live the behaviors to support the archetypes is tough, but is critical, as one misstep after a thousand good ones damages the belief in the culture and negative behaviors start seeping in. If you cannot live them, others won't follow them. 

[1] From the excellent book on culture and change, Walking the Talk by Carolyn Taylor.

An original version of this post first appeared on LinkedIn

Creating adaptable businesses

Topics: Leadership, Change

Andrew Cunningham

Written by Andrew Cunningham