corporate culture | All About Performance

Company Culture During COVID

One of my favorite quotes from Peter Drucker is “Culture eats strategy for breakfast.” It speaks to the idea that we can come up with all of the great ideas we want to, but if there is not an alignment between the effort and the organization’s DNA, it is just not going to happen. Likewise, it also means that strong cultures can help guide companies through good and difficult times because resilience can be part of what a company is all about.

I came across this amazing example of organizational resilience. It’s a story of how French monks have continued to make their centuries-old liqueurs. While I don’t recommend an intellectual property governance plan where only 2 people know the ingredients of your product, their experience has lessons for all of us.

Not surprisingly, they have a strong culture. Besides being bound together by their faith, they have a very clear vision statement (Stat crux dum volvitur orbis [“The cross is steady while the world turns”]). This allows them to see well beyond existing issues in guiding their business.

The monks make the liqueurs to support other monks and nuns all over the globe, so maintaining production is important to continuing their way of life. So, what do to during the COVID crisis? They pivoted their distribution from bars to home retail. They showed solidarity and support for those who keep them in business by donating part of their proceeds to bartenders and providing alcohol to a local hospital to make sanitizer. With their view of how they fit into the world (“We have to learn to live with the virus.”), they allowed their culture to guide them through this difficult time, as they did for many others. See their website for how they have navigated other crises during their existence.

Building this kind of culture takes time, but there are concrete steps that senior management and HR can take, including:

Be clear about the culture you want. This can be done through brief mission or values statements.
Reference the culture when making important decisions. For instance, “We are giving some of proceeds to bartenders during COVID because they have supported us during other difficult times and will continue to do so in the future. We think about our business in terms of centuries, not months.”
Reward those behaviors that support the culture.
Teach the culture to new employees. The best way to do this is for individuals to share stories about how they have experienced the culture. Leaders should talk about how the culture has sustained the organization.

Culture emerges in organizations. The question is whether it is allowed to grow wild or if it is cultivated. When we are mindful of it, it can help guide decisions and lead to more productive enterprises. Or, as the CEO of the monks’ business says, “When you have roots this deep, it allows you to forget the short term and project your vision far in the future.”

Are we Biased AGAINST Top Talent?

We all want to believe that we are looking to recruit, select, and develop top talent. We spend lots of time reading and writing articles on the topic. But, what if hiring managers are not interested?

This article throws a bit of cold water on the topic. It documents a study where hiring managers were shown to doubt the organizational commitment of those deemed the most capable. It was almost as if they were saying, “Why would someone really good want to work for us?”

There are several issues at work here. But, what they boil down to is a bias among hiring mangers that negatively affects their selection processes. Sure, I can imagine anecdotal evidence (“Yeah, we hired that one really bright person, but she jumped ship as soon as she got a better offer.”), but I don’t think that this is a data driven decision.

What this also underlines is the importance of developing a culture that encourages top talent to stay. There’s no question that selecting the right people will drive business performance. And having a culture that acknowledges and rewards high performance will do so as well. When hiring managers feel that top talent will not stay, it is really an indictment of the culture rather than an accurate prediction of management’s view. How can you fight this?

If managers do not think top talent would be committed to your organization, they should NOT be involved in hiring.
Those who are doing the hiring should be able to provide a realistic preview of the organization, but should also be able to succinctly describe why people stay. And I’m not just talking about a good cafeteria. They should be able to provide examples of people who have found challenging work over time in the organization.
If you are speaking with hiring managers who show an anti-talent bias, ask them what needs to be changed so they would believe that top talent would want to stay.
The best way to fight bias is with data. You should be able to study turnover rates by talent bands (contact me for tips on this). This way you can either show people that top talent does not leave any faster than other employee groups or demonstrate to executives that this is a problem that needs to be addressed.

Organizations should strive for selection processes that identify top talent and cultures that nurture them. Do not let bias against hiring top talent work against these two initiatives.

Celebrating (Painful) Learning

In a previous post I talked about using the Marshmallow Challenge to provide insight into cultures that support risk taking. Taking the stigma out of making mistakes is one way to encourage creativity.

Taking this to the next level are FUN nights (note that curse words figure prominently into the article). This is where entrepreneurs are encouraged to share their failures with others. The thought is that the process makes people more relatable than if they only share your successes. The promoters feel this leads to better networking among the members.

Organizations could adopt this approach as well, but it would take a bit of a balancing act. Most companies want their executives to be approachable, but also want them seen as competent. Employees want to avoid being branded as “the person who had the bad experience.”

The key is to not just share stories of failure. Rather, talk about growth. When executives reveal experiences about what they learned from mistakes, others can see that risk taking, and the inevitable missteps that come with it, are part of the process of becoming successful.

From a selection perspective, there are traits you can look for in hiring potential leaders who are pre-disposed to this kind of learning. One is openness to experience. The other is self-confidence. Validating these types of measures will help you hire people who are willing to confront their mistakes and share their lessons with others.

Does Kindergarten Really Have a Culture of Success?

You may be familiar with the marshmallow challenge. It is an intriguing and engaging team building exercise that demonstrates the importance of failure in group interactions.

It is all fun and everyone gets a laugh regarding how, according to an accompanying Ted Talk I show, kindergartners do better at it than those who went to business school. By the way, I’d like to see that replicated because it makes a great story but I doubt that it is really true. But the most important lesson for leaders from it is not that failure eventually grows success. Rather, it is the call to action to create a culture where taking the risk should be rewarded and not only when the risk leads to immediate success.

What leaders should learn from the challenge is that it takes place in an environment that encourages risk taking. There is no one to say, “Let me tell you how we’ve done this before” or “If this doesn’t work out well we are in big trouble.” From this culture, most teams are able to accomplish something that at first seems unlikely in about 18 minutes. This should lead to a candid conversation about the barriers that exist to useful failure and what actions can be taken to change those aspects of the culture.

The nature of kindergarten is to reward process more than results. Incentives in business cannot be quite follow that model and lead to success. However, we can use learning to find the unnecessary hurdles creativity and problem solving.

Is Taking a Pulse Too Invasive?

Corporate culture is a tricky thing. It develops over time, but we want to change it quickly when it suits us. The business media is replete with examples of great (100 best places to work!) and toxic (see Uber, supposedly) places to work. If your job is to influence those cultures, where do you start?

I am very big on measurement in the workplace. Whether it is testing for job candidates, evaluating job performance, or surveying employee engagement. So, I was interested to read about startup software tools that provide for spot surveys and compliance measures. The appeal of these is clear. Real time data can lead to real time solutions. But, are these really ways to improve culture or just faster methods of applying band-aids?

Culture evolves whether you want it to or not. Companies that actively manage employee engagement can use it as a strategic and recruiting advantage. The constant use of software to measure culture strikes me as a reactive approach. It can lead companies to chase small problems (“Why has turnover ticked up in Pat’s area?”) instead of focusing on larger ones (“What are we doing to ensure that all of our best employees want to stay?”). Also by constantly measuring engagement we are affecting it, but probably not in the way we want to be (“Why are we constantly being asked for our opinion? Doesn’t management know what’s happening here?”).

I would suggest a thoughtful approach where you ask what you want your culture to be. You can take a baseline measure and then take steps to close any gaps (hint—be sure that senior executives are modeling and talking about the culture you are trying to achieve). Then see if closing any of those gaps affects measures of engagement (turnover, absenteeism, productivity, etc). Keep focusing on what has impact and put aside what doesn’t. Wash, rinse, repeat. This replaces a “whack-a-mole” approach with a more strategic one that does not require constant surveying.

Senior executives should have a “pulse” on the organization, but they should not have to be constantly asking “are we there yet?” like an 8 year old in the back of a car. If you approach employee engagement strategically, you can manage better and not be so invasive.

Accountability, Fear, and Changing a Culture

Uber finds itself in the news for lots of reasons, not all of them good. The most recent story concerns the firing of 20 employees for a variety of bad behaviors to show that they were being held accountable for their actions. I am not so concerned with whether this was a good move as much as if it will lead to change.

Certainly, the publicness of the firings meant that they were done as a message to Uber employees and the investment community. Sixty Search Website by an Woman It says, “Yes, we hear you about our culture and we are doing something about it.” What it doesn’t say is, “You have been rewarding our CEO who does the same things, but we are not so sure what to do about that.”

Firing a bunch of people does not improve a company’s culture, even if it was the right decision. Rather, it instills fear. And while it may convey a message of what will not be tolerated, the action does not reinforce any positive behaviors that senior management would like to see. It is almost like sentencing people to hang by the neck until they cheer up.

Uber has grown their business by the asking for forgiveness rather than permission. That type of a model, by definition, rewards people for bending the rules to the extreme. Their challenge is how to continue with a culture based on disrupting the status quo but respects the people who support it. That will require threading a pretty small needle.

Changing a culture requires time and consistency. Management needs to look at every aspect of its people processes (recruiting, hiring, onboarding, training, compensation, performance management, and succession planning) and ask, “Have we put in the right incentives and are we modeling the correct behaviors for a sustainable culture?” Cultures do not happen overnight and they do not change after a few heads roll.