There are a lot of cliches out there about organizational culture:
—Culture eats strategy for breakfast
—People leave the culture, not the company
—Your culture is your most valuable competitive asset
And in 20 years of working with organizations as both an internal and external consultant, here’s what I’ve learned: those cliches are all true. They may overstate the case a bit (they are cliches, after all), but I have seen these points play out in real life time and time again. A company has very clear intentions and plans about how they will compete, or how they will attract and retain the best talent, yet their culture ends up incompatible with these plans in important ways, and in most cases it’s the culture that wins and the plans (and results) that lose.
What’s doubly frustrating is that before you hit this rough patch, your culture seemed to be cooking along just fine. You WERE attracting the best talent and you WERE beating the competitors. You had created the proverbial “cool” place to work. So what went wrong?
Well, nothing really. It’s just that the factors that drive success for your company changed, while your culture didn’t. Remember: culture isn’t about being cool. It’s not about foosball tables, happy hours, or posters on the wall. Culture is about what is deeply valued in the system, and (here’s the important part) making sure what is valued is connected to what drives success for the enterprise.
Navigating the Whitewater
And you’d be foolish to think that what drives the success of your company is going to stay the same forever. Just look at ordinary growth stages in a company. Early on there is typically a period where sales is king. This is the period that Les McKeown (author of Predictable Success) calls the “fun” stage, where the product is finally out there and selling. But eventually you’ll hit what McKeown calls “whitewater.” Your operations are big enough that they really need the efficiency of more consistent policies and procedures. The free-wheeling approach of the sales-focused “fun” stage is actually starting to hold you back. Things start falling through the cracks. People get frustrated. Results start to falter.
So you need to shift. There’s a new set of behaviors and processes that are now critical to the success of your business, and you need to bake them in to the way you do things. Notice that you’re not shifting your culture because Google, Zappos, or any of the other cool kids are doing it. And you’re not abandoning (completely) your earlier culture–you need some consistency for your employees and your customers to really understand you. But you’re shifting because succeeding in this new environment demands it.
And growth transitions are only one source of whitewater. It might be a shift in the market, or even turnover of key employees that can create friction that reduces productivity. When you hit these bumps in the road, resist the temptation to write them off as poor execution or the “wrong people on the bus.” Take a look at the bigger picture and get clear on how your current culture (what is deeply valued and how that translates into behavior) is contributing to–or hindering–your success.
Clarity is the Key
And remember, you can’t pick your values just because they sound good. You have to drill down very specifically into what drives success. Zappos, for instance, became one of those cool kids by figuring out that for their business, incredible customer service (specifically responsiveness) was the single most important driver of success. Every single employee at Zappos, as part of their orientation program, goes through the two-week customer service training that their phone operators go through, and they must also spend two weeks actually answering customer phone calls. Yes! Even the corporate attorneys spend two weeks answering phones.
I once told this story during a webinar I was giving on culture, and I joked that I hoped I didn’t get the lawyer when I was ordering shoes from Zappos. It turns out a Zappos employee was listening in on the webinar, and in the Q&A portion she assured me that even their lawyers are good at answering the phones. That’s the point. They only hire lawyers who also happen to be good with customer service, because they know how important that is to the success of the enterprise.
Netflix is another company that is disciplined about its cultural clarity. Their slide deck on culture has been widely shared on the internet. In it, they share nine values, which, to be honest, sound a little generic and high level at first glance: judgment, communication, impact, curiosity, innovation, courage, passion, honesty, and selflessness. Seriously, who could disagree with any of those? But they have clearly worked to understand how this impacts their operations, because they translate each one into more detailed, behavioral descriptions for holding people accountable. For “selflessness,” for example, they identify the following behaviors:
—You seek what is best for Netflix, rather than best for yourself or your group.
—You are ego-less when searching for the best ideas
—You take time to help colleaguesYou share information openly and proactively.
That’s pretty clear. And they make no bones about the fact that they will fire you if you behave in ways inconsistent with the culture.
Change Culture One Process at a Time
Of course once you’re clear, you then face the challenge of actually changing your culture, and frequently this is where people give up. It’s too hard. I don’t know where to start. I tried some changes and they didn’t stick. I don’t have the time or money for a three-year culture transformation project.
Sorry, but I’m not buying these excuses any more. The trick here is to start doing culture change, without actually calling it culture change. Pick a process that you know needs work–one that might help deal with the whitewater that has emerged–and change it so you can get visible results within about 90 days. Of course, your change will have to reflect the thinking you’ve done about what should be valued to drive success, and it doesn’t hurt to talk about that to your employees as well, but the focus should be the process. I have seen organizations shift their culture one process at a time.
I worked with a small nonprofit in Australia who started with their performance review process (note: if you’re going to pick a process, it’s not a bad idea to choose one that people already hate!). They added to their semi-annual review process an explicit evaluation of how every employee was living the 12 cultural values that they had recently developed. This actually helped them to start solving other problems, according to the General Manager:
Once we identified this set of concrete behaviors that really defined what our culture is, the conversations internally about how to make things better started happening more quickly and were much more focused.
What Got You Here Won’t Get You There
Companies grow and develop, just like people do. When you look back at who you were five or ten years ago, you probably see a different person. You’ve grown and changed. You’ve learned new things along the way, and your personal and professional context requires a different approach now. Companies are the same way, and as a leader, you need to be proactive about sensing the whitewater as it emerges, clarifying the new drivers of success for your enterprise, and then making change happen one process at a time. Figure this out, and maybe I’ll soon be writing about your company as one of the “cool kids.”