The vast majority of organisations think of culture like it’s an HR function that’s a peer to other parts of the business like product, finance, sales, marketing and so on. Because of this mindset, most organisations run culture “projects” which vary in size and timescale, ranging from culture surveys to team building days. And yet the stats are very clear, employee engagement at major corporations and large organisations is largely unchanged over the decades.
Start up envy
Conversely, start-ups and high growth companies across the globe have an employee experience that larger organisations pine for. In fact, the cultures there can be so energising and desirable that people will accept significant pay cuts just to take part in something they find fulfilling.
Sure, established organisations try to keep up – they’ll spend millions of dollars on ping pong tables and new kitchen fit-outs – but they still can’t provide a match to the feeling of a small team working out of a garage with no capital.
So what’s going so wrong here? Why doesn’t copying the model work? The issue is actually a simple one, but it’s by no means an easy one to solve. By running culture “projects” these companies are painting racing stripes on the family van. You can paint as many flames on the side as you like, it won’t make it a racing car.
The core problem comes down to this – culture isn’t a separate function of the business, it IS the business. Start ups don’t need all of that money spent on culture projects, because their culture is the result of who they are. At best an external “let’s fix our culture” project is just ineffective, but when that project is also at odds with the goals and strategy of the business, it becomes a point of great irritation for team members who are asked to exhibit polar opposite behaviours in their role vs what’s written on the culture posters that HR pins on the wall.
Let’s look at some hypothetical examples.
Sally works in sales. HR has just rolled out their new “Better everyday, better together” campaign, promoting a culture of learning and teamwork (both internally and with customers) across the organisation. The posters are on the wall, the rollout session has been conducted in the team to introduce the new concepts. Job done!
But of course, not really. Sally has a set of KPIs that are revenue focused, and the organisation has a strong push for growth this year. It’s made very clear each and every week in the sales meeting that deals are the absolute priority, whatever it takes. Sally’s manager has her manager breathing done her neck, and the sales team is under so much pressure to close deals that some of them are getting “creative” with finding opportunities, targeting customers who are likely to be a bad fit for the product, but will generate revenue in the short term.
Remember this one thing
If you understand one thing about culture, make it this – when cultural aspirations and business targets are at odds, cultural aspirations will always lose. Sally is very likely to pursue deals that are at odds with the “better together” philosophy, and she’ll certainly be likely to cut corners and not bother with her learning goals for the “better everyday” campaign. That’s because that effort does not help her reach her goals within the organisation, which is to reach revenue performance which lets her keep her job.
In cases where strategy and culture are at odds, you will still likely have a strong culture, it just won’t be the one you want. There are many countless examples of this. The root cause of the global financial crisis stemmed from the banking sector's strong culture of growth at all cost. Professional cycling in the 90s was fuelled by a culture to achieve peak performance at all cost. In each and every one of these examples you’ll actually find that everyone was very aligned to their goals – it would almost have been admirable if the goals themselves weren’t so toxic.
A better way
Now let’s look at how this could be done differently. The company starts by identifying their culture, and this effort is led by senior leadership with their full buy in. The company’s hiring strategy evolves around these values, and their strong culture now forms a filter for every business decision.
The company wants to grow, and of course there is nothing wrong with that. But senior leadership know that that growth has to filter through their value of “better together”. In order to achieve that target, they’ll need to set KPIs around word of mouth and product usage, along with revenue targets. This means that Sally understands that she needs to prioritise deals she knows are a good fit, because she wants customers that use the product she’s providing, and customers that the company can turn into raving fans. This also means that the company understands these deals will take a little longer to find initially, but in the long term the growth will accelerate as word spreads and case study after case study prove out the value of their product.
The company is also realistic about the fact that being “better everyday” requires focus and time, so they will set aside time and budget for their staff to participate in formal and informal learning. They’ll set up a KPI to ensure that every team member is putting effort into growing their knowledge.
And of course they'll be measuring this every step along the way, in a meaningful and effective way with a focus on outcome-based actions.
This is just a simple example, but it illustrates the point – your culture is who you are, not the aspirations you put on the wall as a side project. When leaders all the way down the chain filter their decisions by the core values of the organisation, you’ll know you are living your culture.
The next challenge you will face is working on what the right filters are, but that’s a topic for another post!
Ben Smit is the CEO and co-founder of Teamgage, a culture improvement tool for enterprise that helps organisations align their culture to their business strategy and embrace continuous improvement. Find out more at www.teamgage.com
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