2020 Is the Decade of Culture-First Organizations
Workplace culture is getting the attention it deserves, but it still needs to become a business priority.
I’m not a fan of end of year predictions. However, I couldn’t but celebrate when I read that Glassdoor anticipates that 2020 will begin a culture-first decade for organizations. Considering its proprietary data, including millions of company reviews, it makes a lot of sense.
There’s still a long way to go for CEOs to turn culture into a top business priority.
100% of senior leaders agree that workplace culture impacts financial performance. But less than half nurture their culture or fail to make their teams accountable for growing the culture.
Becoming a culture-first organization won’t happen overnight. Here’s how to get you started.
1. Stop managing your culture on autopilot
Culture is often in autopilot and not strategically designed.
According to a Gartner survey, only 31% of HR leaders believe their organizations have the culture necessary to drive success.
Many executives still struggle to manage the soul of the organization purposefully. They see culture as something fluffy, hard to measure, and a nice-to-have. Or believe that they are taking caring of culture because they are offering ‘cool’ perks or have an inspirational purpose.
Company culture is not about things, but everything that people do. Having a ping-pong table is nice, but it’s just a perk. Your company values mean nothing if they are not lived every day.
Unfortunately, in most companies, culture happens by chance, not design. Nurturing company culture requires that leaders focus on three things.
1. Clarity: Leaders should design and clarify what the culture is. They should drive alignment about the expectations and ways of doing things. However, building the culture should become everybody’s responsibility.
2. Passion: A thriving culture is one where people feel proud; it creates belonging cues. When repeated, belonging cues create Psychological Safety and community. People don’t just work at the same organization; they feel they belong.
3. Behavior: Actions, not Powerpoint presentations, define company culture. Leaders should reward the behaviors that bring the values to life and intervene when people put the core culture at risk.
Instead of managing company culture in autopilot, leaders must purposefully work on how culture is designed, clarified, communicated, and lived every day.
2. Make Culture a business priority
Company culture should be among CEOs’ top priorities, not something they take care of when they have spare time.
Every transformation is people’s transformation. Gartner predicts that 90% of digital transformations will fail if they don’t address the cultural foundation.
Start by selecting the values your company wants to encourage. Take collaboration, for example.
At Pixar, creativity is seen as a team sport. The only room for superheroes is in their movies. Pixar promotes candor and open collaboration. Directors appreciate all contributions, regardless where of or from whom they originated.
A growing collection of research has validated the real-world impact of a healthy culture.
A study by McKinsey shows that organizations can deliver, at least, 20% better financial results than their competitors if they possess a healthy culture. Innovation, talent attraction, ethical behavior, and customer satisfaction are all directly linked to the strength of company culture.
Leaders should treat culture with the same responsibility they treat other business activities.
3. Turn Culture into a sustainable competitive advantage
Culture is the only sustainable competitive advantage; it’s impossible to replicate. People can copy certain aspects, but the whole system and dynamics make each company unique.
Culture is why people join (or leave) an organization. It’s the glue that brings everyone together to achieve something bigger than themselves.
Workplace transparency has become the new norm among job seekers. Candidates are investing more time researching company culture before interviewing. People don’t just look for a job, but for a company where their talents can thrive.
Moreover, people increasingly prioritize workplace culture over cash. They are willing to earn less to work in a place they appreciate, not the other way around.
Building a healthy, deliberate culture requires substantial effort from leaders. Turning culture into a competitive culture pays off.
4. Culture is a team sport
Building a strong workplace culture requires everyone to participate. You cannot appoint a ‘culture chief’ and expect them to create culture alone.
One person can act as the culture instigator, but it takes the whole team to build it.
CEOs usually struggle when I pushback because they resist including employees in the culture design process. However, things change when we uncover the gap between how leaders perceive their culture and what employees believe.
Involving people throughout the process has the benefit of collecting diverse thinking. But, most importantly, it decreases resistance and increases participation.
Nurturing culture shouldn’t be a solo sport. Currently, only 46 percent of c-level executives hold employees accountable for the organization’s culture. Invite people to be part of the transformation journey, and ownership will increase.
Designing the culture of a company is team sport; it requires collaboration, not coercion.
5. Create a Psychologically Safe Culture
Fear and silence are the enemies of innovation and collaboration. When people don’t feel safe to speak up or challenge groupthink, don’t expect them to contribute.
Safety is like oxygen — you really don’t think you need it until it’s too late.
A change-fit culture requires taking risks, learning from failure, and having a learning mindset. Organizations that fail to create a safe culture won’t be able to embrace change and adapt.
Unfortunately, organizations still use a command-and-control management style. They inspire fear, not trust.
“My supervisor has become more overly controlling in response to their management hierarchical-ness.” — people tell me this in almost every company
To promote curiosity and learning, make it okay for people to say, “I don’t know.” Increase your organizations’ mistake tolerance.
Erika Hall says, “If you can’t admit ignorance, you cannot learn.” The continuous learning quotient (CLQ) is the % of people that can say “I don’t know” in front of anyone else. Intellectually humility turns people into better leaders.
Leaders are responsible for modeling behavior — they have to set the stage to frame the work and emphasize purpose. Become obsessed with building a pervasive learning culture.
6. Align values with behaviors
The most crucial culture alignment is making sure that values and actions are consistent.
Only 56% of senior executives believe that their organization clearly articulates the key elements of its culture. And 40% say company rules and procedures are not aligned with how we expect people to act.
Consistency is vital because it brings credibility and clarity to the values of the company. Over time, because of the reinforcement of the purpose and beliefs, they become second nature to everyone.
Inconsistency, on the other hand, can harm the credibility and create divisions. If people are confused, they are less likely to be aligned and support a culture transformation initiative.
That’s why the behaviors that are rewarded or punished play a key role in the Culture Design Canvas. Company values mean nothing if managers just pay lip service to them.
“We always have one meeting (or presentation) after another to prepare for. The show becomes more important than the work.” — an employee talking about inconsistency
Your company culture is shaped by the behavior you reward or punish.
7. Building a culture-first organization is a never-ending job
Nurturing a company culture is not a one-time job, but a lifetime one.
I laugh when I hear CEOs saying that they have a great culture, meaning everything’s okay, and they don’t feel the need to nurture it.
Workplace culture is dynamic; it requires ongoing attention. Designing company culture is not a one-off effort, but rather a continuous mission. Every company has room for improvement.
Some companies revisit their values from time to time; others replace team rituals by new ones or simplify their rules to keep people engaged. A few years ago, Netflix updated its famous culture deck to highlight the importance of diversity and inclusion.
Are your company values still relevant? How does your organization deal with mistakes? Are managers rewarding the right behaviors? Do your rules enable or limit people?
Ed Catmull said, “Figuring out how to build a sustainable creative culture wasn’t a singular assignment. It was a day-in-day-out, full-time job. And one that I wanted to do.”
Leaders must never forget that building a culture-first organization is a never-ending job.
Your company culture is a curious beast, as I wrote here. You can nurture it, but you can’t control it.
I encourage my clients to embrace a Japanese landscaper mindset. Once they finished building a new park, they don’t impose which is the right way to walk across it.
Japanese landscapers let people wander freely across the park. After some time, by observing where the grass is worn away, they make it official. And pave that path with gravel.
People, not park designers, define the walkways.
That’s precisely how you should approach culture: define the vision for change, but let people choose the path to get there.