Corporate culture might be an over-used terms these days, but what it really boils down to is what behaviours staff undertake when no-one is watching.
After all, leaders set the tone of the culture. Whatever behaviours are tolerated or exhibited by business leaders, end up creating the overall culture of the company. Over time, without judicious weeding of poor behaviours, the culture can quickly become toxic and in need of strong weed-killer, that doesn’t kill everything else around it.
Red flags that signal urgent improvement include when an organisation has a staff member absconding with company money, employees are gossiping more frequently, turnover increases and great staff start leaving, workplace injuries increase, or worse a near miss or fatal event occurs, a new product launch is received poorly by the market, goals are rarely met or no new products or services have been created in years.
The longer the company has been around, the more likely poor behaviours are slowly strangling the life out of productive behaviours.
Take GM for instance. When an email was circulated by a GM lawyer that a victim died in a GM Cobalt vehicle because of a faulty ignition switch, nothing happened. Despite, internal engineers trying to solve the problem for ten years. No report was given to senior executives, no recall was launched and not even the general counsel was alerted. Instead, a report was commissioned that took six months to be written. And when that, unsurprisingly, pointed the issue to the ignition switch, the chief engineer responsible for the investigation deliberated over the result. Finally, a public recall was undertaken a full nine months after the initial discovery that GM was responsible. The result was 13 people lost their lives.
So why did employees ignore the crucial information potentially saving customers from dying from faulty airbags that don’t deploy? It was due to culture. A culture where people avoid bringing bad news to higher-ups. At GM, no one is held accountable for a decision. For decades, GM employees have never been held responsible for the success or failure of a project. People don’t even get fired for poor performance. What started as a genuine attempt to protect employees from losing their jobs has turned into a highly dysfunctional and rigid culture where no one debates, decisions are made in private and vital information is hidden. Now, Mary Barra the new CEO, is charged with the enormously difficult task of transforming the culture – a culture where failing to change the culture has famously become part of the culture.
What Behaviours are You Championing?
Without vigilant pruning, poor behaviours can quickly run rampant, making it hard to create change, unless a full blown crisis emerges. Even behaviours that were beneficial in earlier days, can morph into restrictive actions that can work against a company.
Consider MYOB, an accounting software company. The CEO, Tim Reed, recently told BOSS magazine, that he recently overhauled the company culture because:
“Essentially, people worked in a culture where they believed someone else was responsible. They believed 2 or 3 execs at the top were the only decision makers. The deep-seated belief was an overhang of the entrepreneurial days, when 3 people did make every decision. We now have a culture of test and learn.”
And that brings me to the next point. What sort of culture does you company need to nurture to move forward in the right direction? Every company is different and some might need more of a firm nudge. But a strong, visionary CEO needs to take a stand and assess the current culture and see how it can be fine-tuned to move in the right direction.
Time for Corporate Culture Change
Here are a selection of cultures that you might want to consider cultivating, in order to generate the right behaviours to reach your goals:
- A Culture of Learning – Encourage employees to always improve their skills. A culture of learning is centred around how the company approaches wins and losses, so that everyone learns from it. Errors are embraced as learning opportunities and new tactics are quickly developed to improve.
- A Culture of Innovation – In markets that are characterised by rapid change, cultivating a culture of innovation is a necessity. However, it’s fair to say that most industries have faced, or are still facing change, and the need to innovate is becoming more urgent. Unfortunately, hierarchical structures, slow decision making and risk averse companies make innovation difficult. Curiosity, learning and making mistakes without reprimand is what defines an innovative culture. An example is Atlassian, an Australian computer software company that has 24-hour innovation immersion days, where employees have to brainstorm, prototype and pitch their emerging innovations. Famously, named “FedEx Days” because the goal is for participants to originate, develop and deliver new products or services overnight.
- A Culture of Execution – Get new projects up and running fast. Encourage employees to “test and learn” to encourage iterative changes that work towards what the market requires. Goal setting is used to shape the culture. DaVita, an American company that specialises in dialysis treatment, focuses heavily on execution where the highest compliment an employee can receive is that “she is good at GSD.” GSD is the colloquial term for “Get Stuff Done.”
- A Culture of Personal Responsibility – Assign each individual with responsibilities and KPIs. Reward on performance. A questioning rather than telling environment that empowers employees to work out how they can improve.
- A Culture of Customer Service – Shifting market demands and consumer preferences mean that a lot of companies have found that they need to change to a more customer-centric approach. This involves transforming how departments interact, in order to ensure that customer issues are resolved more efficiently. Most of all, it means empowering customer service reps to handle complaints quickly. Back in January, I visited the head office of Zappos in Las Vegas for a tour. One of the customer service reps proudly told us that she spent four hours on the phone chatting to a customer. No sales were involved. The customer just wanted someone to talk to. In fact, the long chat was rewarded with the caller being sent a box of goodies for her efforts.
- A Culture of Entrepreneurship – If you want an entrepreneurial company, you want your employees to think fast and have the same level of responsibility as the owner. That means they are treated like co-owners and have shares in the company. It also means they are regularly shown the financial statements and can understand how the company runs across the board (and understand the amount of expenses and how profit works). This type of culture is beloved by companies who want to grow fast. One example is 1800-GOT-JUNK who doubled their company revenue within three years. They did this by educating all of their employees on their financial statements to encourage employees to reduce expenses for a share of the profits, while also encouraging ideas to improve profits.
- A Culture of Safety – If you want to ensure workers work safely, you’ve got to make it part of your culture. Many companies claim to have a safe culture, but when sales plummet, safety expenses are the first to get slashed, reducing workers faith the company cares about them. Conversely, Paul O’Neill, the former CEO of Alcoa, reversed falling sales by improving safety. He chose improving safety as the key habit to bring the entire company together. The result was total operational transformation. Within a year, Alcoa stock hit a record high and when he left Alcoa, its market capitalisation was 5 times more than when he started (you can read more at: Is this the best CEO safety speech ever?).
There are lots of different types of cultures that can be fostered by an organisation. It all depends on your company DNA of who you are, what you’re trying to achieve and what behaviours needs to be altered.
Essentially, the job of a CEO is to continually find ways of getting other people to do their best work in service of a shared goal. And the only way to do that is to provide an environment that gets your company and all its employees to collectively meet that goal as quickly and as efficiently as possible.