Celebrating 186 Years of Growth and Prosperity — December 4, 2024

13 people dead.  A 325 page investigation report.  Called before both the House and Senate Subcommittees to testify; to explain.  Explain the inability to address the ignition switch problem.  A problem which persisted for more than 11 years.  A problem where many had, but no one took, responsibility to fix the problem.  Not a failure, but a history of failures.  GM suffered the fate of a poor corporate culture.  And they are not alone.  Too many companies experience the same types of issues and breakdowns.  Here are a few headlines about companies that have faced cultural problems:

“Uber’s Big Problem Is a Culture of Dishonesty”

“Fed limits Wells Fargo’s growth, citing consumer abuses”

“Report Blames Flawed NASA Culture for Tragedy”

“Facebook and Cambridge Analytica face class action lawsuit”

What is culture?  Over the years there have many definitions.  Some refer to culture as a set of customary beliefs and social norms of a group.  Another description has been the characteristic features shared by people in a place or time.  Think about it – some organization’s cultures are so strongly ingrained that “average joes” are familiar with the organization’s internal, yet public, corporate culture.  Disney, for instance, is known worldwide for their culture of guest service experience excellence, Zappos is known for easy customer service and also for paying employees to quit if they don’t feel matched to the culture.  Other organizations such as Ben and Jerry’s are known for having fun and keeping a “70’s vibe” while governmental cultures are often portrayed as stodgy and too rule oriented with poor customer service.

When thinking about organizational culture it has been described as the set of shared attitudes, values, goals, and practices that characterizes an institution or organization.

Robbie Katanga described it as, “Culture is how organizations ‘do things’.”

Regardless of the formal definition we all recognize the importance of culture.  It can be the glue that holds an organization together or the force that tears it a part.  And that is why we take it so seriously.  Culture eats strategy every day of the week.

So how do we know what makes a strong culture?  There are four elements to a strong culture:

• Clarity: A culture should be clear; crystal clear.  All too often employees are told they will figure out the culture over time.  Unfortunately that is an excuse for not having a crisp understanding of ‘who we are’ and ‘how we do things.’  At Nordstrom, customer service expectations are clear – always do what is right for the customer – there is no guesswork or two levels of manager approval for simple returns.  Expectations are clear to both the customer and the employee.
• Consistency: If culture represents ‘how we do things,’ then that should be repeatable and predictable.  Unfortunately many companies struggle with this concept.  They see culture as something that happens when things are going well or that we strive for.  But all that means is that culture is something we live by when it is easy.  And we all know we are defined by challenging times.  What we espouse and how we behave must be similar.  Take Southwest Airlines for example.  When flying on a Southwest plane, we expect the pilots and flight attendants to take safety seriously but also to do so with an air of playfulness and fun.  Their demeanors as well as their dress are more casual than most flight attendants.  This plays to their favor as they are consistently rated one of consumers’ favorite domestic airlines.
• Transparency: Politics, secrets, opaqueness are all enemies of a healthy culture.  We now work in a flatter, networked environment with employees that expect to have a voice. A lack of transparency creates doubts, destroys productivity and accountability, reduces retention and creates fear based decision making.  Make it a point to tell as much as you can as often as you can.  Instead of people filling in their own blanks with (likely) negative ideas, they will hear it right from the top and will feel more comfortable in developing trust and faith in their leadership.
• Interest on others: A company is a community.  Communities look out for those that are related to it.  Companies cultures that promote self-interest over the interest in others lack trust; trust with their employees, customers and the broader community at large.  Leadership is about serving others and a strong company culture should keep that principle front and center.

Knowing what culture is, what the key ingredients to a strong culture are and the repercussions of having bad culture, are not enough.  We must understand how to build, change and maintain a culture.  It is important to note that we must constantly pursue our culture.  Once we see it as achieved it will fade and fade quickly.  To put this in context let’s look at some numbers.

Based on studies from Maritz, CCL, NBE, Kenexa, Gallup and F&H Solutions Group…

• 58%-90% of employees trust their managers
• Only 14%-58% believe management is ethical and honest
• Only 15%-30% are actively engaged

What those numbers tell us is that companies and leaders take culture for granted.  They assume they have done enough and built up enough capital and goodwill.  However you can never build up enough capital and goodwill.  The work is never completed.  It is a process that must continuously be worked.  But how?

If we want to have a great company we must have a healthy, productive culture.  The quality of our culture is based on the quality of our network, associations; our relationships.  How can you measure the quality of the relationships at a company? By their conversations.  The quality of their discussions will tell you all you need to know about their culture.

• How honest are people?
• How well do people really listen to each other?
• To what extent are people curious?
• Do they jump in and productively debate ideas?
• Do they wait and see before they comment? Before they act?
• Does the discussion change based on who is in the room?
• How much gossip exists?
• Are the discussions hard on the people or the problem?
• Is the more of a “me” or a “we” perspective?
• Do people assume best intent?
• Are people truth tellers?
• Is there a meeting prior to the meeting?

These are all signals that demonstrate how healthy the culture at a company is at any given time.

The sign of a high quality culture is one where people feel comfortable experimenting; taking educated risks.  They are focused on opportunity rather than protecting the status quo.  High quality cultures are cultures where people are open about problems.  They attack problems quickly and together.  Everyone feels a sense of accountability and they openly express that accountability on their conversations.  Most importantly a sign of a strong healthy culture is co-discovery and co-creation.

Co-discovery is learning together.  So often people work independently today.  They present ideas and people react.  And when people disagree they avoid each other.  Co-discovery is the proactive effort of collaborating with someone who sees the world differently than you.  If handled in a healthy manner it leads to co-creation.  The building or development of a new innovative solution fostered by two or more people who see the world differently collaborating together.  Different parties jointly generating a mutually valued solution.  Now that is a healthy, productive, quality culture.