To a lot of people, it seems so darn easy. Hire motivated people and give them challenging work, plenty of authority, free lunch and dinner, lots of paid time off, and a company mission to do something more than make a few shillings, and they will knock the cover off the ball.
With a company culture like that, you can’t not succeed, right? If you’ve read any of my other articles, you know I won’t agree that anything in business is quite that easy. But, a motivated work force is a darn good start on the path to success. Why then, isn’t every company culture like Zappos or Google?
Polar Views from the C-Suite
I find U.S. executives are generally on opposite ends of the spectrum when it comes to corporate culture. There are those who feel it is a squishy thing and that it doesn’t move the needle (i.e., benefit the financial bottom line); and then there are those who are sold-out on the concept that corporate culture is critical to success and a key differentiator in our mature, highly competitive economy.
If I had to guess the percentage in each camp, I’d say 85%-90% of Fortune 500 C-level executives in the U.S. believe corporate culture doesn’t really matter. Think I’m nuts? I may be off a bit on my estimate, but not wildly. Now, let’s be clear about something — I am talking about what those executives believe deep down, when you get them alone in an honest moment—perhaps a few glasses of their favorite beverage under the belt. I don’t care what they say in HR meetings and interviews. I care about what I actually see, and I’ve seen plenty.
What about the Research?
I am solidly in the camp that culture matters, and the research is backing me up more and more. A recent Glassdoor study reported that public companies named in Glassdoor’s “Best Places to Work” list in 2009 outperformed the S&P 500 by 115.6% through 2014, while a similar portfolio named in Fortune’s “Best Companies to Work For” outperformed the S&P 500 by 84.2%. Those are staggering numbers! Take a look at http://www.forbes.com/sites/kevinkruse/2012/09/04/why-employee-engagement/ for more studies linking employee engagement (which is directly correlated with high scoring corporate cultures) to performance.
The Left-Brain Problem
So, why are there so many executives who still do not view cultivating a strong corporate culture as a business imperative? I’ve come up with three main reasons. The first reason is an overwhelming left brain orientation among this country’s corner officers. A significant portion of our country’s C-suite is comprised of “left brainers.” When I use that term, I am referring to people who value and primarily use their analytical, logical, linear portion of the brain rather than their conceptual, intuitive, holistic right brain.
We all have left and right brain hemispheres, although, in most people, one is more dominant than the other. And, this dominance shapes our world views. I am a recovering left brainer. Actually, I shouldn’t say it like that. I still value my left brain, although I realized (only recently, actually) that I was placing too much value on that part of my brain. I trusted my thoughts, not my gut. This manifested itself as a strong, almost sole, reliance on numbers and things I could quantify. If I could not quantify it, I didn’t trust it.
I realize now that the world is richer and more nuanced than I was acknowledging. Answers sometimes lie outside of spreadsheets. Culture, at its face, is one of those types of things – it is tough to quantify. As I said earlier, though, the research is backing up in black and white what plenty of people have known for a long time. For the time being, however, there are a lot of former investment bankers and management consultants running our best and largest companies. Those industries recruit, foster, and spit out legions of number crunchers. And, to be fair, there is nothing wrong with crunching numbers on spreadsheets. But, there is something wrong with not recognizing there is an entire world beyond the spreadsheets — a world full of interesting, irrational, and emotional human beings. This is the world in which culture, with all its beauty, mystery, and unpredictability, resides.
Understanding What Corporate Culture Really Means
The second reason is due to a misunderstanding of what company culture really is and what about it actually matters. A lot of people think culture is about ice cream socials, ping pong tables in break rooms, flexible work hours, etc. But these are just artifacts of culture. They do not create culture. They are the manifestation of culture. At the core, culture is about core values.
When most executives think about company values, they think about senior executives gathering in a Board room to come up with four or five words that the executives hope their employees will model through their behavior. Inevitably, “integrity” shows up. “Teamwork” is another easy choice. Throw in something about putting customers first and being environmentally conscious and, voila – exercise done. But, unfortunately it’s not that easy.
Values are best discovered by figuring out why employees are working for the company. What is driving them? Is there a shared vision and mission, not only for what the company does, but also for why it is doing what it does? It is tough to manufacture values. If you have to do it, it can be done. But, executives need to do a whole lot more than choose some words, put them on a website, and send out a company-wide email announcing the company values. The values need to be carefully selected and then baked into everything the company does.
I once worked for a services company that heralded innovation as one of its values. But, the people on the front lines—the ones talking to the customers day in and day out—were not particularly innovative. It is not that they were unable to be innovative, but they were not incented to be innovative. They were incented to sell commoditized solutions, not one-off projects. When customers came to the company in search of innovative solutions, they did not get it. They got a pat on the back and a request to refer over their colleagues who had projects that fit neatly into one of our set project boxes. In order for innovation to be one of the company’s values, and to actually mean something to the employees, its processes and incentives needed to be structured to not only support innovation, but to actively promote it.
So, most C-suite executives are, unfortunately, lost somewhere between misunderstanding what culture is in the first place, and an inability to arrive at shared values that the employee base actually owns. It is little wonder then why they aren’t embracing corporate culture initiatives.
The Trust Problem
The third reason most of our C-suite isn’t championing corporate culture is a lack of trust – executives do not fully trust their employees. Corporate cultures are certainly not one size fits all. However, strong cultures nearly always share a universal attribute – they are empowering to employees. Think about strong corporate cultures. What companies come to mind? Google, Zappos, Netflix, Apple, Nike, CDW, Chick-fil-A, Southwest, Twitter … These company cultures may vary, but one thing they all share is that employees are given a lot of voice and autonomy. These are not command and control environments. I am not saying they are playgrounds – these companies all do serious work, however, employees are valued highly and trusted. For example, Netflix does not track vacation time, and its expense and entertainment policy is five words long – “Act in Netflix’s Best Interests.” Talk about trusting your employees!
That policy is not a mere artifact of the Netflix culture. It stems from the company’s core value of judgment. At Netflix, this value is baked into their policies and processes (or lack thereof). I suspect very few C-suite executives in America trust their employees enough to put similar policies in place, and I am not so certain that the lack of trust is misplaced. There is a divide amongst most employees and executives in this country. The divide itself is rooted in mistrust. Executives do not trust their employees to work hard, make smart decisions, be loyal to the company, etc. Employees do not trust executives to consider employee interests, at least, as equal to their interests. The burgeoning income gap between executives and rank and file employees is just adding fuel to this fire. Until this underlying tension and lack of trust is addressed, rolling out five word expense and entertainment policies is not the answer.
No Easy Fix
As I said earlier, I am in the camp that believes there is no question that a bland culture is a problem in today’s business environment. Today’s empowered, mobile workforce is drawn to strong corporate cultures. This isn’t about rah-rah chants and the occasional ice cream social. Culture has a direct link to employee engagement, and employee engagement has a direct link to the company’s bottom line.
If you are an executive who believes that a strong corporate culture is a competitive differentiator, focus on those attributes of culture that really matter – your company’s mission, its reason for being, and your company core values. Remember that you won’t nail down a solid company culture by pulling a few nice-sounding words out of a hat and slapping them on the company website with the label, “Our Corporate Values.” Dig deep. Do the hard work. Why are people working at the company? What brought them together? What sustains them? Start here and do the heavy lifting before putting up a rock wall. I promise you it will be time well spent.