My concern, shared by many others, is that the critical topic of Culture has been usurped by fallacies and falsehoods.
If you’ve not read that post, here’s an abbreviated list I called out previously;
You Can Magically Create A “Innovation”, “Entrepreneur”, “Risk” Culture
You Can Copy A Culture
Foosball tables, plaques on the wall and “Beercart Friday’s” Are Your Culture
Employee Engagement Is An Objective
Culture is a “Feel Good” Exercise With No Business Impact
Despite every intention of finishing with the 5 other Culture fallacies, comments from you Dear Readers raised several other fallacies which warranted inclusion. Several were more interesting and insightful than my originals.
I appreciate those who raised them and even provide anecdotes from their own experience.
So, here are the final 5 Culture fallacies I believe we all need to put to bed.
Fallacies that get in the way of a legitimate discussion about how Culture can be – and is already – a competitive business differentiator and advantage.
#6 – Culture only impacts employees and has no external impact
As the notion of Customer Experience becomes a point of obsession for every organization, what seems to be lost is the criticality of employees – yes real live human beings – to manage and deliver that Customer Experience.
The smiling and attentive Disney Parks employee, the fun and zany Southwest Airlines cabin crew, the well-meaning and customer obsessed Call Service Representative at Zappos.
In each case, those are the Customer “Experience” moments that end up on review sites, on gushing Facebook and Instagram posts and become the word-of-mouth marketing fodder that drives repeat customers.
People may appreciate your slick frictionless website.
But they’ll remember your attentive, helpful and engaged people more.
Tell me how culture has no exterior impact and I’ll remind you that Jeff Bezos, fast becoming the most admired and respected CEO globally, paid over $1 billion dollars for Zappos to buy their culture. His words not mine.
#7 – Culture is HR’s responsibility
Perhaps not a fallacy as much as a statement in evolution. Culture has traditionally been the domain of Culture as HR was given the tasks that impact Culture.
Policy, rules, onboarding, annual reviews, hiring, firing, union negotiations, dispute resolution etc. All these elements – and a multitude of others too – were the subject matter domain of HR.
In today’s organizations Culture responsibility may lie with HR but Culture accountabilitylies with Leadership. Leadership set the strategy but, importantly, they set the tone and tenor of how that Strategy gets delivered. Through their explicit actions Leadership defines what Edgar Schein calls the 3rd layer of Culture – tacit assumptions – or the way that decisions are made in an organization.
If HR spends 3 hours telling new employees about the critical values of “listening and customer centricity” but seasoned employees know that the fastest way to get promoted is by selling customers more products, products they don’t actually need, then which behaviour do you believe really reflects the Culture?
HR may be responsible for ensuring that employee engagement scores metrics like “collaboration” and “teamwork” are measured and tabulated but it is Leadership that sets the conditions by which collaboration and teamwork actually occur. Or don’t.
#8 – There is no need to change a successful Culture
Culture is inherently born from the shared successes of an organization. Stands to reason, if an organization tries and repeatedly fails at an activity they either adapt or perish. Successes, and the actions and behaviours that lead to them, become hardwired. They become part of the culture.
There is a lot to be said for “if it ain’t broke, why fix it”
Through that lens, there’s really not a whole lot of incentive to change. The larger issue is that success can breed complacency or worse, arrogance. Many of the most successful organizations look at their culture as another component in their success toolkit. An element to be reviewed, analyzed, tinkered with and modified with as much diligence as optimizing their supply chain or understanding the attribution of their digital media investments.
Tony Hsieh of Zappos, arguably one of the most lauded and admired cultures globally, took the radical step of experimenting with Holacracy as a deliberate way to keep Zappos’ culture evolving. Many would consider the experiment a failure but the point was about evolution and change.
Another admired CEO, Garry Ridge of WD-40, takes the evolution idea even further by making learning a core component of his entire organizational ethos. To stop success breeding complacency, apathy or arrogance at his organization he asks this deliciously simple question “When was the last time you did something for the first time?” What a glorious way to ensure everyone keeps thinking and learning.
For Culture to be – and remain – a point of competitive advantage or differentiation, leaders must be willing to let (or force) their culture to evolve. Lou Gerstner’s fantastic book about IBM “Who Says Elephants Can’t Dance” is a masterclass in what happens to a brilliant organization when their culture is allowed to harden and ossify.
Today’s most successful organization’s realize that survival in our hyper-competitive environment requires deliberate and diligent re-evaluation and refinement - of all parts of the business. Culture can’t get a hallpass from that evaluation.
#9 – You should fix a broken Culture
In light of #8 this might seem a bizarre fallacy to propose but it is one that has significant merit.
From passionate articles in HBR to the writings of Edgar Schein, there is overwhelming consensus that “fixing” your Culture should not be a stated imperative but is an outcome of addressing more core business issues and the associated decision-making, actions and behaviours.
Or to phrase it differently, focus on fixing the business issues and the culture changes will occur.
The HBR article highlights a great set of corporate examples where the CEO’s didn’t set out to change the culture. Their focus was on addressing more immediate issues like declining customer service attributes, worsening relationships with unionized employees, an aggressive and cut-throat management team.
Rather than tackling the underlying culture, the CEO’s tackled issues like decision rights (pushing autonomy down to the actual customer service folks), reviewing compensation and benefits (particularly for dis-enfranchised union workers) and heightened praise for transparency (to executives who were fearful that showing weakness would result in them being marginalized).
In short when the organization saw positive results from these new behaviours, the culture began to shift. A direct onslaught to tackle the culture first would not have been as successful.
#10 – Culture eats Strategy for Breakfast
No doubt Peter Drucker’s meme has floated past in your newsfeed in the past 24 hours or a colleague has dropped this overwrought phrase into some meeting recently.
My issue isn’t that the phrase has been so over-used as to become trite. The issue is that it creates the wrong perspective. Rather than setting Culture and Strategy as two conflicting opponents or choices for an executive team, I would suggest that it is more accurate to say “Culture is the Strategy”
Look at any high-performing organization and you quickly see that the decisions they make, the business arenas they operate in and the business areas they avoid are often driven by their Culture. Wal-Mart has a culture where every penny counts – go to their Bentonville HQ if you want to see just how much they live that ethos – so the notion of them entering into a high-margin business would be an anathema to them. But, as I mentioned frequently, culture drives how a business behaves and that has a direct impact on the customers it attracts.
British Airways and Virgin Atlantic both have a high service ethic but their cultures determine how their employees deliver that service. And, by extension, that will determine which customers will be attracted to each airline. Four Seasons and Shangri-La are both incredibly luxurious hotel experiences but, again, the delivery of that attentive service is discernibly different at both locations. That is Culture – and that will impact the clients who choose one over the other.
As such, saying that Culture eats Strategy seems too narrow a perspective. If Strategy is about determining, in AG Lafley & Roger Martin’s famous words, “Where To Play” and “How To Win” you could argue that Culture is Strategy.
Dear Reader, I’ve had a tonne of fun writing this list up. It has involved a broad amount of reading and research but it does highlight the primacy of Culture as a business driver.
Your organization has a Culture already, the real question has to be – is it building or stifling your opportunity for growth and success?
I’d love your comments and thoughts below.