Compromising on culture is mortgaging the future. The interest rate on culture debt is crushingly high. Dharmesh Shah, Hubspot
Whether we're aware of it or not, our teams, companies, and communities have a culture or a set of cultures that informs how we view the world and our role in it. Culture is what culture does. It's not what we wish it to be, but what we do. It's a product of our shared history, beliefs, values, abilities, and structures.
This diagram illustrates one of many ways to understand company culture. In this blog, I'll unpack the inputs to culture across each element and then explore approaches we can take to align the culture with our aspirations.
Shared History
Apple would not be Apple without Steve Jobs. His imprint on the company will live on as long as Apple is around. The founder's blueprint is an essential element in understanding company culture and how it forms the paths and patterns of the company's future. While cultures can change and transform over time, the impact of the founder forms a key piece of the shared history, identity, stories, and achievements that make the company unique.
In 2002, The Stanford Project on Emerging Companies released the results of an 8-year study on startups in Silicon Valley. They categorised 5 archetypes of company cultures and which were more likely to be sustainable in the long run:
Commitment: The kind of company that people want to be in forever.
Star: Recruit top talent only, pay them top rates, and them all the resources and autonomy they need to do their job.
Engineering: Committed to exceptional engineering principles and letting the best idea win.
Bureaucracy: Everything has a documented process. High governance and change control.
Autocracy: You work, you get paid.
Non-type: Companies that don't fit into a single blueprint. Typically somewhere between between Engineering and Autocracy.
While it's no surprise that autocracies were the most likely to fail, what may be surprising is that even in high-tech Silicon Valley, commitment cultures were the least likely to fail in the long run. Commitment cultures create loyalty by cultivating environments that people love, hiring talent based on cultural fit, and coordinating through social forces like shared values.
Basic beliefs
Just as history shapes the patterns and paths a company can take, the underlying beliefs about purpose, how companies work, and the attitudes and assumptions that flow from those beliefs shape how people see the business and their role in it.
Whether you think businesses exist solely to maximise profits or shareholder value, or that they should have a purpose beyond profit that speaks to their impact on the world, that is a belief. That belief shapes our understanding of how work works, and our attitude towards people, whether they are resources in the pursuit of profit or partners in the pursuit of something more enduring.
Since the writings of Adam Smith in 1776, the belief that the purpose of business is to make money for itself and shareholders has been as self-evident as the belief that the Earth revolves around the Sun. In the west, this belief has transformed technology, wealth, and quality of living standards at a speed that hasn't been seen in the history of humanity. The Gordon Gekko trope that "greed is good" has driven many of the businesses that exist today, believing that self-serving motives will ultimately serve society through improved technology, wealth, and standards of living.
However, new beliefs about the purpose of business are emerging from the ashes of the fires that this belief has enflamed; from its impact on the environment, economic inequality, and its effect on the resources used to drive those businesses: people. Companies like Amazon with its purpose to be Earth’s most customer-centric company, have adopted a new belief that "There is only one valid purpose of a corporation: to create a customer." Peter Drucker.
Some go further. In his book The Infinite Game, Simon Sinek describes the 3 pillars of businesses that seek to play in the infinite game of life, where actions have consequences and long-term trumps short term:
Advance a purpose - Offer people a sense of belonging and a part of something bigger than the physical work they do for the company.
Protect people - Operate in a way that protects the people who work for us, the people who buy from us, and the environment in which we operate.
Generate profits - Money is fuel for a company to remain viable and to support the first two responsibilities.
To transform our company cultures, we need to explore the underlying beliefs behind them as they exist today, and whether they align with the aspirations of who we want to be and what we're working towards. We can then amplify the beliefs that align with our aspirations, and minimise the beliefs that don't.
Validating values
In my blog on values I defined why values matter, what happens when we don't value our values, and how we can embed them into our behaviours, decisions, and actions. At a basic level, values are like a contract, they define what we collectively accept as valid behaviours, and what we don't. They create a clear and common language for people to understand and take personal accountability for their actions and their interactions with others.
At their best, values define who we aspire to be as individuals, teams, and companies. They inspire us to be better and do better every day. At Netflix, they understand that a company’s actual values are shown by whom they hire, reward or let go. Following this logic, they explicitly define the specific behaviours and skills they use for hiring, rewarding, and firing decisions.
If your values don't resonate, then either they don't accurately describe your aspirations, or they aren't practiced in reality. When values aren't taken seriously, they become a joke, and their shadows emerge as 'how things really work around here'. If this describes your environment, you'd be better off removing the values and explicitly defining the values you reward in reality, even if it's conformance or control. That would at least be an honest starting point for conversations.
Advancing abilities
Now that we've explored how shared history, beliefs, and values shape our culture, we can unpack the skills, knowledge, resources, and learning needed to align with the culture we have and propel us to create the culture we want.
Skills - Informed by the structures, beliefs, and values of our culture, we favour skills that align with the domain we're in and enable us to achieve our goals. While this seems obvious, it is important to explicitly define and seek out the skills that match your needs, and provide the knowledge, resources, and learning for people to build those skills. In my experience, the last part of this is most commonly neglected, especially in trying times when they're most needed.
Knowledge - In order to build skills and capabilities, the knowledge to acquire those must be available and accessible to everyone in the company. By accessible, I mean it needs to be expressed in formats that the consumers can comprehend, inclusive of different learning styles, experience, and backgrounds. Examples of accessible knowledge include Gitlab's handbook, the public document that describes how their company operates, from compensation to compliance.
Resources - Being clear about the skills and knowledge you need is nothing if resources aren't provided to enable them. Two resources are the most critical: time and money. For people to build the skills and knowledge that the company needs to be effective, time needs to be explicitly carved out of daily work to enable this to happen, as well as funding to support this and any specific training or courses. Starting small, this could look like a couple of hours a week set aside for learning, right through to Google's 20% time, where people can spend up to 20% of their time working on what they think will most benefit the company.
Learning - Lastly, learning is as much philosophical as it is practical. Many of us have grown up in schools where we're told what to learn, how to learn, and then tested for our ability to understand and regurgitate. By learning, I'm mean our attitude towards learning, whether it's seen as a boring necessity, or a key component of the growth mindset we want to cultivate. To create the latter, people will need a sense of ownership, autonomy and empowerment over their learning approach. Learning how to learn is a great starter course for anyone wanting to take ownership of their learning journey.
Supporting structures
If you're still with me, let's build on unpacking the other cultural inputs to define the significance of structure in a culture. Structure includes traditions, practices, policies, and organisation, both formal and informal, that form how work and information flows through a system. Structures are often seen as the boring parts, the way we plan, the way we budget, how the organisation is structured, our recurring meetings, and rituals, and the processes and policies we put in place.
Structures permeate everything we do at work, and therefore communicate what the company really values. A common conflict is when these structures come in contact with our stated values. For example, if we have a value like 'be innovative', but the way we budget is centralised, onerous, and restrictive, one will inevitably suffer, and my money is on innovation taking the hit. Likewise, if we have a value around putting people first, but in practice we spend more time and energy on making people conform to processes and policies, one will inevitably win, and I'm willing to place bets on which one usually does.
Finally, most companies will have some kind of organisational structure that happens to look just like a pyramid. This formal structure visualises the reporting line from bottom to top, i.e. Tim reports to Tom, who reports to Toby, who reports to Tamara, who reports to Ted the CEO. This structure often has very little to do with how people interact with each other do get work done, and so informal and often unwritten structures exists that defines relationships between individuals and teams.
To redesign the way we view the organisational structure, we first need to understand how things actually get done, visualising the real relationships between individuals, teams, and departments, and then look for ways to improve the structure in alignment with the culture we want.
How to cultivate a high-performing culture
To create a consistently high-performing culture, we need to think like an architect. We need to understand and articulate the culture that we have before designing the culture that we want. We need to work through each cultural input as they exist to recreate structures, capabilities, values, and mindsets that align with our aspirations and create flow through the system.
A Culture Camp is one approach we can take to deeply understand what we have now, and go even deeper on the culture we want. This can be adapted to different contexts and constraints from a series of workshops, a repeatable process for specific areas of the business, or an all-hands Culturathon™️. The choice is yours.
Culture Camp
Day 1 - Unpack
Have participants complete the Bureaucracy Mass Index (BMI) survey prior to starting
Define the culture as it exists based on the 5 inputs and decide which type it aligns best with: Commitment, Star, Engineering, Bureaucracy, Autocracy, or Non-type
Unpack areas that are causing problems, e.g. Budgeting, Resourcing, Planning, Hiring, Capabilities, Management, Delivery, Strategy, Values, Processes, Policies, Structures, and Technology.
Explore case studies of different culture types to generate ideas for day 2
Day 2 - Explore
Explore the kind of culture you want to cultivate: describe specific mindsets, values, principles, abilities, and structures etc., that will propel your company to achieve its aspirations
Go back to the problem areas and refine which ones should be hacked first in alignment with the culture you want
Define clear statements for each key area to be hacks
Day 3 - Hack
Follow The hitchikers guide to hacking your organisation with camp participants and anyone else that could be valuable contributors.
Day 4 - Embed and Evolve
Define key measures for each hack to assess the impact once implemented
Define appropriate feedback loops for hack experiments to help them progress, and create a space for support and input
Further refine the statements about the culture you aspire to in preparation for sharing internally and externally
Craft communications to be transparent about the work that was accomplished, and invite others into the conversation to conduct their own hacks
Find other areas that could benefit from a camp, or could use your help interpreting and applying the cultural aspirations for their area
There you have it folks, how to understand your culture and transform it to align with your aspirations. It's not nuclear physics, but it's also not easy. To make meaningful change, we need to start with open and honest conversations about the culture we have before we can define the culture we want. If you want help with understanding how to sustainably transform your culture or organise a Culture Camp for your company, connect with me at hello@culturecoach.org. It's what I do.
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