How important is your company culture at this time?
Back in 2014, one of the largest companies in the world appointed only their third-ever CEO. He came in at a time when the company was going backwards, and had a huge number of issues to address. He knew things had to change. And for him, this started with the culture of the organisation. At the 2015 AGM, he stated:
“Our ability to change our culture is the leading indicator of our future success.”
Who was this? Satya Nadella, CEO of Microsoft.
What is an organisation’s culture?
So what is an organisation’s culture? People define it in all sorts of ways, but I have two favourites: “The combined result of the values, attitudes and behaviours exhibited in its engagement with stakeholders both internal and external” (this comes from the sports industry); and secondly, “what happens when no one is watching.”
It’s the how, rather than the what. How an organisation operates. How it behaves.
The distinction between values, attitudes and behaviours is I think a really useful one in actually understanding how a culture is formed, how it moves and plays out.
Core Values are the principles that govern everything that happens in the organisation. Every decision made, every action on the ground, should be determined and viewed through the prism of your organisation’s Core Values.
Core Attitudes reflect the mindset and approach that the organisation’s people should be bringing to work every day. For Satya Nadella in his re-thinking of Microsoft, growth mindset was key: a belief in, desire to, and approach for, getting better. This is also where words such as Resilience, Focus and Determination come into play (attitudes which research from the world of sport has shown drive performance and success).
Core behaviours (sometimes known as Team Rules) then set out in more detail what these Values and Attitudes actually mean in terms of behaviours on the ground. How they translate into activity and actions. Again, this is something that elite sport is very good at; agreeing a set of behaviours to drive performance. These examples from cycling’s Team Sky give insight into the sort of things covered:
i don’t criticise the team;
I actively listen;
I proactively problem-solve for my team; and
I continuously look to learn.
How Important is it?
Satya Nadella clearly thinks culture is key, and he is of course not alone in this. Many of you will have heard of the famous Peter Drucker quote: “Culture eats strategy for breakfast.” For a more nuanced approach, arising out of detailed research done around the Corporate Governance Code (for listed companies in the UK), it was agreed that almost certainly a bad culture will make it impossible to sustain good performance over time, and will increase the likelihood of failure or at least a significant adverse corporate event.
Many organisations invest a huge amount of time and effort in defining, shaping and publicising their culture, with Netflix being a brilliant example. https://jobs.netflix.com/culture
But of course culture on its own is not enough. It has to be aligned with strategy, in order to achieve whatever the organisation is aiming to achieve (often set out as its Vision and Mission). And this is where shaping the culture gets interesting. There is no ‘right’ answer for what a culture should be. Each organisation will differ depending on what it is trying to achieve, and what is the best way to go about it. For example, if you are a company that is at the forefront of technological advance, innovation will probably be one of your Values. But if you are Lloyd’s of London, Values around safety and risk might be more appropriate. For a brilliant review of this key issue, take a more detailed look here .
How important is it now?
If your culture is strong, with your Values well embedded, driving the right decisions and behaviours on the ground, and clarity on the approach and attitude your require from your people, then your culture can help massively at this current time in:
your financial decision-making;
your people decisions; and
how you go about implementing any changes in strategy.
If your culture is not strong; if you haven’t clearly agreed and defined your Values, or if you have done so but not worked at ensuring this shapes behaviours and attitudes on the ground, then the current paradigm shift is an ideal platform to put time and effort into this. Try and define what your culture is at the moment, look at whether this is aligned with your strategy (bearing in mind any pivots you may have had to make), ascertain how different if at all your culture may need to be going forwards, and work hard to shape and embed this. Think back to that quote at the beginning:
“Our ability to change our culture is the leading indicator of our future success.”
For more support in this area, get in touch here