“Culture eats strategy for breakfast.”
That quippy line, attributed to famous management guru Peter Drucker, seems to have taken on new significance with companies over the past decade.
Corporate culture is showing up in the news with increasing frequency, often in reference to negative cultural attributes contributing to shady business practices or toxic work environments. While these negative cultures can show up in companies of any age, a lot of recent news has been focused on startups, like Uber, which employed questionable business tactics and had numerous recurring issues with sexism. Likewise, fellow tech-unicorn Zenefits’ culture was infamous – with regular hard-partying, plus skirting of insurance training regulations. While it still remains to be seen if Uber’s momentum will carry it through the worst of its culture woes, Zenefits eventually went through a painful layoff of nearly half their staff.
It’s safe to say that whether a company tries or not, a culture will develop. It’s kind of like making wine. If you leave grape juice out long enough, it will ferment with wild yeasts. But winemakers rarely leave this to chance, carefully selecting their strain – and it can be the difference between a beautiful Bordeaux and a sour vinegar. For this same reason, companies are starting to get more proactive with guiding the creation of culture instead of letting things just happen. Cue the entrance of the Chief Culture Officer.
This role, fairly recent in its invention, is starting to become a more common fixture in companies. One of the first recipients of the moniker was Google’s Stacy Sullivan, who had it appended to her then title of Head of HR in 2006. The goal of this newly created role was to keep the feisty, innovative culture intact as the company expanded exponentially from scrappy startup to an enterprise behemoth. Not a simple task, to be sure, but an essential one to maintain the magic that made Google what it is today.
The Chief Culture Officer’s impact, though, extends beyond the walls of the company. In maintaining the company’s cultural identity, they’re also influencing the brand itself. People are starting to equate how a company treats its employees with the positioning of the company as a whole. If you’re a major bank that advertises itself as a family-like place for people to keep their money safe and grow their assets, but then has a cut-throat, aggressive culture internally, this disconnect is going to start to affect the business.
Moreover, visiting internal company review sites, like Glassdoor, is becoming an integral part of the job search process. People want to know what the company culture is like and how employees are treated. So if your company’s culture is out of whack, you are potentially losing out on high-quality candidates, just like that shady burrito shop down the street with the bad Yelp reviews.
Now that we have a general understanding of why a Chief Culture Officer is important, it can be helpful to understand what this person can do to help guide and build a culture. Even if our company doesn’t have this position, all managers and leadership within a company should be ambassadors for the desired culture of your company.
Stanford professor of management Charles O’Reilly offers some insight into this question *video*. He outlines four key levers for driving culture, the first of which being, what do you spend your time on? Where your focus lies sends a message to your employees. Second, it’s necessary to get people to feel involved. You have to work to make sure people know and understand that their work and how they do it is important. Third, it’s important to provide vivid illustrations of what exemplifies a company’s cultural values. Sharing with employees examples of your company’s culture in action. Finally, your company needs to reward employees for actions that align with the cultural ideal, like an employee who takes a risk that pays off, or approving projects that align with a culture of social responsibility or that show entrepreneurial drive. Monetary rewards are less important than recognition.
Professor O’Reilly notes that famed CEO Jack Welch said most managers fail to guide culture because they get bored, but at the same time, this is what is required: being both relentless and boring. Rehashing the same talking points all the time just feels unexciting, but it’s what keeps culture strong. There’s a reason why religions rely on mantras – repetition works.
While each company will have its own form of culture and norms, O’Reilly focuses heavily on the one trait that should be a part of all company cultures – and that’s adaptability. Markets fluctuate, consumer tastes change, and only those able and willing to adapt can survive.
Of course, that’s just one component of what makes a company successful. Employee engagement and belief in the company’s culture are essential. Netflix, a juggernaut in the streaming TV business, and also a company that has weathered numerous ups and downs with creative thinking around HR, is famous for its culture. Its CEO, Reed Hastings, and Chief Talent Officer, Patty McCord, put together an epically long slideshow on their company culture that is still widely circulated today (you can find it here). One of my favorite parts of the slideshow is in the beginning when they critique the generic “company values” that so many corporations pay lip service to but don’t actually integrate into their organization. The slide references a particular company with the following list of values etched into the walls of its lobby: Integrity, Communication, Respect, & Excellence. That mystery company’s name? Enron.
Hopefully, the rise of the Chief Culture Officer marks a new trend where companies pay closer attention to the formation of their culture in an intentional way. Ultimately, those that don’t are putting their futures at serious risk.
If you’re looking to work on your company’s culture, we offer a number of programs that are well suited to this purpose. In particular, we recommend our Active Forum and Emissary Process workshops. For more physically active programs, we recommend Breakthrough Trek and Trail Venture.
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