Key Learnings: COULD CULTURE BE YOUR COMPETITIVE EDGE?

 

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NEW YORK, New York April 28, 2015 — Corey McAveeney, Culture Geek at CultureAmp, previously worked in international trade and insurance brokerage where she witnessed critical flaws in company culture.  So now she’s doing something about it.  Today, she helps hundreds of innovative organizations build better workplaces.

Members of The NetForum met on April 23, 2015, at the offices of Holland & Knight to share their experiences, good and bad, about Enterprise Culture, and Corey was our Featured Guest.  We have often discussed complex issues at the NetForum but this was in a special category — we were immediately faced with the realization that Culture meant different things to different people and that before anything else we had to define what it was we were here to discuss!  And we discovered from the Culture pros in attendance that despite all the buzz regarding Culture, they don’t like to call what they practice as being about “Culture.” In fact, the Culture pros don’t use the term Culture because it trivializes their work’s significance in the eyes of their colleagues.

How then do we define Enterprise Culture?

What are people referring to when they talk about Enterprise Culture?  It seems that the term is attached in the popular imagination with those crazy things that cool startups do to keep their young employees happy: Ping-Pong tables, free food, yoga and office parties.  But that is the Culture flavor of the day…  Surely these perks can be part of a company’s Culture but Culture is more than activities and perks.

Two of our experts defined Culture in a similar fashion, although using different language.  One called it “The Implicit Norms” and another called it “The Actual Rituals” (e.g. not “The Stated Rituals”).  Basically, it’s how people actually behave when no one is watching.  There seemed to be a general consensus among the NetForum members that Culture is “how we work together”, in particular how we communicate, and who we trust.  So while the popular imagination is focused on the external manifestations of Culture, Culture is really about the how people relate to each other and to their work.  (Discovering these insights is what makes the NetForum interesting to us and to our members.)

What types of companies are managing their Culture?

Given the definition of Culture we just established, every company has a Culture of its own.  It is fashionable to be “working on your Culture” but whether you are or not, you have a distinct Culture, for good or for worse.

Culture issues seem to pop up at fairly predictable times in a company’s lifecycle.  One could be permanently working on their Culture but there are a few critical times when it is a must.  In situations where a company has grown from a founding team to a “real business” (the threshold of 70 employees was mentioned), early employees clamor for the “good old days” and decry the bureaucracy and hierarchy.  It is then that attempts are made to re-infuse the bigger business with the spirit of the original startup while acknowledging that the nature of the business has changed and there is no going back. In a merger situation, when two companies with their own cultures need to work as one, there is a need to mesh the two Cultures into one, or a new Culture needs to be invented reflecting the new merged company.

Special situations have also come up in the Tech startup world.  Some companies start on day 1 with Culture at the forefront of their consciousness — Culture is not a coincidence but is designed into the DNA.  The most challenging situation seems to be designing a Culture for rapid growth — how do you create a Culture for a company that is expected to grow from 50 to 500 employees in 3 years?  The book on that has not been written and most practitioners don’t have the experience…

The reality is that any company going through change needs to be thinking about Culture, all the time, as it is the invisible glue that holds the company together.

How are companies addressing Culture?

Many of the NetForum members have been through good and bad “Culture Projects” in their career.  (We had an informal survey with a show of hands.)  They all seemed to equate the Culture Project with a setting or resetting of Corporate Values.  The general sense was that these discussions about Values translated into posters that were easily forgotten.  The exception may have been when a company was going “back” to its previously strongly held and ingrained values.  So, getting new values may be a lot harder to remembering what your values have always been and getting help practicing what your preach.

A variety of means are available to create a Culture Project – everything from survey tools to organization design consultants – and there is no single right answer.  What was clear from the NetForum discussion was that there are better tools now for collecting information about the current state of the Enterprise Culture, a critical step in evaluating what to do as well as measuring results and success. The process seamed to be:

  • Understand where the company is hurting.
  • Talk to the employees (at all levels).
  • Develop a hypothesis about what’s causing the pain.
  • Develop and implement a change.
  • Measure results.

Interestingly, the results are typically understood before they show up clearly in traditional metrics.  This is often true because measuring results lags sometimes by a year or two behind the time that a Culture Project is launched.  Experts tell us you can “feel” something has changed before it translates into higher revenues or profitability.  It was also clear from our discussion that the metrics to tie a Culture Project to traditional financial KPI’s are lacking.  Is it because Culture People and Financial Types don’t live on the same planet? or because traditional accounting does not take into account what really matters.  Witness the OECD’s attempt to quantify Country Happiness in addition to GDP.

Why are leading companies dedicating resources to Culture?

Clearly, there is some aspect of a fashion statement.  Cool companies tend to their culture, so tend to yours and be cool.  Organizational development as a practice has been around for decades, if not longer, so what is the hoopla about!  But it does not mean that it is not a critical subject that merits attention and significant investment.

If Culture is about “how we work together”, then an organization that works well together should be more efficient, have employees with strong job satisfaction, have higher employee retention, and have lower costs overall.  And if you consider businesses with high volume employee-to-client touch points like physical retail businesses, then Culture can have a big impact on the top line as well.  We will continue to add to this blog over time (as we do with our prior summaries) to add data on this very point.  If you have your own data you want us to highlight, do send us an email.