Corporate Culture: You Don’t Know What You Think You Know

The list of books and blogs focused on corporate culture is expansive and it is a topic that has been discussed for decades.  Why then is culture still one of the top issues leaders seek to address in their organizations?  What holds organizations back from being able to develop the culture they are looking for? 

We have found the topic of culture is filled with a number of myths and misinformation that impede improvement efforts.  And we are not alone, McKinsey estimates that 70 percent of change initiatives fail.  Everyone knows that “Culture eats strategy for breakfast” or is it that “Culture eats strategy for lunch”?  While Peter Drucker is often credited with being the originator of this statement, research shows that it was first put in print by the Giga International Group in 2000 (Giga was a market research company purchased by Forrester in 2003). The phrase was first attributed to Drucker in 2011, but it remains unclear whether he actually said it.

Maybe that is the lesson for trying to change culture – you can’t learn something new without admitting that some of what you thought you knew isn’t exactly so.  In that spirit, we actually spent some time looking at the research (a partial list of references is included at the end of this post).  The list below (bolstered by our own experience) captures what we think we know about corporate culture:

  1. Finding purpose at work matters.  Effective leaders use purpose as a tool to inspire and motivate team members to do their best work, consistently.  When you know why you are showing up, day after day, it gives you the focus and motivation to complete the task at hand.  Research shows an organization’s structure is not what changes a culture from good to great, rather it is the purpose and values that inspires and motivates employees.  In the end, when you connect a role with purpose, you drive a culture of engagement and connection, more consistently tapping into that ‘discretionary effort’ that is increasingly critical in a knowledge economy.
  2. Psychological safety is required for a healthy culture.  A psychologically safe environment creates the opportunity to express oneself without the risk of harming your career, status or influence in the organization.  In fact, in Laura Delizonna’s 2017 Harvard Business Review Article, “High-Performing teams Need Psychological Safety.  Here’s How to Create It,” she describes how creating a sense of psychological safety leads to higher levels of engagement, increased motivation, improved learning and overall is a performance enhancer.  This is done through creating a culture allowing for risk-taking, for the opportunity to speaking one’s mind, and for the development of skills to allow for healthy conflict.  Too often big company practices, both formal and informal, do the opposite – punishing failure, discouraging conflict and giving credit to individuals not teams.
  3. Incentives matter While in the long run, a healthy culture is built on intrinsic (job satisfaction) rather than extrinsic (monetary) rewards, we have never seen a successful transformation without the conscious adjustment of incentives.  In fact, holding people accountable for the right measures and then empowering them to develop their own means to achieve them can deliver both intrinsic and extrinsic rewards and dramatically accelerate change.  Too many leaders fail to understand what really motivates their people on the front lines and fall into the ‘they will do what I tell them’ trap.
  4. Actions speak louder than words. Employees look to leaders to see how they are behaving in times of change to determine how they should respond.  Often, they are looking for comfort from the leader and commitment in their actions. When this is done well, a leader creates a culture of trust, with the opportunity to persevere through change. When there is a lack of clarity, leaders provide an opportunity for varied interpretations.  Worse yet, when employees see leaders acting in ways that are inconsistent with the stated strategy, they aren’t just confused, they frequently “make things up,” inferring the ‘real’ strategy from the actions they observe. In order to create a healthy culture, you and your leaders need to behave and speak consistently.  This drives trust and accountability that will blossom through the organization.    
  5. Culture change takes a long time. Experts agree that cultures cannot be changed overnight.  Most organizations experience what we call ‘work hardening.’ Anyone who has been around for a decade or more has seen dozens of change initiatives and corporate proclamations that come and go with little impact on their day-to-day activities.  It is natural for them to think that ‘this too shall pass.’ Our advice to leaders is to communicate, probably ten times more than you think you should have to, to ensure that your visible actions are 100 percent aligned with your stated strategy and then reward the early adopters who get on board with the change.  Unfortunately, getting this right requires patience and humility, qualities too often in short supply among senior leaders.
  6. Culture can exist in smaller groups.  A good manager can lead by example and either supplement or filter out elements of the broader corporate culture.  So, you don’t have to wait to be a senior leader, you can contribute immediately to the culture of your own group.  While this will likely improve performance and satisfaction, there are some risks.  It is important that the positive things you are doing are not seen as at odds with the direction coming from corporate. But if you can create an environment like this from the bottom up, it just might develop enough roots and as employees move to new roles, the culture has a better chance to continually thrive.

There is no doubt that changing corporate culture is a big challenge, but culture is one of the most critical things leaders should focus on, especially if they strive to leave a legacy.  Consciously articulating the culture you want to create and then keeping in mind the points above seems like a good place to start.

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