WHY CULTURE MATTERS
The saying ‘culture eats strategy for breakfast' is a vast understatement. Culture will absolutely make or break your organization in the form of productivity, engagement, agility, collaboration, innovation, customer satisfaction, burnout, turnover, and healthcare costs.
A recent MIT study found the largest predictor of the Great Resignation was toxic work cultures. This was cited 10 times more than compensation and work-life balance. Toxic culture is cancerous and includes things like exclusion, disrespect, lack of recognition, politics, bullying, discrimination, harassment, and cutthroat behavior. Besides the $223 billion cost of attrition from toxic cultures, the cost of those who stay in the organization is another $100 billion. The business case is compelling, to say the least.
New research shows 92% of leaders today know the importance of culture and the impact it has on the organization’s performance, but only 16% are doing anything about it because they think it's too complicated or time-consuming. As someone who has helped organizations of all sizes do this work, I can tell you it's not complicated but it does require leaders to be deliberate and vigilant.
WHAT EXACTLY IS CULTURE?
One of the biggest misconceptions is that culture is the office or the values on the wall. As mentioned in a previous article, this is not the case. Culture is the collective understanding of what’s acceptable amongst a group of people. It’s like the lifestyle of the organization that governs how people interact, how things get done, and what behaviors are tolerated. It transcends physical space. For example, whether people are at a client site, at a work happy hour sending an email during their commute, or working from home, they are demonstrating the culture in the ways they interact with each other.
Culture operationalizes the true values of the organization, which are not necessarily the ones on the wall, but rather, the ones people actually live daily. This is why leaders need to be very intentional to ensure the values they live moment to moment are the ones they want proliferating throughout the organization.
This brings us to another misconception about culture, which is that leaders “create a culture” by dropping some nice words into a deck, slapping them on the wall and then expecting the behaviors they want to see to follow. It actually happens in the opposite order. Leaders need to create the conditions for the behaviors they want to see and the result is the culture. They can do this through role modeling, holding others accountable for doing the same and sharing stories of those who are bringing them to life.
However, it's not one and done. Culture is a daily practice. As a living, breathing ecosystem, it’s constantly evolving as the business and people do. If you see something off-culture and do nothing, you’ve created a new culture. The culture should be initiated and role modeled by leadership, scaled by the HR/people team, driven by managers, and finally, built co-creatively, championed and lived by everyone.
If you think of culture as the air the organization breathes, it's everyone’s responsibility to ensure its clean, healthy, and lifegiving. If we were to describe a healthy culture, meaning one that enables people to thrive the most, it would include behaviors that demonstrate learning, curiosity, respect, inclusion, and recognition.
HOW TO SPOT AND ADDRESS SIGNS OF A TOXIC CULTURE
Incongruence - Incongruence between what the organization says it values and what it actually does on a daily basis is extremely detrimental. This can look like leaders not walking their talk or shying away from calling out off-culture behavior. This misalignment signals that duplicitous behavior is ok and quickly erodes trust.
Leaders Choosing Not to Lead - Just like an absent parent in the family system, when leaders don’t set the vision and structure to guide and hold people accountable, it creates a cascade of dynamics such as silos and politics, as well as an environment of uncertainty, anxiety, and chaos. Which means no one is focusing on the actual work. To mitigate this:
Increase transparency and understanding:
Ensure everyone is clear on the vision, purpose, and mission of the organization and how they fit into it.
Hold lunch & learns on what different teams do, their goals, pain points, and how others can help
Provide rotating teams 5 minutes during Town Halls to update the organization on the biggest thing(s) they are working on and any ways other teams can help or get involved
Ensure clear roles and shared understanding of goals amongst teams so they can see why they do what they do and how each team impacts the others.
Break down silos and increase collaboration:
Leverage the common ground between teams, such as shared experiences and the organization’s purpose and mission, as the starting point
Have team leaders add other departments as optional on their department or team meetings, to allow others to observe and learn what they are working on
Remove barriers to collaboration like technologies and data sources that don’t talk to each other
Operationalize knowledge transfer between various teams and groups through cross/reverse mentoring programs
Align incentives around collaboration:
Reward teams as a whole, not just individual star performers
Microsoft recently added two questions to their performance reviews: how has my work impacted or benefited those around me? and how have others and others' work benefited and or contributed to my success?
Lack of Transparency, Especially When it's Critical - When there is a lack of transparency about how things work, how the business is doing or upcoming changes, it erodes trust and increases anxiety. In the absence of information, our brains start creating stories to make sense of things and they are rarely good. This is why it's paramount for leaders to communicate early and often, especially during times of change and uncertainty. Even if they don’t have all the answers, all they need to say they don’t know and will come back with the answer. This level of transparency and vulnerability builds trust and quells the rumor mills that will otherwise spread across the organization.
Tolerating Bad Behavior - We’ve all heard of the ‘no A$$hole rule’, but these folks are unfortunately all too common. They may show up as the rainmaker sales bro who treats everyone terribly but gets to stick around because he brings in so much revenue. It can also look like the micromanager or gaslighting bully, who has secured their spot because he/she is great at kissing up and kicking down. Research shows that even 1 bad actor like this lowers the performance of those around them by an average of 35%. The data also show this behavior becomes contagious to others in their sphere. That doesn’t even account for the costs associated with mental health, productivity loss, burnout, and attrition associated with it.
Organizations can get in front of this by proactively asking employees about their experience and sources of friction, providing channels for anonymous feedback, implementing regular 360s, auditing exit interviews, and having a culture of psychological safety, where people can provide feedback candidly and escalate things without fear of retaliation. Leaders can also share a story in Town Halls or other communications channels of bad behavior and the action taken as a result to ensure to demonstrate no tolerance for it.
Individuals experiencing this should try to have a candid conversation with the oppressor to share the impact they’re having on those around them. Sometimes they are not aware of their impact. However, if it's clear the person’s behavior is deliberate, it’s best to escalate it and start looking for another organization to join. Hence the Great Resignation.
Lack of Candor - At the other end of the spectrum we’ll see a culture of mediocrity and passive aggression because people want to be ‘nice’, and as a result, do not hold each other accountable. One way to counter this is to create a culture of real-time feedback. Because most people are not naturally comfortable or skilled at giving effective feedback, it’s critical to ensure everyone at all levels is trained, comfortable, and committed to giving and receiving ongoing real-time feedback. Kim Scott has a great model for implementing what she calls Radical Candor, which provides an easy way to show candor with care. As she says, it's key to care personally and challenge others directly. The highest-performing teams leverage this type of feedback and ensure it is in constant flow; up, down, and laterally. An easy way to scale this is the After the Action Review (AAR) model, first used by the military. At the end of every meeting, save a few minutes to address 3 questions: What went well? What didn’t go well? What will we do differently next time? Its simple and because people expect it as part of the meeting cadence, there’s no feeling emotionally hijacked or taking it personal.
Lack of Psychological Safety - in an environment where there isn’t psychological safety, we’ll see a lack of agility, speed and innovation, as well as information hoarding, silos and plenty of bureaucracy. Because there isn’t a high level of trust in this culture, people don’t feel comfortable speaking up, being creative or taking risks.
Like trust, psychological safety is an organizational lubricant. With it, high perfor
mance and engagement are fast-tracked. Without it, people can’t bring their best selves, perform at the highest levels and drive the organization forward. Psychological safety is about voice, feeling comfortable speaking up, asking questions, being candid, experimenting and taking risks without judgment, ridicule, or punishment. It's critical for innovation, accountability, belonging, and ethical behaviors. Psychological safety is a precursor to engagement and engagement drives high performance.
mfortable making mistakes and being real without ridicule or reprimand. Reducing the threats felt inside the group, frees them up to focus on seizing the big opportunities and protecting the organization from the constant dangers outside”. Practical ways to create psychological safety:
Ensure everyone is contributing and/or being called on in meetings
Call out pink elephants and name the silent problems. A good way to do this is to ask people to list all the issues that are being avoided. Remind them that, as a team, they can only solve the problems that are mad
e explicit. Then instead of finding a single person who’s causing it, or should fix it, turn the issue into a collective problem to solve.
Celebrate the messenger. When someone steps forward with bad news or a ‘failure’, leaders should show appreciation and respect to them for taking the risk and focus on what the team can learn from it.
Normalize what Matt Smith calls taking a failure bow, where a person can say, “oops, I totally forgot to do X, I need to take a failure bow”
Send belonging cues that signal connection and the relationship will continue. This is done by finding and demonstrating links between this moment and the future or some larger, shared goal.
You may want to check out a recent interview I did with the Transform
Now podcast, where we discuss the importance of culture.
What are the most effective ways you’ve detoxed your culture? Leave your comments below.