Does workplace culture come from the top?

Without culture, strategy can never be fulfilled.

A positive culture of achievement and personal development was a powerful differentiator while building lululemon. Coupled with our technical innovations, our culture enabled us to grow exponentially and spawn a global athleisure industry currently worth more than $80 billion. I’m enormously proud of the culture we created there.

Recently, lululemon’s CEO resigned after not acting in accordance with company culture. While disappointing, the circumstance has created an opportunity to right the ship by hiring a new, culturally aligned CEO. At a very basic level, this begs two critical questions: What is the culture and how exactly does one hire for it? These are questions that I’ve thought deeply about over the years and have strong views on.

Defining culture

Culture is a way of operating so that people act consistently, inside and outside the company. Consistency arises when employees have a personal alignment with the company’s vision and values, and share what I call a “linguistic abstraction.” A linguistic abstraction is essentially a glossary of 20 - 30 terms and definitions that everyone in the company uses and intimately understands. I’ve included below a few of the lululemon abstractions that were used during the years I led the company.

• Integrity: I will do what I say I will do, when I say I will do it, in the expected way. If I cannot fulfill my promise, I will immediately get back to all parties, renegotiate the terms and clean up the mess.
• Committed Speaking: Communication that includes by-when dates and conditions of satisfaction.
• By-When Date: The date on which a project or task is promised to be completed.
• Condition of Satisfaction: A measurable action or criteria against which completion can be measured.

To illustrate their necessity, consider the importance of asking for a document to be signed and returned to you by Friday at noon versus, “Hey, can you get that back to me on Friday?” Importantly, the person who is requesting the document has a specific By-When Date (Friday by noon) and Condition of Satisfaction (signed). This is an example of Committed Speaking, as opposed to just a very vague ask. The end result is a document signed and returned by noon on Friday, instead of something that arrives at the end of the day, leading to frustration and disappointment. Altogether, this process illustrates Integrity.

So where do these terms and concepts come from? This will be unique for each company, drawing from the founders’ experiences and the company’s situation, as well as a few formative business books or development frameworks. lululemon’s abstractions drew inspiration from my dad and my own life experiences, the books Good to Great by Jim Collins, 7 Habits of Highly Effective People by Stephen Covey and The Psychology of Achievement audiobooks by Brian Tracy, as well as coursework from the Landmark Forum and Lightyear Leadership (formerly Igolu). To avoid confusion, I recommend limiting this list to no more than five outside sources.

This may sound like another corporate branding exercise, but a good linguistic abstraction allows a company to communicate with speed and efficiency across all departments and geographies. A person in Vancouver, for instance, has to be able to communicate effectively with a person in Beijing. Just like the Gutenberg press or the fax machine or email, a linguistic abstraction is a technology that enables exponential speed of communication. When employees are on the same page - sharing a culture built on well understood pillars - absolutely amazing things are possible.

Hiring for culture

To be hired, a CEO candidate must ‘be’ the culture. For example, an athletic company would need to start with a true athlete at the helm to create and define that culture. Once defined, the leader needs to fully understand and value how and why that culture has created extraordinary profits.

At the fundamental level of vision and values, the Board, CEO and employees need to align with the company as a whole. The C-level management cannot operate with one culture, while the team operates with another. This is as true for a Fortune 500 company as it is for a professional sports team. Without this kind of cultural alignment, harnessing everyone’s talents and energies is impossible.

So how do you hire for culture? For starters, the people doing the hiring must embody the company culture. If the board members responsible for recruiting a new CEO haven’t understood and embraced the culture, then they certainly can’t hire for it. To get around this, experience tells me that the board will reframe the culture to align with their most desirable candidate. They’ll fill the position and declare it a win, insisting that “as the company grows, the culture needs to change.” This is an elegant cop-out: a way of making the company bend to their needs, rather than having them do the work to immerse themselves in the existing culture. 

In short, leaders who aren’t living the culture end up hiring others who aren’t culturally aligned. This happens over and over, eventually watering down the soup.

Ultimately, it’s also important that the board take the time to do a cultural pulse check on any new candidates. Lots of people are good at saying all the right things in interviews or over dinner. What’s critical is to see them in a fuller context. I’ve previously shared how I’ll take prospective business partners on a two-hour hike up the Grouse Grind. The beauty of the Grind is that I get to see how people react when they’re outside their comfort zone and faced with a challenge. Conversely, the hike gives them an insight into our culture and how we live and breathe it.

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