Good Culture vs. Bad Culture

Look, let me level set here.

I don't want to be one of these melodramatic CEO/Founders. I really don't. I don't want to sell anyone a bill of goods on how risk3sixty's culture is the best thing since sliced bread. I'm not a guru. There are enough of those out there. I have no delusions that anyone is going to love my company as much as I do.

Nor should they.

This is my baby. I birthed it, so to speak. So of course, this company has a special place in my heart. But when I look around at the team at risk3sixty - there is undoubtedly a thing or two worth sharing about the culture we've built.

For both business leaders and employees.

If you are a business leader, I think these are things that any company can emulate if they want. There is very little secret sauce to it. And if you are looking for a company to call home, I think these are things you should look for during the interview process.

To make it all concrete - I'll share five specific examples.

Example #1: Great Cultures Define a Mission and Track Against It

I recently read the book "The 4 Obsessions of an Extraordinary Executive" by Patrick Lencioni. Patrick says that clarity is the most important thing a leader should focus their time. First, you have to be clear to yourself. Then to your team. And ultimately clear to the marketplace you want to serve. Clarity focuses the energy of you and your team to accomplish great things.

Great cultures are cultures of clarity.

And if you aren't clear, there are important consequences. Leaders who are confused lose confidence and become indecisive. Indecisive teams are slow to act. Teams that are slow to act fall behind. And falling behind is how you kill a company.

Cultures that do not have a clear mission fail.

How Lack of Clarity Ruins Culture

Let me be clear. All of this doesn't just matter for good performance. It matters for good culture. Let me show you how this plays out.

If your company doesn't have a clear mission that implies the following:

• The leaders either do not know the mission or have failed to communicate it
• If you don't know the mission, you don't know how to be successful
• If you don't know how to be successful, you are guessing
• If you are guessing, you can't hold each other accountable
• Lack of accountability creates a culture filled with nervous energy, politics, anxiety, entitlement, unclear paths to promotion, infighting, and resentment

Examples of How We Define the Mission and Track It

It is up to the leadership team to make clear where we are going and why we are going there. For us, that means defining a 5-year target (we call that our 2027 BHAG), the mission for the current year, and the goals and KPIs that will help us achieve it all. Oh, and it all has to be clear and simple to understand. Our executive leadership team spends a lot of our time here. We call this "mission to metrics" alignment and here's how it works:

1. BHAG: A very clear 5-year target.
2. 1 Year Plan: An annual plan that leads us toward our BHAG but considers the short-term strategy and tactics for the year to come.
3. Clear Metrics: KPIs and metrics attached to our annual plan across all levels of the business: Company, each department, and individuals.
4. Tracking to Progress: A system of real time data, weekly, monthly, quarterly, and annual cadences that ensure everyone knows exactly how we are performing to plan.

If you are leading or evaluating a company, ask: What is your 5-year mission and how does that flow down to specific goals and metrics?

Example #2: Great Cultures Are Accountable to Core Values

The #1 job of a leader is ethical decisions in alignment with core values.

But which core values?

If you don't have a defined set of core values how do you make decisions? How do you coach your leaders to make decisions? And to what standard to you hold your team accountable?

If you want to stand the test of time, you have to be rooted in principles.

How Unclear Values Ruins Culture

Every team has values. For most teams, they are undefined, but they are still there. Maybe they are driven by the person with the loudest personality. Maybe values exist in pockets of sub-cultures. And maybe those values are rotten.

From my experience, here's how it goes:

• Teams that don't operate on a set of fundamental principles lack clarity in ethical decision making
• Lack of clarity slows down decision making and results in inconsistent quality of decision making
• Poor decisions like bad hires or bad investments will destroy a culture
• Too many poor decisions will destroy a company

Examples of Core Values In Action

I have long worried about core values becoming a cliché at risk3sixty. Words people are introduced to during onboarding - maybe a few posters on the wall - but ultimately meaningless. To avoid that pitfall, we have worked hard to bake core values into real processes that keep them at the forefront of everyone's mind - and drive behaviors.

Here are four examples:

1. Defined: First, your principles have to be formally defined. At risk3sixty, we have five core values: Grit, Craftsmanship, Steadfast, Team, and Freedom
2. Hiring: The #1 thing we can do to preserve culture is bring in the right people and keep the wrong people out. All candidates are formally measured based on core values during our hiring process.
3. Performance Reviews: Once we get the right people in the door, we need to help keep everyone accountable to our values. We measure team members against core values in our performance reviews every six months.
4. Decision Making: In a growing business leaders quickly become the bottle neck to progress. To decentralize decision making, we train our managers to make decisions based on our core values as part of our leadership development program.

If you are leading or evaluating a company, ask: What are your core values and what can you point to as evidence people are living by them?

Example #3: Great Cultures Have Two Primary Stakeholders: Team and Customers

In 2023, 1,190 tech companies laid-off 262,915 employees. I'm not judging those companies. Even great companies go through hard times. I am confident that the leaders of those companies took the decision to lay-off employees very seriously. But it does reveal that there is a fundamental misalignment in the system between companies and their teams.

Systematic misalignment is a problem.

Risk3sixty is not impervious to bad times. Not by a long shot. We are a company just trying to do our best like everyone else. But we have always worked hard to create a company that is in a position to do our best to align to two primary stakeholders: Team and Customers.

We believe that kind of alignment is fundamental to great culture.

How Stakeholder Misalignment Ruins Culture

Let me give you an example of how misalignment can ruin a culture. Let's assume that your company chooses to take on venture capital investment to scale the company. Here's how that might play out related to stakeholder alignment:

• By taking on venture capital investment, your company has agreed to take on the strategy of their primary investor. Namely, to optimize the company for a future exit.
• To achieve the investor's outcome, your company only has a limited number of investment options (e.g., growth, SaaS products) - even if those type of investments are not in alignment with the best interest of your current customers or team members.
• If investments aren't managed judiciously, bad things happen: Like layoffs, poor customer experience, radical changes to strategy without clear communication, buggy products, and more.

Examples of Good Stakeholder Alignment

At risk3sixty, we do our best to align our company to serve our customers and our team. Here are three examples of how we try to do that:

1. How We Invest: We invest significant money and energy into our GRC platform fullCircle. fullCircle improves the quality of life for both our team and our customers. We also pay for 100% of our employees training and certifications, which includes in-house leadership development programs as well as third party training. These investments are good for our team and our customers.
2. Incentive Alignment: We have designed pay, benefits, bonus plans, profit sharing, and long-term incentive plans to promote individual and team performance in alignment with serving the customer. This is a structural alignment that aligns behavior with serving each other and the customer.
3. Freedom to Make Decisions: We have avoided taking outside capital that might require we change our strategy to suit the investment goals of a capital partner. Because we maintain 100% ownership, we are free to focus fully on our people and our customers - even if that means more conservative short-term growth. That kind of freedom permits us to focus on executing our long-term vision.

If you are leading or evaluation a company, ask: Whose interest does the company serve?

Example #4: Great Cultures Are Transparent

For me, transparency feels uncomfortable. Mostly because I was never on a team that was very transparent with me. I didn't have any good examples to point to. That led to a lot of reservations and fears. First, I was worried about my own capabilities - for example, my communication has to be clear and crisp. That is a lot of work. Second, I was worried that the team wouldn't have the right context to receive information the way I intended. Would they overreact to bad news? No one wants to be punished for trying to do something good.

Then, in 2017, I read the book Great Game of Business by Jack Stack and Bo Burlingham. Jack's story gave me a new outlook on transparency. Jack built a whole company on the back of transparency and says that leaders need to “overcome your fear of disclosure” and become transparent to reach the highest levels of performance.

Transparency just felt like the right thing to do.

Two sure ways to kill a company are through arrogance and through ignorance. Keeping employees in the dark about the company’s financial health only stirs the rumor mill. - Jack Stack

How Lack of Transparency Ruins Culture

If you are a leader that feels like it's better to keep things close to the chest - I get it. But I would encourage you to consider one thing: There are no secrets. And where secrets reside, rumor and gossip fill the place of truth. Here's how it works in real life:

• Lack of transparency creates space for gossip and insecurity
• Where gossip and insecurity call home - rumors develop
• Rumors are distracting and erode trust
• Cultures can't thrive without trust

Examples of How We Do It

We decided that people who come work at risk3sixty are going to become excellent cybersecurity practitioners - and are also going to get a business education through transparency. They get used to talking about finances, they become comfortable with discussing business challenges, and over time they develop the skill of receiving and digesting information in the appropriate context. Here are three examples of how we try to be transparent:

1. Firm Governance: Our organizational structure balances prudent decision making and speed. For example, we have designated spaces for things like strategic decision making, risk management, and evaluating initiatives. This means that leadership can make decisions efficiently and information can flow up and down the organization to ensure transparency.
2. Open Book Management: We are transparent about firm performance (including finances) and decision making. We present firm health on a weekly basis during our all-hands meeting and do a deep dive each quarter during our on-site meetings. This helps give the whole team the context they need to execute on the plan with enthusiasm.
3. Decision Making Transparency: When we make important decisions, we communicate the "what" and the "why" to the team. That might seem like a little thing, but we have found that formal communication gives the team a sense of predictability and confidence. That leads to a lot of trust.

If you are leading or evaluating a company, ask: What examples can you point to as evidence the company is transparent about strategy, company health, and decision making?

Example #5: Great Cultures Have a Track Record of Excellence

It is a wise habit to ignore what people say and pay close attention to what they do instead. In my mind, that is why a track record of excellence is so important. It is the evidence a leader can point to - to prove what they are really all about.

And I'm not saying great leaders aren't going to have failures in their history. Heck no. Great leaders have lots of failures and mistakes. We are all human. And part of what makes a leader, a leader, is being in the arena. But in between those mistakes they are going to have success where it counts: People who trust them.

How a History of Inconsistency Ruins Culture

Here is how inconsistency will ruin a culture:

• Leaders who make decisions inconsistent with their core values send mixed messages to their team
• Inconsistency creates fear, uncertainty, doubt, and mistrust
• People cannot operate at full capacity if they are scared, paralyzed by uncertainty, have doubt in the mission, or don't trust their leaders
• When performance suffers culture fails. The company fails.

Examples of How We Do It

At risk3sixty, we have tried our best to earn a track record of consistently operating by our principles and core values. Here are four examples I would point to:

1. Management's Behavior: The number one job of a leader is ethical decision making in alignment with core values. Our team works hard to earn that reputation. Under scrutiny, I hope my team would attest that we make decision based on our values.
2. Communication Rhythms: At risk3sixty, we have a cadence of data sharing that creates a consistent track record. You could go back for 8 years and find data on weekly, monthly, quarterly, and annual updates. And what you would notice is that we have consistently did what we say we were going to do. I think that inspires trust and confidence.
3. Quarterly Newsletter: Since 2020 we have created quarterly public facing newsletters. In our mind, these newsletters are historical artifacts that tell the history of risk3sixty. They are an accountability tool that remind us to create a company we are proud to tell the world about.
4. Awards: You can be a great company without winning awards, but awards do inspire confidence. Here are a few of the awards we have won recently: 2x Consulting Magazine Best Firms to Work For, 6x Atlanta's Fastest Growing Companies, 5x Atlanta's Best Places to Work, 2x Hire Veterans Platinum, Top 100 CEO (Titan 100), 5-star rating on Glassdoor.

If you are leading or evaluating a company, ask: Does your company have a track record of ethical decision making in alignment with core values?

Conclusion: Too Long Didn't Read

Does your company have good culture or bad culture?

I hope this article gives you the tools to look beyond "company perks" and inspect the true heart of an organization - to determine if the culture is one you want to be a part - or if it's just skin deep. If you are a leader, take a look inside. Take this article as a challenge to build a great culture. One you and your team deserves.

1. Clear Mission: Great cultures are crystal clear about their mission and goals. And once they define them, they track against them with discipline. Great cultures are able to harness the full energy of the team to accomplish a worthy mission.
2. Core Values: Great cultures establish core values and hold themselves accountable to them. They hire by them, manage performance against them, and let core values guide important decisions. Great cultures live their core values ever day - not because they are forced to - but because they truly believe in them.
3. Stakeholder Alignment: Great cultures position themselves to serve two primary stakeholders: Their team and customers. While it is unavoidable that sometimes hard decisions have to be made - they do not sacrifice their team or their customers for the self-interest of the owners or outside investors.
4. Transparency: Great cultures are transparent about company health and about how important decisions are made. When people understand why things are done, it enables them to put in 100% effort to make it happen.
5. Track Record: Great cultures have a track record of excellence. The best predictor of success is past performance. Consistent action over time creates predictability and confidence. Confidence enables trust.