“This was the good town once.” What makes and breaks a great company culture?

We often talk about the importance of striving to build a great culture within our businesses. But what, exactly, constitutes such a culture and why, once in place, can it so easily fall into decline?

When talking to colleagues through the years about building culture, it eventually became apparent to me that the participants in these discussions, including myself, were each starting from a different definition of the term.  Furthermore, each of those definitions was incomplete, which perhaps is why none of them seemed to properly illuminate the method for building that great culture all of us sought. Eventually, it became clear to me that a company’s culture consists of three entirely separate elements. In the above conversations, we each were thinking about a different, single element, somewhat unaware of the part played by the others. 

Hygiene Factors - We often mistakenly associate culture solely with this category.  “Our company has a great office environment, there’s free fruit and soft drinks, everyone gets two screens, and we’ve just introduced Noodle Tuesdays!”.  This is an especially attractive definition for many executives because it’s something that HR leaders can directly affect, is easy to implement and looks great on the recruitment page as a bulleted goodies-list. It’s also the category that some VCs rankle about because – particularly in the Silicon Valley – it’s paid for by their investments.  

Goals and Execution – Of course, a big part of a company’s culture is what the business believes about its products, services, platforms and markets. These beliefs influence every strategic decision made by the people in the company, so it definitely qualifies as a cultural category. Ben Thomson, in his Stratechery Blog, consequently defines culture mainly in terms of the strategic beliefs that have made a company successful up to this point.    In contrast to the above category, this definition of culture is looked upon fondly by VCs (because it most aligns to their original decision to invest) and is generally ignored by HR leaders (because they can least influence it).

Of these two categories, Goals and Execution is, of course, more important; a start-up can still create a great strategy atop second-hand furniture and can safely forego Friday Massages without breaking the execution of that strategy. But what it can’t survive is a collapse in Trust, which brings us to…

Psychological Security -  For a company to thrive, and continue to do so, its people need to feel a high level of psychological security. Put another way, they need to be able to trust that the following holds true across the company:

·   We succeed together as a team; you are actively striving to help me be successful, just as I am you. You will not sacrifice me in the interests of your personal advancement. I will not put at risk the long-term health of your career or our team for personal gain.

·     I do not settle our differences by undermining you to others. And when you constructively and conscientiously challenge my view, we commit to deeply and actively listen to what each other has to say, and to working out the way forward together.    

·     As the business grows in size and complexity, so you and I will each strive to grow personally, so that we can still contribute to making our team successful in the future. And when I strive to grow, I will sometimes make mistakes. You will help to make that a constructive learning experience for me, not a punitive one. My mistakes are not your political opportunity.

·     We will each make ourselves explicitly aware of our own human tendency towards prejudice, so that we can recognize and put ours aside, when we are judging each other's contributions.

How Trust Declines

What is it that most often causes psychological security of this kind to decline in a business?  The decline, if it comes, is always originated from within the business, not from outside it.  External competitive and market challenges to a business that has a defensible strategy only strengthen an already strong culture by providing a rallying point that more sharply focuses the team. No, when a decline in trust comes, it comes from within.  

This is because maintaining such psychological security demands constant attention. No single, grand act can create or maintain it, nor restore it when it has been lost. Instead, every day requires painstaking reinforcement work from the broader leadership team and, most especially, from the executive team. 

Consequently, this is the most vulnerable area of a company's culture. We measure our executives on a quarterly or monthly performance schedule. Viewed that way, the continual effort required by those executives to maintain psychological security within the business sometimes doesn't make the cut when it comes to prioritizing their time and activities. Perhaps the short-term ROI isn't compelling. Or maybe adherence to the personal standards required to maintain such security feels limiting to a vaulting ambition.

But, without this continual effort, the level of trust between colleagues and between teams inevitably declines, and the overall performance of the company eventually follows. As selfishness rises, and teams isolate themselves from each other, their creative energy dissipates, undermining the delivery of even the finest strategy, which no amount of extra noodles on a Tuesday will repair.   

Whatever the size of the organization, it only takes one or two senior execs to begin acting in contradiction to the above behaviours, for a decline in trust to accelerate, as others react to or emulate them.  What was your response to the above examples of psychological security, when you read them?

(A) Principles to continually strive for in your workplace?

(B) Just some bullets for the induction slides, brought out for new-starts? A tick in the culture-section of the HR "people strategy". A bit of peace-and-love nonsense that gets in the way of getting things done?

If your gut-reaction tends towards the second option, then you are one of the people who will contribute to undermining your business in the long run, and you should consider whether leadership is right for you.

The Good Town

One of the most concise and vivid illustrations of such a cultural decline comes from Edwin Muir’s haunting poem The Good Town, the full text of which is given at the end of this article, and which charts the decline of an unnamed European town. To remain vigilant to the causes and consequences of a decline in trust within your own organization, you could do worse than to study this poem, returning to it from time to time, to consider it in the context of the culture that you are working to maintain.

The Good Town begins by describing how things used to be:

Look at it well. This was the good town once,/Known everywhere, with streets of friendly neighbours,/Street friend to street and house to house. In summer/All day the doors stood open.

Then we come to how the town stands now, after its decline:

Look well. These mounds of rubble,/And shattered piers, half-windows, broken arches... ...Our people have been scattered, or have come/ As strangers back to mingle with the strangers/Who occupy our rooms where none can find/The place he knew but settles where he can... ...We avoid each other. If you see a man/ Who smiles good-day or waves a lordly greeting/ Be sure he's a policeman or a spy./ We know them by their free and candid air.

And, having contrasted the town's earlier cultural bloom with this later blightedness, Muir goes on to identify what brought about this change. At first considering whether two ravaging world-wars are the possible cause, he settles instead on a deeper, less reassuring possibility:

…sometimes now, we ask ourselves, we the old citizens:‘Could it have come from us?’

As to the mechanism of decline, all it took was for those in positions of principled leadership to depart, or to be distracted from principle. In a given population, be it a town's, country's or company's, not all of those who aspire to leadership aspire also to grounding that leadership in trust, though they may use the same language, at a superficial level, as those who do. A slight imbalancing from principle towards superficiality too easily leads to the latter becoming the new standard. Eventually, in time, the majority will adopt it, either for safety or for convenience:

That once the good people swayed our lives, and those/Who copied them took a while the hue of goodness/ A passing loan; while now the bad are up,/ And we, poor ordinary neutral stuff,/ Not good nor bad, must ape them as we can,/In sullen rage or vile obsequiousness.

Once that decline had started in the town, and households, domino-like, in ever cascading rows, fell to mistrust and self-preservation, well, to then attempt to restore that original culture was no longer a question of a re-balancing of attitudes. Rather, to bring back a lost culture, we must go back to the very start, and begin over:

Say there's a balance between good and evil/In things, and it's so mathematical,/ So finely reckoned that a jot of either,/ A bare preponderance will do all you need,/ Make a town good, or make it what you see. No: when evil comes/All things turn adverse, and we must begin/ At the beginning, heave the groaning world/ Back in its place again, and clamp it there./ Then all is hard and hazardous. We have seen/ Good men made evil wrangling with the evil,/ Straight minds grown crooked fighting crooked minds.

In summary, translating the poem into a business context, provides us three lessons:

1) A culture of trust between colleagues is the most precious aspect of your company's culture, and the most fragile. It requires constant reinforcement to survive. And, if it doesn't survive, the company overall goes into decline, to be reflected eventually in its results. Those in leadership positions are responsible for maintaining that reinforcement, and must do so every single day.

2) When even a small number of senior executives depart from such a culture, there's a domino effect within the organization, as colleagues fall in line with the emerging doctrine, for reasons of career safety, or repulsed by what they experience, leave.

3) Once trust has departed, restoring psychological security is an enormous and lengthy undertaking.

As to where we may arrive, if we were not to inculcate the warnings in Muir's poem into our own corporate awareness, The Good Town ends:

Our peace betrayed us; we betrayed our peace. Look at it well. This was the good town once.

These thoughts we have, walking among our ruins.

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APPENDIX

The Good Town, by Edwin Muir

Look at it well. This was the good town once,

Known everywhere, with streets of friendly neighbours,

Street friend to street and house to house. In summer

All day the doors stood open; lock and key

Were quaint antiquities fit for museums

With gyves and rusty chains. The ivy grew

From post to post across the prison door.

The yard behind was sweet with grass and flowers.

A place where grave philosophers loved to walk.

Old Time that promises and keeps his promise

Was our sole lord indulgent and severe,

Who gave and took away with gradual hand

That never hurried, never tarried, still

Adding, subtracting. These our houses had

Long fallen into decay but that we knew

Kindness and courage can repair time's faults,

And serving him breeds patience and courtesy

In us, light sojourners and passing subjects.

There is a virtue in tranquillity

That makes all fitting, childhood and youth and age,

Each in its place.

Look well. These mounds of rubble,

And shattered piers, half-windows, broken arches

And groping arms were once inwoven in walls

Covered with saints and angels, bore the roof,

Shot up the towering spire. These gaping bridges

Once spanned the quiet river which you see

Beyond that patch of raw and angry earth

Where the new concrete houses sit and stare.

Walk with me by the river. See, the poplars

Still gather quiet gazing on the stream.

The white road winds across the small green hill

And then is lost. These few things still remain.

Some of our houses too, though not what once

Lived there and drew a strength from memory.

Our people have been scattered, or have come

As strangers back to mingle with the strangers

Who occupy our rooms where none can find

The place he knew but settles where he can.

No family now sits at the evening table;

Father and son, mother and child are out,

A quaint and obsolete fashion. In our houses

Invaders speak their foreign tongues, informers

Appear and disappear, chance whores, officials

Humble or high, frightened, obsequious,

Sit carefully in corners. My old friends

(Friends ere these great disasters) are dispersed

In parties, armies, camps, conspiracies.

We avoid each other. If you see a man

Who smiles good-day or waves a lordly greeting

Be sure he's a policeman or a spy.

We know them by their free and candid air.

It was not time that brought these things upon us,

But these two wars that trampled on us twice,

Advancing and withdrawing, like a herd

Of clumsy-footed beasts on a stupid errand

Unknown to them or us. Pure chance, pure malice,

Or so it seemed. And when, the first war over,

The armies left and our own men came back

From every point by many a turning road,

Maimed, crippled, changed in body or in mind,

It was a sight to see the cripples come

Out on the fields. The land looked all awry,

The roads ran crooked and the light fell wrong.

Our fields were like a pack of cheating cards

Dealt out at random - all we had to play

In the bad game for the good stake, our life.

We played; a little shrewdness scraped us through.

Then came the second war, passed and repassed,

And now you see our town, the fine new prison,

The house-doors shut and barred, the frightened faces

Peeping round corners, secret police, informers,

And all afraid of all.

How did it come?

From outside, so it seemed, an endless source,

Disorder inexhaustible, strange to us,

Incomprehensible. Yet sometimes now

We ask ourselves, we the old citizens:

‘Could it have come from us? Was our peace peace?

Our goodness goodness? That old life was easy

And kind and comfortable; but evil is restless

And gives no rest to the cruel or the kind.

How could our town grow wicked in a moment?

What is the answer? Perhaps no more than this,

That once the good men swayed our lives, and those

Who copied them took a while the hue of goodness,

A passing loan; while now the bad are up,

And we, poor ordinary neutral stuff,

Not good nor bad, must ape them as we can,

In sullen rage or vile obsequiousness.

Say there's a balance between good and evil

In things, and it's so mathematical,

So finely reckoned that a jot of either,

A bare preponderance will do all you need,

Make a town good, or make it what you see.

But then, you'll say, only that jot is wanting,

That grain of virtue. No: when evil comes

All things turn adverse, and we must begin

At the beginning, heave the groaning world

Back in its place again, and clamp it there.

Then all is hard and hazardous. We have seen

Good men made evil wrangling with the evil,

Straight minds grown crooked fighting crooked minds.

Our peace betrayed us; we betrayed our peace.

Look at it well. This was the good town once.’

These thoughts we have, walking among our ruins.

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Some other blogs:

Don't ask me why I'm leaving: why exit interviews don't work

Ending the unconscious sexism of the tech-industry

How to stop hiring the wrong senior people

The best leaders know when to be led