What Most Leaders Get Wrong About Culture

Most leaders agree that culture affects nearly every aspect of their organization, including their ability to attract and retain the best people, foster high levels of employee engagement, adopt a change in strategy or direction, deliver remarkable customer experiences, or create a safe and inclusive environment.? But that’s typically where the agreement ends.

I was recently in a conversation with a CEO that told me “culture” wasn’t a priority for them because they were focused on building systems and processes.

When I asked why this was their priority, they answered:

“Because the company lacked important systems and processes to support the needed improvement in performance.”

When I asked why the company lacked these important systems and processes they answered:

“The previous leaders were really great at their craft, but not great at developing processes or structures, in fact they disliked it and would break processes when they felt like it. People ended up depending on ‘heroes’ to save the day. So over time everyone started to create their own ways of doing things and don’t really like to follow processes.”?

When I asked how the change was going, they said:

“It’s been a nightmare.”

People leaders often experience challenges that require their teams to increase the consistency or adoption of shared mindsets and actions- especially at times of change, growth, or a new strategic direction.? Though many recognize culture’s impact, few know how to manage it effectively, resulting in adverse effects on business outcomes and employee engagement.? The impacts can be felt in a variety of ways:

• Strain on creativity and an openness to adopt new ideas
• Decline of productivity and employee’s connection to meaningful work
• Lack of engagement or apathy with the company’s purpose
• Decrease in adaptability and responsiveness to change
• Slow decision making and increased resistance

Your business cannot outperform your culture.

While most leaders want their organization’s to be resilient and adaptable, they’re often creating inflexibility without knowing it.? Many leaders never received extensive training on culture management as part of their education.? As a result, they express confusion about what culture is, how it forms, and how it affects their business performance.? One of the biggest misunderstandings about how culture forms is the assumption that it just “evolves” over time or simply the shadow of what you do everyday.? This assumption leads many leaders to focus their efforts on hiring the “right” people, and managing relationships and expectations, with the idea that “good culture” will emerge in the process of creating great results.? Nothing can be further from the truth.

Culture does not form through the free and mutual experience between people.? Culture is primarily transmitted; it is taught.? Through transmission people build and reinforce a mutual experience (not the other way around).? In almost any community, a person or group of people will have a disproportionate amount of influence on the norms of a group.? In families, parents tend to have a disproportionate amount of influence over the norms.? In classrooms, this tends to be teachers.? In the workplace, this tends to be formal leaders and managers (although informal leaders play a role, too).?

It’s true that everyone plays a role as contributors to a team’s culture.? However, leaders play a particular role as owners and facilitators of the learning process with culture.? Understanding that culture is transmitted can help leaders clarify who is doing the teaching, what is being taught, and how they should facilitate the teaching process to influence outcomes.

Culture does not form through the free and mutual experience between people.? Culture is primarily transmitted; it is taught.

We spent time researching and observing different organizations to understand how they managed their culture.? The following four patterns emerged as common blind spots in approaches to teaching culture that made resilience and adaptability challenging for some organizations.? We also uncovered four disciplines used to manage culture more effectively that helped organizations advance their business outcomes and the employee experience.

Blind Spot #1- Unclear Beliefs and Behaviors?

Most organizations we researched had a written set of beliefs that spanned the usual mission, vision, purpose, and values.? And while many had them codified, very few of the employees we asked actually knew what they were.? What’s more, once folks were refreshed, we found that they interpreted those beliefs in different ways.??

For example, a common company value we came across was “integrity.”? You can imagine that if I asked one hundred different people in your organization what integrity means, there is a good chance I’ll hear one hundred different explanations.? Why?? The challenge with beliefs such as integrity, creativity, innovation, inclusion, or accountability is that they are concepts, and concepts mean different things to different people.? We already come into our workplace with our own interpretations of what these concepts mean and how important they are to us.? This can make it difficult to teach and build adoption around a common way of operating.

Discipline #1-Define the Actions?

Organizations that exhibited high-levels of adoption with shared mindsets and beliefs tended to think in actions instead of concepts.? They used statements that described the actions or behaviors employees would exhibit, and language that could be observed, described, or recorded.??

For example, Field Fastener, a distributor of industrial fastener solutions out of Illinois uses “Fieldamentals” to teach their culture, one being: “We ‘Learn By Doing’ because the fastest way to grow is to be in action.? We make our goals and progress visible for all to see.? We share and show obstacles, our plans of action, and what we learned to help us improve.”? You likely understand the belief, the actions to take, and could coach someone else to “share and show their obstacles” to reinforce the shared behavior.??

SouthWest Airlines has actionable values, Amazon has actionable leadership principles, and HubSpot has an actionable culture code.? The form is irrelevant.? When organization’s need to increase the consistency or adoption of shared mindsets and behaviors, start by defining the actions and behaviors to create a clear picture of the culture you are curating.

Blind Spot #2- Ignoring the 80/20 Rule

The Pareto Principle, also known as the 80/20 Rule , posits that in most situations, 80% of the effects arise from 20% of the causes.? So 80% of your outcomes are often driven by 20% of your actions.? We wanted to know what were the 20% of factors that impacted 80% of the workplace experience.?

We found that organizations that had defined actions were still being challenged with how best to teach and reinforce their culture.? This occurred most commonly for two reasons.

First, leaders tended to focus on activities that had the least amount of impact to shape culture.? Based on our study, we concluded that while there are any number of things that contribute to what shapes a workplace environment, six transmitters of culture emerged having an outsized impact on the day-to-day work experience.? When workplaces lacked actionable beliefs and/or did not effectively leverage key cultural transmitters to reinforce them (instead relied on hiring “smart people” or written values), they reported greater friction when navigating culture change.?

Second, leaders tended to engage in behaviors that had the least amount of impact to shape culture.? Most leaders default to communicating expectations and values.? Some strive to “walk the talk” by modeling desired behaviors.? While commendable, both of these approaches have the least amount of impact on reinforcing shared behavior.??

Discipline #2- Act on the Transmitters

Organizations that effectively leveraged shared mindsets to drive performance tended to communicate, model, and “operate," meaning they deliberately taught and coached shared actions through the use of daily rituals, routines, and practices.? Leaders in these organizations acted on high-impact culture transmitters everyday to actively teach, amplify, celebrate, and reinforce their shared beliefs & mindsets.? However, when we asked these companies what framework they used to align their actions with mindsets, most weren’t using a formal model.??

Informed by our research and insights, the Culture Web emerged as a reliable and validated model to guide Intentional Future’s approach to understanding the transmission of culture.?

Originally developed by Gerry Johnson and Kevan Scholes , the Culture Web Model helps leaders assess the strongest transmitters of culture to improve their ability to enable change, reinforce a strategic direction or foster operational performance.? The survey measures how a team is performing with each of the 6 interrelated transmitters. This assessment helps leaders identify and address key factors influencing your culture’s health.

We recently tested the Culture Web survey with the People Team at MOD Pizza .? The company had experienced a period of rapid growth, which challenged their ability to scale their culture effectively.? As a result, newer stores were reporting lower than average employee engagement scores creating concern for retention, productivity, and a healthy employee experience.? The executive leaders of the People Team wanted a way to identify where they needed to focus their attention.??

When the team reviewed their survey results they realized that while the core values of “Grit” and “Growth” were well-known in the company, the shared actions associated with them were not clearly defined.? They discovered they had very few daily routines in place to help standardize operations and reinforce growth and improvement.? Finally, while storytelling practices were a strength for them, they learned they weren’t amplifying and reinforcing the intended spirit of Grit and Growth.? For example, many of the stories being told and leadership behaviors being modeled in stores celebrated “grind” culture as opposed to “grit” and healthy resilience, contributing to burnout and fueling disengagement.?

The assessment provided the team with a quantitative score and targeted opportunities for improvement, as well as illuminated inconsistencies, “unwritten rules” and taken-for-granted assumptions that were also impacting their current culture and bottom-line performance.?

Blind Spot #3- Variable Methods Lead to Variable Results

Most companies today have a set of written values, yet many are challenged to consistently operate from them.? When leaders don’t operate from a shared set of beliefs, behaviors, or practices, they tend to exert their own individual beliefs and practices that influence and shape how their teams behave. ?Enabling such variability to become entrenched within an organization can pose challenges during periods of growth or transitions, necessitating collective commitment and engagement in behaviors aligned with the organization's desired culture.??

As one manager put it, “Employees get where we’re trying to go, but they still aren’t doing what we need them to do.”?

Discipline #3- Use Leader Standard Work

In addition to defining actions and aligning them to high-impact transmitters (i.e.- rituals, routines, storytelling), organizations that exhibited healthy and adaptable cultures also intentionally embedded teaching into their daily management routines.? Leader Standard Work (LSW) is a structured set of behaviors, actions, and tools that guide consistent leadership practices that are incorporated into daily work. ?LSW is commonly used in industries such as manufacturing or hospitality, and documents a set of standard management responsibilities for leaders on daily, weekly and monthly basis (shift huddles, audits, team meetings, 1:1’s).? Typically a practice to support operational excellence, LSW provides management with a transparent, consistent and reliable structure to assess and adjust the health of their business.

LSW typically focuses solely on operations, however, the organizations we observed used LSW to incorporate opportunities to intentionally teach, model and coach the behaviors that defined their culture.? By doing so, they were adhering to the “say, behave, operate” model and were able to use their LSW as a basis for continuous improvement.

Kaas Tailored based in Mukilteo, Washington, designs and manufactures upholstery for retail? stores such as Nordstroms and aerospace clients such as Boeing and Blue Origin.? Kaas uses LSW as an integrated practice to help them maintain exceptionally high levels of quality and safety required by their aerospace customers, as well as teach and reinforce their people-first culture.? Leaders have standard routines each day that include huddles, meetings, quality-reviews, and time for continuous improvement.? They also have rituals embedded in each routine to create a consistent connection with their core value of “Improve Every Day.”? Different team members take turns leading huddles and meetings which include questions that everyone engages in, such as:

• What is challenging you this week???
• What is something you are avoiding?
• What are you testing this week and what do you expect to learn?

Leaders at Kaas Tailored explained that having the structure of LSW enables them to reinforce the shared actions they desire, and also provides a vehicle to introduce new mindsets they need to adopt as the business grows and faces change.???

Reliable methods lead to reliable results.? Leader standard work is a simple and powerful management practice to ensure leaders walk the talk, own the teaching process, and provides a vehicle for ongoing evaluation and adjustment of what gets taught.?

Blind Spot #4- You Can’t Adapt What You Don’t Manage

Culture exerts heavy influence over organizational performance, but very few organizations actively manage how it is transmitted and mistakenly focus on the outcomes of culture, such as engagement, productivity or performance.? Listening sessions, surveys and data analytics are commonly deployed tactics, which are useful when trying to understand how people feel about their environment.? However, one challenge with them is that they are all lag measures, meaning they tell you something about how the culture after it has been experienced.? Second, it is often unclear how to shift the sentiment.? Over time, this can leave leaders feeling like they are playing a game of whack-a-mole, chasing new issues, deploying one-off initiatives and puzzled why it’s so hard to make real progress.?

I’m not challenging the importance of employee listening systems.? I am, however, calling out that simply relying on these systems may not yield the results you intend.?

Discipline #4- Create a Rhythm of Learning and Accountability

Most organizations have systems to manage their finances, operations, sales, and almost every other critical function, yet very few have a coherent system to manage their culture.? One opportunity is to help leaders develop a cadence that is regular and consistent to continuously assess with their teams how their Leader Standard Work is impacting leading indicators of the employee experience and business outcomes.? We call these Key Behavior Indicators or KBIs.????

While it is very important to measure results and monitor Key Performance Indicators or KPIs, it is equally important to monitor how our behavior is evolving in the intended direction to support our KPIs.? For example, it is possible that zero safety incidents occurred on a hospital unit over the past month, but if no near misses were reported or preventative measures taken to create and increase safety, this historical KPI has no predictive value.? KBIs such as near misses reported, ideas generated, experiments attempted, recognition shared, amount of feedback given & received, or number of customer success stories told tend to be predictors of future performance, which is why it's important to understand the extent to which they are present.? Some companies that we visited attributed KBIs as foundational to their operational excellence programs, including Autoliv , US Synthetic , and the Christie Clinic .

Coming back to a cadence, another practice includes a monthly meeting to review LSW and KBIs.? This meeting can be completed in 30 minutes or less.? The team meets to assess how consistently they are practicing shared actions, expressed as KBIs, and then assess how well their LSW is amplifying and reinforcing those actions.? It is an opportunity to discuss issues, inconsistencies, as well as brainstorm new practices team members may want to test and adopt to teach and reinforce the shared beliefs.

Creating a rhythm of learning and accountability provides critical benefits that help leaders and teams manage and grow culture:

• It enables leaders to continuously assess the effectiveness of their LSW on shared behaviors (KBIs) and performance (KPIs)
• It invites feedback and coaching by leaders, for leaders that supports the alignment of culture and performance in the organization
• It creates a vehicle for team members to contribute to the culture by having them create and/or own practices to actively teach shared beliefs and behaviors to improve the employee experience, the customer experience, and team performance

A Call to Action

Leaders have a lot to do, and a limited amount of time and resources to do it all.? The four disciplines outlined in this article guide your teams to take small, frequent, focused, and impactful actions to shape shared behaviors every day.? It provides a structure, which creates engagement and action, that leads to real results.? It totally flips the typical approach to culture-building around and respects the reality that leaders are responsible for teaching culture, and have to do it with a limited amount of time and in the midst of our daily operations.

At Intentional Futures we are passionate about building workplaces where people know who they are and what they do make a difference. Our experience has shown us that people respond to the environment they are in, and that in the workplace, leaders play a pivotal role cultivating healthy and productive environments that increase both employee fulfillment and organizational effectiveness. Companies pay a big price for not knowing how to support their leaders to intentionally design and cultivate culture.? We’d like to change that.