How to Create a Culture That Elevates Your Company and Employees Pt. 2
True Cultural Change Must Start with Intentional Planning
Let’s start with the obvious question:
If good company culture equals good performance, why doesn't everybody just change their culture for the positive?”
The reason? Because it's hard.
According to research conducted by Kevin Oakes, the CEO and founder of Institute for Corporate Productivity (i4cp), only about 15% of companies are actually successful at culture change. The rest have some level of failure overall. But Oakes has built his career on understanding the actions of that 15%, so his company set out a couple of years ago to research those businesses.
The study they conducted examined over 7,000 organizations with the express purpose of discovering any and all commonalities in the steps people took to change their culture. While two-thirds of the organizations did undergo a culture change, the important number to remember is 348. That is the number of companies that actually experienced a highly successful change.
Using that data and the attending insights, Oakes wrote Culture Renovation.
What’s in a Name? Transformation vs Renovation
As Oakes explains, the name of his book was a very intentional choice. If you search online for the term “culture transformation,” you'll get a lot of hits. After reviewing a couple pages of links, you’ll realize that “transformation” is the main way that people talk about cultural change.
However, it dawned on his research firm during their work that successful companies did not transform themselves. No one completely changed who they were. Instead, they retained the core tenets of their success – the purpose, values, and ideals that already made them great.
These businesses first acknowledged all the hard work that went into that success and then improved for the future. Much like a house you want to renovate, you hang on to what makes it unique and what’s hard to replace while enhancing the overall building. The goal is to increase its value over time while keeping the differentiators – possibly even amplifying them.
So, after extensive interviews with CEOs and CHROs (Chief Human Resource Officers), i4cp came up with 18 action steps as part of the Culture Renovation blueprint. From there, they developed their core three-phase process: Plan, Build, and Maintain.
Analyzing the Underlying Data About Corporate Culture
Oakes starts out the book with a core bar graph that lays out the traits of a healthy culture. The blue line represents high-performing organizations – companies with better revenue growth, market share, and profitability. Low performers in the grey flail and flop around as they struggle for consistent growth.
High-performers proudly use these terms to describe their culture. They are obsessed with delivering value to customers. More importantly, they show it by valuing execution and accountability, supporting diversity and inclusion, supporting continuous learning, and more.
The differences between the two lines are stark and noticeable. In fact, the only metric where low performers lead is their propensity to be a top-down, command-and-control organization. And plenty of industry research from firms other than i4cp reveals how that is a losing strategy.
I want to walk you through the Plan-Build-Maintain process by digging deep into the most critical of the 18 steps. In the remainder of this post, we’ll discuss “Plan,” while Part 3 will discuss “Build” and “Maintain.”
Exploring the Plan Phase
While it might seem obvious to start with here, Oakes believes this stage gets kind of skipped far too often. People get excited about changing their culture, jump headfirst into “Build” stage, and forget “Plan.”
But much like a house, if you just start knocking down walls without a blueprint, you will probably knock down a load-bearing wall and ruin the house. Thus, you want to make sure you plan accordingly so you don't ruin your company.
Listen and Listen Well
Of the 6 steps in this phase, the first one is the most important. Luckily, developing and applying a comprehensive listening strategy has happened a lot more during the pandemic. Companies have surveyed their workforce to understand their employees’ feelings much more frequently.
Oakes estimates that two-thirds of businesses do something like this. Some use feedback technology and monitor internal social sentiment with natural language processing (NLP) and a bit of artificial intelligence. Other companies go old-school by asking a rotating selection of employees a series of questions once a day.
Amazon uses the latter tactic, and I love one of their questions:
“Is your manager a simplifier or a complexifier?”
The questions set a tone inside the organization and encourage managers to think more philosophically about how they manage their team.
Find Your Hidden Star
I really love Step 5: identify and engage the key influencers inside the company. At any organization, there are people that everything seems to flow through. Not only can they answer all the questions, but they know how to get things done. Thus, the best way to begin this process is to look for the person at the center of your company’s beehive.
Such people are the hidden stars in a lot of organizations. I say “hidden” because, while you are familiar with your hierarchal structure and who's at the top of that structure overall, that’s not how work happens. Work gets done in a network structure and with a network flow.
However, the person at the top of the hierarchy is often not at the middle of that network structure. They are often on the outskirts. Alternately, the person in the middle of the beehive is often buried in the hierarchy, and sometimes, they’re introverts. So, if you asked senior executives who are these influencers, they often give the wrong answer.
Oakes states it's important to use organizational network analysis (ONA), a corporate psychology methodology to uncover these key influencers. Why? Because any time you want to change your workplace culture, you need these people onboard. You want them to help at the ground level.
ONA will also uncover when you have big departments that only talk amongst themselves and don't collaborate with other groups. This happens a lot in acquisitions where one company doesn't talk to the other company. So, until you do the ONA, you really don't understand where that collaboration is happening. I really think that's a key step in locating your hidden star.
Define What You Mean by Progress
Your business must also define clear measures upfront. Oakes found that two-thirds of successful organizations completed this step. Most of the unsuccessful companies failed to set any sort of clear goals or objectives. The National Association of Corporate Directors urges boards to develop qualitative and quantitative information around overall culture at their organizations. Why? Because culture measures can take many different forms.
I’m a big fan of the Employee Net Promoter Score (eNPS). It’s a really interesting metric to monitor over time, as it tracks employee sentiment with clear numbers that can provide an opportunity for bragging when attracting new talent.
For more insight into the other culture measures, visit Oakes and view his resources at the Culture Renovation website.
You Must Plan Your Culture Before You Create It
As the adage goes, “If you fail to plan, you plan to fail.” Wanting to create a better company culture is a good idea, but it will only happen if you and your senior leadership team are willing to put in the effort of deciding what that culture should be.
The detailed steps provided by Kevin Oakes and his i4cp researchers can serve as a superb launching pad for your efforts to develop a winning culture at your business. However, you should choose the path that is right for your specific context.
If you want help finding your company’s path to a new future with a culture that attracts and retains the best people, contact me today for a free consultation.