Culture Is A Key Success Factor

My friend and colleague, Richard Bell, is one of the exceptional group chairmen of Vistage International, the world’s largest CEO membership organization. In a conversation just yesterday, Richard confirmed that the work I’m doing building values-driven corporate cultures is becoming more and more relevant in today’s challenging business climate.

Richard’s experience working daily with leading CEOs in Silicon Valley suggests that it is getting harder and harder for business leaders to find “True North.” The vagaries in the market, radical changes in customer bases, and trying to predict the future in uncertain times are making it difficult for business leaders to maintain perspective.

“In the absence of landmarks and an external compass, successful business leaders are turning inward to rediscover their inner compasses. They are looking for a decision template so they can make thoughtful choices about how to lead with intention,” Richard explained.

He’s right, and when mindful leaders turn inward for guidance, they intuitively rediscover their own personal values. This process of rediscovering personal values is the first step in getting clarity. President Obama summed it up nicely in the second chapter of The Audacity of Hope:

"It is the language of values that people use to map their world. It is what can inspire them to take action… "

Personal values are the foundation for creating a values-driven corporate culture. Everyone knows how important it is to have the right people committed to the vision, strategy, and goals of the organization. In addition, a more subtle determinate of success is creating a culture of cooperation and collaboration wherein everyone in the company agrees on “how we do things around here.” This is the essence of an aligned corporate culture that is focused on success.

Companies with cultures based on positive values outperform their competition. They have greater retention of high performers who “fit” into the organization. They have better internal and external communication, more teamwork, greater employee and customer satisfaction, and higher productivity—all of which lead to increased profitability.

How to Destroy a Culture. If your culture is undermined—even by a just few employees in key positions—your company will most certainly face tough times. Today’s economic climate is difficult enough without having to deal with ineffective leadership and managers who look outward and blame others and external circumstances for poor performance rather than take responsibility for achieving the company’s goals. Now, more than ever, pulling together as a disciplined team is requisite for success.

Signs of a Dysfunctional Culture. Do any of these sound familiar?

• Old ways of working that are not results-oriented.


• Lack of accountability.


• When facing barriers to success, blame is externalized to circumstances (e.g., the economy) or others (someone else’s fault).


• Non-compliance with executive and senior management directives.


• A functional bias, not a business bias. Managers use narrow metrics to show performance in their areas without regard to overall corporate performance.


• A “not invented here” syndrome leading to an attitude of “I’ll do it myself.”


• A prevailing mindset of “I have nothing to learn from anyone unless they are a demonstrated superstar performer.”

These cultural artifacts are signs of a dysfunctional organization. If you don't pay attention to them now, you could have serious productivity and business performance problems in the long run.

Smart companies are regrouping in this tough business climate. They are committing to a set of core principles to cement organizational cohesiveness. They are preparing to meet today’s challenges and lay a foundation for the next upswing in the business cycle.

Here is a high-level outline of a proven approach for developing a values-driven culture that will align your workforce around a solid set of core principles, behaviors, and shared goals. These elements are the ingredients for a high-performing organization.

A Phased Approach to a Values-Driven Culture. This approach will align your executive team, management, and individual contributors across your entire workforce. It will provide the guiding principles and set expectations for how you want people to work toward achieving corporate, professional, and personal goals. Most important, it will establish a foundation for guiding positive actions at all levels in the organization, i.e., “The way we do things around here.”

Phase I engages the executive team and other influential employees to obtain buy-in for a culture change initiative. These leaders create and ratify the core values of the company with input from everyone in the organization.

Phase II engages key influencers at all levels in the organization to identify values-based behaviors that will be expected in the new culture. A corporate scorecard is also developed at this time to reinforce the appropriate on-the-job behaviors.

Phase III is a full-scale campaign rollout of the values and processes of the new corporate culture. Activities are designed to embed the new culture into all aspects of the regular business processes throughout the company, e.g., recruitment, hiring, reward & recognition, promotion, succession planning, strategic planning, etc.

Restructuring your corporate culture is a lot of work. But don’t forget: companies with values-driven cultures outperform their competition.

I welcome your comments.

Capturing Tacit Knowledge

It's not your father's knowledge management anymore. The concept of retaining and building an archive of knowledge in companies has been around for decades. It’s about capturing, maintaining, and sharing the best practices and wisdom in an organization to maintain continuity and build upon the learning that has taken place over time.

Here's the issue: When talented people in your organization leave—be it for another opportunity, retirement, or even death—before you've been able to capture the tacit knowledge resident in their brains, you’ve lost an asset that could be crippling to your business. Can we be more efficient and effective at knowledge management these days?

I was discussing this problem with Corey Olynik*, author of The Mentor’s Mentor, and he pointed out another trend that intensifies the problem: young people today plan on working for 6-8 companies during their careers. It’s no longer “IBM forever,” rather it’s “what I can learn here today to propel me into a better opportunity somewhere else?”

Knowledge Out the Door. The net result is that many companies are faced with people leaving the organization and taking their vast experience and knowledge with them. The company would be much better off if that know-how were captured and transferred to others in the organization before the knowledgeable employee leaves. If you can’t retain the people, be wise, and retain their tacit knowledge!

Here’s a related concern: What happens if your 45 year-old employee with 15 years of experience leaves and the only person you have to replace the one leaving is a 27 year-old with only two years of experience? The answer is this: the wisdom walks away right after the “thank-you-we-wish-you-all-the-best party” if you’ve not captured the senior person’s tacit knowledge.
Corey posed the challenge this way: “What if you could create a program where a 27 year-old with only two years of experience could function with the same wisdom and proficiency of the long-term 45 year-old? What if you could capture the knowledge of the experienced person and transfer that wisdom and functional capability into the younger employee? What would that do for the company?

By the way, this is not just a problem at the manager and senior leadership levels. This situation may even be worse when you lose the first-line delivery person on the shop floor—the one employee who understands how to keep the nail press running because of years maintaining and repairing the machine. That person may have an intimate understanding of the idiosyncrasies of the machine that goes well beyond the manual. We’re talking about critical information that cannot be reflected in a job description.

An Expanded Solution. Retaining the best employees is obviously one way to combat the problem of wisdom drain. One area to focus on, of course, is hiring people who
“fit” into your company. My continued recommendation is to have a clearly stated set of core values and a values-driven reward & recognition system to keep a like-minded workforce aligned. Realities, such as the trends mentioned above, however, suggest that no matter what we do to try to hire and retain the best people who will love working in our companies, attrition will still occur. So let’s deal with it.

Step 1: Use core values to select like-minded talent and build values-based reward systems to retain the best of the best.

Step 2: Engage your best and most productive seasoned employees as mentors to share their knowledge on a one-to-one basis with younger talent.

Step 3: Engage your mentors in group mentoring sessions to spread the wealth of knowledge among greater numbers of people in the organization.

Step 4: Use social networking and participative technologies to engage everyone in the organization—long-term and bright up-and-coming talent alike—to share their growing knowledge and experience.

The Key. The key to success with this multi-tiered mentoring approach is the medium for the transferring knowledge: use stories. Interesting, fun, even embarrassing stories can be an enormously effective way to transfer knowledge. The lessons coming out of the stories, the best practices, will evolve…and grow…especially when profiles and stories are shared via an internal community network.

Here’s the thesis: Values can help us to hire and retain the people who best fit into our companies. These values beget corporate habits. High-quality corporate habits yield best practices. Best practices can be readily transferred using lo-tech (mentoring) and hi-tech (participative technologies) story telling methods to capture and retain knowledge and know-how from all corners of your organization—even after the experienced story teller has “left the building.” (Thank you, Frasier.)

I welcome your comments.

*More about Corey Olynik: www.coreyolynik.com

What Does a Business Leader Do After a RIF?

Greg Robin and I had lunch this week and found ourselves discussing the stresses companies are under during this difficult economic period. Almost every company is feeling the pinch and many have suffered reductions in force (RIFs) or layoffs. American and worldwide statistics are staggering.

What does a business leader do after he or she has downsized or laid off employees? Two things: (1) attack other costs, and (2) focus on retaining and keeping your best people from getting discouraged.

Saving Money. If you want to contain costs, look at all of your processes and analyze them systematically with an eye toward streamlining—especially those processes that require data sharing. For example, if order taking data is accurately transferred to service delivery personnel, you will avoid costly errors in the field. Minimize errors with a collaborative data sharing process. Greg uses Quick Base, a web-based Intuit product, to enhance the efficiency of processes across the spectrum including accounting, project management, HR, order management, knowledge management, marketing and more. (See Greg’s Productivity Advisors).

Saving People. After a RIF, there is usually more work to be done with fewer people. Making sure they are secure, productive, and don’t burn out is essential. After a layoff, employees are nervous and concerned about when the next shoe is going to drop. That alone can lead to lower productivity as people lose focus and spend unnecessary time and energy singing “Woe is Me” and complaining about the company. Hopefully, you’ve retained the best and the brightest…but will you be able to keep them? Even in the worst of times, good people find opportunities—or opportunities come looking for them. Unwanted turnover (losing the best people) is very costly.

Here are some things you can do after a RIF.

--Communicate openly and honestly…over and over again. People appreciate accurate information. Rumors are deadly.

--Reaffirm your company values. Employees whose values match the company’s values are loyal, they like where they are, they work hard and stick around.

--Align your team by rewarding those who live the values of your company. Public recognition for collaborative actions (teamwork); getting things done on schedule as promised (integrity); sharing best practices (communication), for example, shows how much you appreciate values-based performance. A verbal pat on the back is a powerful motivator and costs nothing but your thoughtful attention.

Remember: the best employees stay in companies where their personal values match the values of the company where they work. In tough economic times it’s a good time to reaffirm your company’s values-driven corporate culture: the way we do things around here.

The Future of the Internet and When to Use Technology

Jonathan Rosenberg, SVP, Product Management, at Google, extended his thoughts about the future in a Google Blog recently (see Rosenberg Blog). He predicted four trends that will undoubtedly have tremendous impact on the way we think and communicate with one another:

(1) All the world's information will be accessible from the palm of every person
(2) Everyone can publish, and everyone will
(3) When data is (sic) abundant, intelligence will win
(4) The vast majority of computing will occur in the cloud

My colleague, Jim Kennedy (Partner, TechSpeak, San Francisco), and I were discussing the impact of these trends, and I was once again struck by the increasing importance of person-to-person interaction to deliver and receive information accurately as intended.

In today's world, for example, "email wars" can start at the drop of a keystroke when people hide behind the veil of technology. It's very easy to criticize, complain, or even insult someone with whom you may disagree via email. Making a hostile, destructive, crude, or hurtful comment via cyberspace is a lot easier if you don't have to deal with the consequences of the immediate feedback of a pained expression, reciprocal hostility, challenge to your argument, or a punch in the nose.

In today's corporate world, inappropriate use of technology can further a sense of isolation, create psychological distance, reduce team effectiveness and ultimately lower productivity and profitability. We've all witnessed companies where people are working in cubicles right next to each other, and yet they engage in email wars instead of simply standing up and talking to each other.

Corporate culture, "the way people do things around here," can grow like fungus in the dark if it is not created thoughtfully...and you may not like the behaviors that become part of the norm. Simple guidelines for communicating within a company, however, can establish productive and efficient habits. If communicating clearly, civility, productivity, and profitability are values you want to drive your corporate culture, here are a few guidelines for communicating effectively. These are based on this premise: the more intimate or complicated the message, the less you should use technology to deliver it.

(1) Use email (or other technologies) for communicating objective, unbiased information.
(2) Use the telephone when dialogue is required and when voice inflection and responsiveness can help to clarify the intent of the message.
(3) Get face-to -face if the communication has nuance or is important enough that serious negative consequences could result from misinterpretation.

As the Internet becomes even more ubiquitous, as Rosenberg suggests, and, as we are already witnessing with web-based social communities (Twitter, Facebook, LinkedIn and many others), the guidelines may need to be changed or adapted. But for now, the values of civility, efficiency, and clear communication, suggest that these simple guidelines can help to support an effective and positive corporate culture.

I welcome your thoughts.