Creating a Culture is by Ray Miller.
Every company no matter what size develops some type of culture. The culture can be a productive one or, the culture can be a negative one. Whether you set out to create one or not your company develops a culture. That culture is the perception of employees who see and hear how things are done. Your culture is the summary of your environment, morale and management style. This article discusses what you can do to create the kind of culture which will move your company forward.
Jack Welch, the renowned CEO of GE, led the company through a massive reorganization in the early 1980’s. At the time the company was made up of countless product lines and diverse businesses. GE had to be slim, responsive, and innovative to remain a world leader in industry. Welch’s vision – reduce the company to a dozen or so specific product lines that were number one or two in their global markets. Do what GE does best or don’t do it at all. Achieving this would require extraordinary changes in structure, management, and operating philosophy. GE met the challenge, and today it continues to be recognized as one of the best-led companies in the world. During this transformation, Welch did something that few company leaders succeed at: he communicated passionately and convincingly the type of culture, or environment, that GE would need to dominate its competitors. Amazingly, he encapsulated it in a simple phrase:
SPEED, SIMPLICITY and SELF-CONFIDENCE
This phrase may have been simple, but it was loaded with Welch’s values, beliefs, and expectations of management and employees. To make this phrase mean something in the furthest recesses of the company, on the production shop floor, would require tremendous dedication and leadership. To appreciate the culture Welch envisioned for GE, you have to hear it in his own words. Here’s an excerpt from a speech he made in 1989. It’s rather long but well worth your time:
…How do we get big companies back to their roots – back to the type of spirit and fire that creates miracles in those garage start ups in Silicon Valley before they get big and before they forget what made them big? That’s what we’re talking about.
Our prescription, and we know there will be others, can be summed up in three words: speed, simplicity and self confidence.
Speed – in seeing what’s happening in the world, in anticipating it, in responding to it – is the essence. The ’90’s cry out for it.
We found in the ’80’s that as speed increases in an organization, reviews and measurements decrease. GE had constructed over the years a management apparatus that was right for its times – the toast of the business schools. This system produced meticulous, highly polished work. It did little harm in the early 70’s, became a growing handicap in the early ’80’s and it would have been a ticket to the boneyard in the ’90’s.
So we got rid of it – along with a lot of reports, meetings, and endless paper that flowed like lava from the upper levels of the Company. When we did this we began seeing people, who for years had spent half their time serving the system and the other half fighting it, suddenly come to life, making decisions in minutes – face to face – on matters that would have once produced months of staff gyrations and forests of paper.
We haven’t got all the answers by any means. We’re far from where we have to be.
Our transformation in the ’80’s was largely confined to upper management. In the 90’s it has to engulf and galvanize, it has to be in the blood of every single person in the Company.
We also found in the 80’s that becoming faster is tied to becoming simpler. Our businesses, most with tens of thousands of employees, will not respond to visions that have subparagraphs and footnotes.
If we’re not simple we can’t be fast – and if we’re not fast we can’t win.
Simplicity is a concept sneered at today in cultures that like their business concepts the way they like their wine – full of nuance, subtlety, complexity – hints of this and that. In the 90’s cultures like that will produce sophisticated decisions loaded with nuance and complexity that arrive at the station long after the train has gone.
The demand for simplicity applies to every one of us. To an engineer it’s a clean, functional design with fewer parts.
For manufacturing it means judging a process not by how sophisticated it is, but how understandable it is to those who must make it work.
In marketing it means clear messages and clean proposals to consumers and industrial customers.
And, most importantly, on an individual, interpersonal level it takes the form of plain speaking, directedness – honesty.
Simplicity is an indispensable element of a leader’s most important functions: projecting a vision – and demanding and rewarding boldness, speed, and passion. The leader’s unending responsibility must be to remove every detour, every barrier to ensure that vision is first clear and then real.
The leader must create an atmosphere in the organization where people feel not only free to, but obliged to demand clarity and purpose from their leaders. They must insist on the dignity that goes with achieving. They have to feel the rewards that go with winning – in the soul as well as in the wallet.
Defining this relationship, this bond throughout the company is a lot easier than making it real. But we believe the nexus between simplicity and speed is so important, so critical to winning in the 90’s – that GE has embarked on a decade long, company wide crusade to get it.
But just as surely as speed flows from simplicity, simplicity is grounded in self confidence. It takes enormous self confidence to be simple – particularly in large organizations. Self confidence does not grow in someone who is just another appendage on the bureaucracy, whose authority rests on little more than a title. Bureaucracy is terrified by speed and hates simplicity. It fosters defensiveness, intrigue, sometimes meanness. Those who are trapped in it are afraid to share, can’t be passionate, and – in the 90’s – won’t win.
But people who are freed from the confines of their box on the organizational chart, who have and have had the chance to dream, risk, and win, whose status truly rests on real-world achievement – those are the people who develop the self confidence to be simple, to share every bit of information available to them, to listen to those above, below, and around them and then move swiftly.
Obviously a company can’t distribute self confidence. What it can do, what we must do, is give each of our people that opportunity to dream, risk, and win and hence earn self confidence themselves. They don’t get that opportunity – they can’t taste winning – if they spend their days wandering in the muck of a self absorbed bureaucracy.
Speed. Simplicity. Self confidence. We can grow a work ethic that plays to our strengths, one that unleashes and liberates the awesome productive energy that we know resides in our work force. If we can let people see what they do counts, means something; if you and I and the business leadership of this country can have the self confidence to let people go – to create an environment where each man and woman who works in our companies can see a clear connection between what he or she does everyday, all day, winning and losing in the real world – we can become productive beyond our wildest dreams – certainly beyond the abilities of our international competitors, most of whom are hobbled by cultures that make it virtually impossible for them to liberate and empower their people…
The “culture” that Welch wanted was clear. He was able to articulate it and describe it in terms of expectations and benefits for all staff. But, before he could even consider communicating the type of culture necessary for GE to compete and win, he had a personal “vision.” He took the time to look forward and anticipate the changes facing GE. And from those visions he determined the type of work environment GE needed. Of course, the act of translating that vision into observable actions is a tremendous challenge, but it’s clear GE knew where it had to go and was set to chart a path to get there.
Why is this important? Every company no matter what size develops some type of culture. The culture can be a productive one – i.e. employees committed to customer service and quality, company wide commitment to being the best among its competitors, employees empowered to make decisions and identify improvements, company is passionate about providing new innovative products, etc. Or, the culture can be a negative one – little appreciation for employees, managing chaos, pervasive “that’s not my job” attitude. Whether you set out to create one your company develops a culture. That culture is the perception of employees who see and hear “how things are done.” Your culture is the summary of your environment, morale and management style.
You may think that company culture is a consideration for large companies only. The truth is, every company, no matter what size, needs the right culture to survive. Small companies who take the time to nurture that culture have a tremendous advantage over their competitors. Remember, what most large companies strive for is that “small company” mentality. As Microsoft continued to grow, Bill Gates wanted operating units kept to 250 employees at most. He’s been pretty successful if billions in net worth are any measure. Companies want to be lean, responsive, and unencumbered by channels of bureaucracy. They want to be daring and entrepreneurial. They want to tap the wealth of ideas and initiative in their staff – the things that are easier when you’re small.
Creating an effective company culture should be an unending process. Even if you believe you’re there, changes in your environment, competition, staffing and customer demands will challenge your culture.
Let me emphasize this point – whether or not you think your company has or needs a culture – one will develop. If you shape it correctly, it will become the driving force behind your success. Employees seek direction, they look for consistency in their work environment and they want to know what management values. In a nutshell they’re evaluating the culture
Three Key Elements For Creating Your Culture
When you hear the word culture, you typically think of some unique group of people in our society. The group is distinguishable from other groups by certain characteristics (or stereotypes). What does the group value and believe in? What is the common thread that links its members? It may have a strong religious doctrine or certain expectations about how people relate to one another. There are cultural differences in the roles of men and women.
Since a culture evolves, you must understand how it came to be in its current state in order to influence where it is going. That’s why an important part of maintaining a group’s culture is documenting its history. From cave walls to hieroglyphics to computer chips, man is obsessed with documenting history and culture. By documenting history, the group recognizes certain achievements. It communicates that history through ceremony, rituals and its elderly members. It has its own language and symbols to communicate its cultural expectations. It recognizes heroes as those who espouse the qualities that are consistent with its values and beliefs. Enduring cultures have a strong moral doctrine and discipline.
In any culture, all of these elements and more must be communicated, consistent, and reinforced. If these elements are not communicated, consistent, and reinforced, eventually the culture dies and is replaced by a new one. Think about it. Are companies any different?
We’re going to examine these general points: Communication, Consistency, and Reinforcement.
This should provide you with a canvas for painting your culture – or a foundation on which to build your vision.
Communication or “It starts at the top…”
Unless you are, or have the endorsement of the senior most executive in your organization, limit your attempt at influencing culture to your own department. The “culture” needs to be communicated, modeled and reinforced by senior management. They must lead by example. And as the excerpt from John Welch illustrates, executive management cannot be afraid to be passionate when talking about “culture.” It’s that type leadership that can ignite a company.
Don’t wait for a cultural mutiny to occur or for the changing of the guards to usher in a new organizational personality. If you have a vision for your department and really believe in it, then attend to your local culture. Just be sure it meshes with the culture described by senior management. What if it doesn’t?
Here’s an example.
The manager of a systems development team at a large bank prided himself on creating a team environment that was creative and entrepreneurial. His culture was one where team members were encouraged to offer creative, cutting edge computer applications. Risk taking was encouraged. Like most entrepreneurial “companies” they wanted to be quick and responsive. He reinforced the importance of “speed to market” for new applications. Inadvertently he had also reinforced a team culture that became lax in terms of internal protocol. As new applications were introduced in the bank, application teams were expected to go through a thorough (sometimes agonizing) change management process. The intent of the process was to anticipate possible disruptions to other systems and users so costly mistakes could be avoided.
Months later a new senior executive took the reigns for the technology division. That new senior executive considered change management the absolute crux of operational efficiency (he was right). Suddenly a team that paid little attention to the formalities of change management found itself under the microscope by a senior executive.
Culture Clash!
Consistency or ” Waiter…I didn’t order this…”
Whether or not you deliberately set out to create a culture, one will evolve. If you ask employees to describe their work environment they’ll likely look for consistencies (good or bad) that they think typify “the way things are done around here.” If there is little consistency, your company may have an “identity crisis” – but that’s your culture – chaos, territorialism, constant, seemingly aimless change, etc. Things appear to be done haphazardly with little forethought or planning. Change is a reaction not a product of the constant pursuit of a vision. Employees will spot inconsistencies in decisions and inequities in the way people are treated. Many companies suffer from this.
Reinforcements or “You reap what you sow….”
The culture that takes root is not necessarily the one communicated in mission statements, or the lofty words of executive management, but the one that ultimately gets reinforced. For instance you may want a culture where employees are innovative risk-takers. But what happens after an employee fails on a new project or novel idea he/she proposed and management doesn’t listen anymore. What happens when your CEO speaks passionately of the need for continuous improvement – but the minute those numbers dip – you’re on the hot seat.
The result? You won’t devote time to fix problems for fear that productivity will momentarily dip. The status quo is maintained. You may talk about the need for teamwork but your reward system only recognizes individual performance. Your CEO may want openness and candor at every level – but managers constantly “shoot the messenger” or dissenting members are viewed as non-team players.
Those are the key drivers of your culture – any business culture – Communication, Consistency and Reinforcements. Let’s look at Communication in more detail.
Communication
Communication is a key element in creating a culture. Executive leaders must ensure that what the organization values (priorities) and believes in is clear among all staff. While actions speak far louder than words, without words you cannot move people to action. Those words are the justification for implementing specific initiatives and making decisions that reinforce the defined culture.
Vision: What You’re Communicating
To create a culture, your executive management must have a vision of “what” the company could be, and “how” it can get there. Your vision may be to “become recognized as the national leader for quality widget production, customer service support and outstanding value.”
You plan to achieve that by decentralizing your organizational structure and driving decision making and ownership right down to your regional offices so that employees have full reign in dealing with their customers, solving problems and managing their work. It will involve massive reorganization of your management team, and Human Resource design and will require new attitudes and behaviors – but you have a target – something to move your organization toward.
Without that target and vision you cannot achieve consistency in your actions. Every function and every priority in your company must become aligned with that vision. Your vision now becomes the foundation of your culture.
How many times has your company unveiled a new mission statement? If you’re really large you may have a couple mission statements competing at once. Truth is your last mission statement probably didn’t sound all that different. Stick with a vision and implement it. Adapt it only as the marketplace demands.
Developing a vision is not itself difficult. Developing the plan to achieve that vision can be.
The Medium: How You Are Communicating
Executive Leadership
It should go without saying that executive leadership needs to communicate the desired culture to all staff. They should be so committed to their ideal that they can speak confidently and passionately to it. That vision should be so ingrained that your executives sound like broken records.
If you can not articulate your desired culture, can you really have a plan for creating one? Leaders must be the supreme role models of the culture they want to create. They will influence their direct reports – those managers in turn serve as models for their staff and so on.
Sounds easy on paper. Take the time to talk with your staff about the work culture you want to create and how it involves them. Devote time in your management meetings to address cultural issues. Tell staff what they should expect of you. Don’t wait until the once a year “state of the company” speech to remind them with a stale recital of the latest buzzwords.
Written Statements
Post or distribute to all staff a description of the culture that you want to promote. Make it visible. Refer to it when speaking. It should serve as a constant reminder to everyone of what your senior management has committed to. Some companies distribute a description of their values and beliefs on plaques to be hung in cubicles and offices. Others have them printed on glossy cards to be carried or framed.
The point is…formalize yours. It’s one tiny piece in creating your culture but it’s tangible. Make mention of your culture in your mission statement. “Culture” refers to the work environment, the work ethic you expect of employees at all levels, and the actions you take to achieve important values (values like customer service, quality products, financial return for investors, etc.). It refers to the important qualities of individuals who will make the company successful and achieve its mission.
Visible Signs
All around you there are visible signs of your company’s culture. They may suggest issues of equity such as prime parking spots for management or year-end bonuses for managers who did little more than show up and drink coffee. Your dress code may reflect aspects of your culture: Is it formal, business attire or is it up to the individual?
Take a look at employee cubicles. Do they hang cartoons or sayings that are generally positive or negative? Is your work environment clean, suggesting that people have a lot of pride in their work place? Work cleanliness is a key component of the Japanese attitude towards quality. It suggests discipline and respect in the workplace.
What’s hanging on your all-staff bulletin boards? Is there a hodge-podge of outdated material, or is it fresh and attractive? What does the material say? Is it dry policy and procedural stuff or is it recognizing accomplishments or reinforcing important values?
Imagine that a customer will come in and view your all-staff bulletin board as an indicator of “how your company functions and what’s important.” What do you want it to say? Look around your environment and see what it says about your culture.
What’s Your History?
Just as a society or group of people needs to have a history, so must companies reflect upon their past. What has contributed to the success or lack of success for your company? Are there certain dates that you celebrate annually like the awarding of a significant contract, the founding of the company, etc.?
Do you recognize certain professional societies like National Health Care Quality Week, Secretaries Day, etc.? Do you have these annual mileposts that become recognized as part of your history? Some companies actually have an employee or a team of employees who serve as corporate historians. They document the “historical achievements and evolution” of the company and share it with staff.
Less formally, do some probing in your operations and service areas. Ask for documentation on policies and procedures. Are flowcharts available that describe the inner workings of your departments? Are training materials updated? All of these are ways of documenting your history and current state.
Veteran Staff
In “Indiana Jones: Raiders of the Lost Ark,” Harrison Ford (Indiana) brings that mystical head piece to a shriveled, white-haired, older-than-dirt, ancient guy who knows the long forgotten language needed to interpret its engravings. The old guy refers to a dust covered, weathered book and unravels its message.
The point is, companies need to have veteran staff who can pass down stories of company accomplishments and heroes, and teach newcomers how things are done. Without them you really can’t develop a culture. Companies with high turnover face a tremendous identity crisis. Take advantage of the knowledge and experience these folks have to offer.
Let them train new staff, let them represent your departments in cross-functional projects, ask them to write up background information for your orientation program, etc. Again, if you don’t know where you’ve come from it’s difficult to avoid similar mistakes when trying to create a desired culture.
Management Taking Stands
This is a powerful mechanism for communicating cultural values and beliefs. Here’s an example:
A new CEO of a Fortune 500 manufacturing company called together his executive staff. During their staff meetings each executive was to be given an hour to talk about quality initiatives in his/her function. The first executive went and was done in about 10 minutes. For the remaining 50 minutes the group sat there in uncomfortable silence. The CEO refused to continue. You can bet the executives began to take his emphasis on quality more seriously.
That same company went on to win the Malcolm Baldrige Award. I was told of an executive at a mammoth telecommunications company who took over responsibility for a particular business line. His first order of business was to call a meeting with his key management where he tossed volumes of documented policies and procedures in a trash can. He then replaced them with a one page description of the important values and beliefs that he felt would make the division efficient and profitable again. The division went on to become the “crown jewel” of that business line.
Emotional stands by key executives send a powerful message to staff. They catch our attention and spark our imagination.
In the example earlier of the senior executive devoted to change management, that executive personally contacted a manager (multiple levels below him) who side stepped that change process and inadvertently affected an internal customer. He told him next time that occurred he’d personally see to having the manager removed
Next, let’s look at Reinforcement in more detail. Reinforcement includes specific actions you can take to recognize the positive attributes of your culture and to curtail the destructive aspects of it.
Reinforcements
The most important question to address here is; how do you reinforce actions or behaviors consistent with the culture you’re trying to create?
Model them
The most obvious way to reinforce the culture you’re trying to create is to model it. If you want employees to be respectful of one another you need to exemplify respect for all of them. If you want an environment that thrives on innovation and creativity you need to lead the charge in breaking out of old paradigms. You have to sanction the ideas of others and tell them to run with it rather than send them off to a paper bound, bureaucratic committee where the idea stagnates for months. Employees will emulate your style of management.
Human Resources
Do your Human Resource initiatives support the type of culture you want to create? For instance, is there reference to it in your orientation process? If you want employees to be responsible for improving the quality of their work, are they trained in how to solve problems? Do they know how to channel suggestions or ideas for improvement to the appropriate parties (Training)?
Are the values important to your culture recognized in your performance evaluation system? For example, if teamwork is important, how is it observed and evaluated? Does your Reward and Recognition program focus on areas consistent with your desired culture? When employees truly demonstrate the qualities you believe are necessary in the culture you’ve created, are they typically ones that see their careers moving? You should conduct a complete assessment of your HR practices to see if and how they reinforce your ideal culture.
Management Training
The actions of management will be “the” major factor in shaping the culture that evolves in your company. Many believe the executive management team of every company has a “personality.” That personality then trickles down through your environment. That personality (hopefully a positive one) shapes a desired culture defined by executive management.
All levels of managers should be trained on their role in supporting that culture. They must model the values of the company – whether they be teamwork, respect for individuals, creativity, initiative, etc. They must also know their responsibility for reinforcing employee behaviors and actions consistent with those values.
This may sound too touchy feely for some. But that’s the challenge of shaping your culture. You need to translate those soft values into observable actions and behaviors. Only then can employees see and live the culture you desire.
Corporate Heroes
We’ve all heard of them. The employees that went above and beyond the call of duty. Maybe it was an incredible customer service deed or an innovative idea that enhanced quality, whatever the case, they’re recognized by the company and stories abound. As time goes on, their feat is passed on to others around the water cooler (Each time with a little embellishment probably).
The point is they’ve provided an extreme example of something that the company values and admires. It says a lot about the culture.
Next, let’s look at Consistency in Purpose in more detail. Consistency in Purpose includes specific actions you can take that illustrate the values and priorities of your business and business culture.
Consistency in Purpose
How do you ensure that your company’s actions are consistent with the values defined by your culture? Though similar in some respects, this is different from ‘reinforcements’. Reinforcements are initiatives to recognize or reward the desired behaviors of your culture. They’re reactive. Consistency in Purpose is proactive. These actions help build your culture by creating a consistent expectation about “the way things are done.”
Culture of the Month Program
One of the worst things you could do to undermine your culture is to toss out last year’s cultural statement for a “new improved” version. Unless you completely missed the mark or real market demands require it, changing your position will only confuse the masses. If you didn’t achieve your desired culture it’s not the words – it’s the implementation that failed. Stick to it. Show a long-term commitment to your vision.
Language
It seems obvious, but perhaps the distinguishing characteristic of most cultures is their language. Ones that immediately come to mind may be English, Spanish, French and so forth. But there are also the more subtle colloquial differences (Northeast US compared to Southeast US). There can be other types of cultural differences. Just ask any parent who’s tried to decipher the slang of their teenager.
In communicating the important values of your culture you have to use consistent language. How many times have you seen the same effort or initiative attempted – and all that’s really changed is the acronym or name of the project?
Every time the title changes – participants change, objectives change, diagrams and flowcharts change – it’s like starting all over again. By starting over you’ve lost your history and the chance to learn from your mistakes. There’s no consistency.
If employee empowerment is an important value, you cannot call it empowerment one time, participative management then involvement another. You can’t refer to quality improvement teams as QI Teams in one setting then Employee Involvement Teams in another, etc. If you’re using a certain management method or training when you refer to particular management skills, use consistent terminology (i.e. Adaptive Leadership, Managing Change, Customer Focus-Leadership, etc.) to reinforce the skill among your managers.
Management Process
How do you go about conducting meetings? How do you go about solving problems? How do you escalate issues to the attention of management? How do you develop plans for all your departments that are supportive of your overall strategic plan? How do you manage projects?
Some may say “What do you mean? We just do it.” When things just sort of ‘happen’ it’s difficult to perceive a consistent, predictable management process.
We spend a lot of time designing and engineering our workflows and systems, but how much attention do we give our management process? To make your process consistent, you should have a standard meeting format, a structured process for solving process problems, and a process for developing a strategic plan and cascading it down through all your functions.
While these practices may sound regimented, they’re really just more efficient. You can still be innovative, flexible and responsive without flying by the seat of your pants. As for your culture, these practices will become recognized as “the way we do things around here.”
Strategic Planning
It is amazing how many companies (large and small) do not have a strategic plan. A strategic plan is paramount to the long term survival of any company. The operational and financial benefits aside, let’s look at it from a cultural standpoint. To maintain consistency in your management process, you have to be working towards something. Strategic Planning allows you to align your efforts with the requirements of your customers and culture.
Without that target, or that vision of what your company could be in 2, 5, or 10 years, you can’t direct all your efforts toward anything. You operate by solving day-to-day problems. Every culture must have a sense of purpose and direction.
Equity
Employees seek equity and justice in their work environment. Preferential treatment, favoritism and inconsistent HR practices will immediately define your culture for you (and a bad one at that). The following scenario may sound familiar:
Like many companies, company X goes through a downsizing. Executive management told staff they had to tighten their belts because competition was stiff. Along with the downsizing came an announcement that there would be no merit increases that year, or promotions for staff and management. Two weeks later a Senior Vice President sends out a memo saying that he was delighted to announce the promotion of so-and-so to Vice President. You can imagine what the reaction was. How merit increases are awarded, how promotions are granted, the way your HR policies are executed says a lot (and vice versa) about consistency in your work environment.
Note: It cannot be stressed enough how important the perception of equity is to morale and motivation, productivity and your culture.
Putting It all Together
Let’s put it altogether now. How can you create the type of culture that will really propel your department or company to unexpected levels of service and productivity?
Assessing your present culture is an excellent place to start if you want to move towards a desired one. Because business settings are different, one generic approach is not advisable. However, invaluable information can be gained from surveys and focus groups (both are usually conducted by an objective outsider). Surveys and the objective of the focus groups are typically reviewed with management first, then a formal assessment completed. The process can take from 2 weeks to 2 months depending on the size of the company.
Planning the type of culture you want to create may seem overwhelming, but if you take a step by step approach to it you’ll be surprised at how quickly the plan comes together. Consider the following questions:
- Based on your strategic plan or vision where do you see your company in 2, 5, and 10 years?
- What products and services will you offer?
- How will your customers differentiate you from your competitors?
- Regarding your employees, what skills and attributes will they need to successfully achieve your vision? (In other words, describe the ultimate employee (management and non management).
- Regarding your work environment what will your company value most? (Your values and beliefs). Consider case studies or stories of especially effective organizations. Better yet, visit them and benchmark the process that shaped their culture.
- Most importantly, how will you apply the concepts of communication, reinforcement and consistency in purpose to build that culture?
Ray Miller is Managing Partner of The Training Bank, a Training and Consulting firm specializing in Customer Focus, Service Improvement, Leadership and fully customized training solutions. He is also author of the book That’s Customer Focus, and the Management Training by the Book series.