“Our number one priority is company culture and our whole belief is that, if we get the culture right, then most of the other stuff like delivering great service or building a long term endearing brand will just happen naturally on its own.”
– Tony Hsieh, CEO of Zappos
If there is truly a siren song among CEOs today it surely must revolve around one theme: organizational culture.
The lyrics go something like this: Fix it. Change it. Improve it. Strengthen it. Just don’t lament it.
Why is culture so important to CEOs and more importantly the entire business? Because Culture is everything. Culture dictates behavior. Culture encourages collaboration and sharing. Culture is community. Culture identifies one with the purpose and belief of the entity. Culture is a frame of reference, a center of gravity for people to make sense out of everything the organization says and does.
Beyond norms, values and principles, Culture either breeds innovation or stagnation. Openness and candor or myopia. Success or sabotage. Confidence or cynicism.
Most importantly, Culture outlives people including CEOs and Boards.
No business strategy – no matter how well planned and designed – will be effective if it’s not compatible with Culture.
“Let’s take what we are good at and rethink it. That’s not a side project. That is the very company itself…Until we really change culturally, no renewal happens.”
– Satya Nadella, CEO of MICROSOFT
So how does one go about transforming culture if it’s so ingrained?
It starts with one critical question – Is the planned strategy (and CEO priorities) compatible with the current Culture?
If yes, then no real change is needed. If no, then a series of actions need to be enacted in order to ensure success.
So, how can a CEO change or shift the Culture to gain the future? Try the following…
- Discern the operative Culture type for the organzation (i.e., accountability) – What does the organization’s culture need to be in order successfully carry out strategic imperatives? If it needs to be more accountable, then a new set of modifications need to be introduced addressing structure, training, reward, hiring, etc.
- Revise or reiterate the Values – Are they reflective of what is needed? Do they command attention and respect? If not, introduce values that do.
- Rethink the Consequence – What do organizations lack the most in changing culture? Consequence. What happens when somebody doesn’t act or behave according to norms? Rethink the consequence and regain the leverage.
- Infuse new thinking, behaviors (new people) into the system – Change people, change culture is how the saying goes. The CEO is the best example of this as every new CEO has the ability and attention of the enterprise to change course. To hold new thinking and perspectives valuable and to place a different scorecard on achievement.
- Change the conversation and be provocative – The most powerful tool a CEO has at his/her disposal is communication. Communication is crucial to effectively changing culture. Communication is defined as “everything a company says and does” including the CEO and leadership team. To move people to another reality internally, the CEO must translate strategy into story and open up new chapters of interaction and converation among the workforce. Doing so, encourages dialogue, discussion and debate reflecting the new cultural norm. To be heard, though, means a CEO needs to be provocative. Our research indicates that employees want more “real” exchange from leadership instead of cheerleading. As such, to get and keep people’s attention, CEO’s should focus on industry intelligence, issues, vulnerabilities, societal impact, competitive differentiation, etc.
- Flank the Detractors – In any culture shift, there will be pockets of resistance. Smart CEOs employ a flanking maneuver where they work the edges and periphery of the culture engaging new perspectives and voices that over time diminish the denigrators.
- Ride the Social Wave (increase employee advocacy) – Today, 69% of US employees are actively disengaged (Gallup, 2012) and only 37% of employees understand their company’s vision (Stephen Covey, The 8th Habit). Given these sobering statistics, improving collaboration & communication while connecting real-world employee networks online via social communities is essential in building advocacy & word of mouth – empowering employees to amplify company messages and highlight team wins across their personal social media networks. Doing so, drives credibility & influencer relations by establishing internal experts externally as active thought leaders around key company topics.
- Make it Important – The one requirement for CEOs in driving culture change is to make the entire undertaking Important! This begins as GM CEO Mary Barra states below, by recalibrating one’s own style and behavior model to reflect the type of culture necessary to effectively succeed in the marketplace.
“I kind of hate when we talk about culture.” What is culture? It’s how people behave. So if we want to change this elusive culture, it’s changing behaviors. And that becomes actionable very quickly. It’s everyone’s behaviors. It’s mine—I have to change my behaviors. It’s every interaction I have with the leadership team. It’s every time I interact with employees, being crystal clear about my expectations. And frankly, you know, that’s somewhat different than maybe General Motors has been in the past.”
– Mary Barra, CEO, General Motors
At its most clinical description – an amalgamation of expectations, values, and truths that guide attitudes and behaviors that are passed from one generation of employees to another and therefore become ingrained in the enterprise – is often viewed as a necessary evil, so to speak, an organizational reality.
In a social and digital environment where everyone has a voice and competition is akin to three dimensional chess, Culture is either a CEO’s asset or enemy. Undoing cultural norms and supplementing outdated beliefs and habits can arguably be the number one priority of the modern CEO.
If not, then a CEO’s strategy and all of its components – innovation, product supremacy, and customer intensity – will never have the opportunity to flourish.