Today’s working environment is global in scope, rife with uncertainty and lacking in long-term guarantees. In such a setting, company culture has been emphasized, whether to assuage employees and shareholders or provide a rallying point, a mission or a common set of business goals — and even as the difference between success and failure.

But what is culture, and what does “getting it right” mean?

Why emphasize culture, and if companies do value it, how should they act on that?

Who’s doing it right, and how?

I recently sought answers from Ryan Estis, a sought-after speaker and consultant who helps “companies, leaders and sellers more effectively connect to their two most important audiences: employees and customers” and recently published the white paper “Winning with Culture: How Leadership Drives Engagement & Performance.”

“Culture is the character of the organization”

The definition of culture depends on whom you talk with. I noted that the white paper opens with this overview: “Welcome to the new economy, where culture is the competitive advantage. People who enjoy and believe in what they do — and feel valued for doing it — invest more of themselves in their work.”

Estis distilled it further: “Culture is the character of the organization.” Again, what does that mean? For Estis, it’s not a matter of what system you’re using, or what client or consultant you have to measure or improve your company. Culture is more of a unique reflection of everything a company is doing and of its characteristics, not a static something you can point to or a generic checklist you can pass around.

“It’s the DNA of the company,” he says. “It’s how you work, what you value — there’s what a company does, right, and there’s what a company’s trying to accomplish, and there’s also the method by which you go about getting there. And I think culture informs all of those things.”

What happens when culture is ignored

Sometimes, the word “culture” can be downplayed, a synonym for “soft skills” or something human resources is in charge of communicating. But it’s larger than that, Estis says, particularly in a global business environment where everyone has access to the same information and tools.

Another way that culture is underappreciated is when large companies combine or when a company makes multiple purchases without much regard for how disparate cultures will co-exist.

Airlines are a great example: They make for difficult, costly mergers, with the following culture issues examined mostly as cost and financial problems: union contracts, customer service and perks, flight schedules, computer systems and operational attitudes. Even when culture is acknowledged, it’s too often after the fact, and as just a hurdle rather than a focal point.

Be proactive: As J. Robert Carleton and Claude Lineberry have noted with airlines and in general with mergers, there is a common misconception that cultural discord must simply be survived during mergers that does not bear out with the facts. As they wrote in 2004 about culture broadly:

“[C]orporate culture are real … they can be effectively managed, and that, if managed properly, they will also produce long-term economic performance that far outstrips the results of companies that do not manage their cultures.”

What makes managing culture during a M&A more difficult, Estis says, is that merging cultures is not easy. He says you almost have to create “a third culture,” which is a difficult, involved task that requires compromise and analysis. Too many companies don’t put in that work during a merger or acquisition — exactly when it’s most needed.

Talking about the mission statement

Let’s return to companies that do want to do culture, and want to do it better. Most companies have a statement that seeks to define what the business is about, what it intends to do and how it will do so. The question about these words, “whether a mission statement, vision or values,” Estis says, is not about having such a definition but about executing and embedding it.

The white paper found that only 41% of surveyed employees have confidence in senior management, with only 46% feeling they received sufficient communication. Clearly, there is a gap in the U.S. workforce between the lofty values and what the employees find to be the case (and what they are hearing from above).

A company’s values, or mission statement, or culture, Estis says, is really about “who gets hired, who gets rewarded, who gets promoted and who gets let go. And that really comes down to leadership, and being consistent, and holding people accountable — not only to what you accomplish, but how you get there.”

Companies should ask, “Are our values and mission understood and embraced internally?” If, as Estis has done, you asked a room of people how many had core values at their companies, many hands would be raised. If you offered those people a reward for being able to stand up and recite those values, you might end up rewarding no one.

Of course, some companies can’t communicate until they know what their values and purpose are. This may be because they are new or in turmoil, but it also applies to companies that have been acquired, merged or spun off.

One example of successfully building a mission statement is Red Hat. “They actually, in many respects, crowdsourced their mission statement,” Estis says. “They asked for employee opinion … they got input from all their employees and took that into consideration as they developed these things.” The lesson is to get together with your people, helping to align values with actions from the beginning.

Implementation, and the role of managers

Communication from the top down, through frontline managers and down to rank and file, is crucial if the desired culture has any chance of taking hold. It’s not just a matter of strong performance but also of retention and recruiting, Estis says.

One consistency among organizations that get culture right, he says, “is a desire to keep getting better.” Complacency is not an option.

Farm Credit has a highly rated company culture, with 92% of employees saying they are “fully engaged,” with eight years of strong performance and growth, but the CEO asked Estis during their last meeting, “You’ve been with us the whole day. I just want to know from your perspective, what else can I be doing to make us better?”

Managers can face a dual challenge of getting the right communication from their bosses, passing it on properly, and then handling and filtering feedback from their reports. It can be “caught-in-the-middle syndrome,” Estis says, but it’s really a great opportunity rather than a problem: “I think middle management can be a catalyst to create more open, transparent communications throughout a large, complex enterprise.”

Estis recently spent a day with AT&T, which is shifting its culture and focus from being a phone business to being a broader telecommunications service company. The communication challenges include scale, resistance from old-liners, etc. The key for managers, whether at AT&T or elsewhere, is transparency and listening, he says.

“I think part of being a great leader is being a great two-way communicator,” he says, and being consistent in your efforts in order to help your team aim at the same goals. Honesty and openness, too, can help ease the wound of bad news and help your team move beyond it. Whether it’s one-on-one meetings, town hall events, or other means, Estis says, employees are eager to communicate more and to be aware of the company’s performance and challenges.

However your company defines and implements culture, it’s going to be a primary way to win in this modern, global era. “We’re living in an open-source economy,” Estis says. “What becomes the differentiator or the competitive advance? I think culture increasingly is a catalyst to outpace, outperform the competition, grow, innovate, attract the best people, keep the best people, and win in business.”

Related Posts

Leave a Reply