The Lifeblood of Any Organization: Its Culture — August 2024

Ever heard the story about the customer who brought four tires to a Nordstrom Customer Service counter to return them?  As the legend goes, although Nordstrom doesn’t sell tires, the employee processed a refund anyway.  Talk about a culture that 1) is highly customer focused, and also 2) completely trusts and empowers its people to move mountains on behalf of a customer!

Some organizations and businesses just “feel” different when you walk into them.  As with the Nordstrom story, maybe it’s a strong sense of customer service. Or maybe there is a strong feeling of safety. Or maybe there is a feeling of fun, laughter, and collegiality with the employee team.  An organization’s lifeblood its culture — it’s the “connective glue” that gives an organization personality and influences behavior regarding how things get done, how decisions are made, and how people are treated.  And while culture can feel a little abstract — you “know it when you see it” — it can (and should) be deliberately created, nurtured, reinforced, and sustained.

Last week a PEN member forwarded to me a recent article from Forbes on three things leaders can do to create a high performance culture (3 Top CEOs Share The Culture Formula for High Performance).  It is a great, quick read on how the CEOs of Voya Financial, BTS, and Xerox — in the words of the article’s author, Robert Reiss — merged high performance with human-centricity.  Coincidentally, just two days later, PEN hosted a workshop on better leadership, better collaboration, and better communication. Although he had not read the Forbes article, the workshop facilitator explored roughly the same three drivers of high performance.  The convergence of insights from the article and the workshop gave rise to this month’s article!

As defined in the Baldrige Framework, culture is the shared beliefs, norms, and values that characterize an organization’s workforce.  In high performing organizations, senior leaders create and reinforce culture based on the organization’s mission, vision, and values.  As a result, an organization’s culture can (and should) be deliberately shaped by its leadership, not the product of accident or happenstance.  Why?  In the article, Reiss reminds us of Peter Drucker’s famous adage: “Culture eats strategy for breakfast” — meaning that how your workers engage with each other and the organization itself (more than just about any other driver, including strategy) will determine how the organization performs.

So how can leaders build an exceptional (and desired) culture?  When you intersect the Forbes article and the PEN workshop (and mix in a little of my own perspective), here are five ways…

Engage the entire organization in strategy and purpose.  Years ago, many leaders thought that it was their role (and only their role) to create strategy: they’d go off to their planning retreat on the lake, and presumably after a few puffs of smoke, they’d come back with the direction the company should head.  But today more successful leaders from higher performing organizations now realize that better strategy comes from the collective perspective of their whole team: the diversity in thinking, perspectives, and insights — derived from getting input from all levels of workers with all types of roles and backgrounds — results in better information, better ideas, better knowledge about the organization and the environment in which it operates.  In addition, if employees are involved in shaping strategy, they are more likely to buy into the execution of it — they have higher enthusiasm and, as Reiss says, some “skin in the game” in co-creating the organization’s future.  So, as leaders, find ways to involve and include your team: conduct focus groups or town hall meetings; get their input with surveys; or invite them directly into the planning exercise to consider scenarios, weigh options, and select focus areas.  With your team’s involvement, the plan itself will be stronger, and their buy-in to the plan’s execution greater.  Outside of strategy, the culture, too, will be more inclusive.

Make it safe to fail — and fail fast.  Successful organizations take calculated risks — sometimes new ideas work, and sometimes they fail.  But failure is a part of success: it can lead to learning, innovation, improvement, and optimization of how the organization is run.  Creating an environment where employees are allowed — and indeed, encouraged — to experiment, to take risks, and to try new things reduces fear, leads to creative problem solving, and almost always leads to better results.  As Reiss says, the worst thing leaders can do is to allow the organization to repeat the same mistakes over and over again, never learning or shifting their thinking or approach.  High performing organizations celebrate risk taking; they celebrate courageous acts; they celebrate failure without retribution.  High performing organizations embrace learning.  Which brings me to…

Embed a culture of continuous learning.  While failure can lead to learning, success can too!  High performing organizations are committed to learning and growth — both for those who work there, as well as the organization itself.  Learning can lead to innovation, continuous improvement, systematic problem solving, rapid response, agility, and resilience.  It is achieved through research and development, evaluation and improvement cycles, ideas from workers or other stakeholders, benchmarking other organizations, and/or sharing, adapting, and expanding upon proven best practices. So run simulations; conduct experiments; routinely evaluate current processes to identify ways to improve them; study other high performing organizations to identify new ways of doing things.  While failure can (reactively) lead to learning, learning should be embedded in the way your organization operates — a proactive curiosity for how things work (and how they could work better).

Create a culture that values people and diversity.  According to the Baldrige Framework, an organization’s success depends on having an engaged workforce that benefits from meaningful work, clear organizational direction, and accountability.  To thrive, the workforce should also have a safe, trusting, and cooperative work environment.  Successful organizations are inclusive — they respect and value differences among workforce members (and “differences” are broadly defined, including diverse backgrounds, characteristics, knowledge, skills, creativity, and motivations), realizing that diversity leads to better collective decision-making, better collaborative problem solving, and better connection with customers and the marketplace.  High performance cultures also value kindness, civility, empowerment, and even empathy — which all help to build meaningful relationships between team members.  In fact, the higher performing cultures are fun — they emphasize play, laughter, and getting to know teammates personally.  That could mean out-of-office (genuine, not transactional) team-building experiences; it could also mean just taking 5 minutes at the beginning of staff meetings to do a round-robin to check-in to see how everyone is doing personally.

Focus on action.  High performing organizations focus on accountability: leaders from high performing organizations set high expectations, and then hold themselves and their team to them.  High performing organizations create momentum, realizing that progress is more important than perfection — they create strategic and action plans, goals (ideally “stretch” goals that are achievable and realistic but that require some effort), and they constantly measure progress and adjust as needed.  High performing cultures are agile and resilient — they pivot as circumstances change, and in fact, are comfortable with change and ambiguity.  They are transparent and foster a culture that is characterized by open communication (including genuine listening) and empowerment, truly allowing employees to take ownership of their work and the organization’s outcomes (remember the Nordstrom example!).  In high performing cultures, complacency is the enemy of continuous improvement.

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Those are the cultural characteristics that seem to be universally true for high performing organizations.  But your culture may also include other factors, such as a high growth mindset; being innovative or entrepreneurial; being civic minded; being scientific, having a focus on data or managing by fact; having a focus on service or deep customer relationships; or any number of other elements.  The key is to:

1) be thoughtful about what type of culture you want your organization (or department or team) to have;

2) capture that culture in your organization’s foundational statements (such as mission, vision, core values) — after all, culture is rooted in an organization’s language; and

3) embed cultural concepts into systems and processes so that it manifests itself in how the organization operates.

On the latter, think of processes such as recruiting & hiring; onboarding and training; performance management, rewards and recognition; strategic planning; organizational scorecard or measurement systems; communication processes; or any other number of systems that perpetuate and reinforce aspects of culture that are important to the organization.  The goal is not assimilation (as the saying goes, don’t hire for diversity but then work for assimilation!).  Rather, the goal is harmony — a workforce that represents a pronounced culture, and a culture that reflects its workforce.

Your organization’s culture shouldn’t be left to chance. Rather, it should be the result of thoughtful, deliberate actions taken by leadership to capture the beliefs, norms, and values that make your organization unique — a place where employees want to work and a place where customers want to engage.  In other words, culture should be created and sustained through — wait for it — process!  It is reflected in what gets rewarded; it is embedded in norms, rituals, and operating practices; it is captured in the organization’s foundational statements (mission, vision, and certainly core values); and, as in the case of the Nordstrom tires, it is oftentimes conveyed through organizational stories — stories that inform, persuade, and/or educate employees and other stakeholders as to organizational beliefs, what is valued as important, and “how we do things around here.”

Are your organization’s decisions, actions, processes, and stories consistent with your (desired) culture?  If not, maybe work to bring them in line.  After all, a solid culture beats a solid strategy all the time.

What other insights do you have regarding the power of culture?  Participate in a discussion on this topic: visit our LinkedIn group to post a comment (and follow me on Twitter @LassiterBrian!).

Never stop improving!

Brian S. Lassiter

President, Performance Excellence Network

www.performanceexcellencenetwork.org

http://twitter.com/LassiterBrian

A Catalyst for Success Since 1987!

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