A winning culture is critical, but business leaders often leave their culture to chance.
In a recent report from Vistage, Creating a Conscious Culture, we present analysis of our survey of more than 1,500 CEOs and leaders of small and midsize businesses about their culture. While 63% told us they strongly agree that culture is critical to their company’s success, only 40% strongly agree that their company prioritizes developing and promoting their culture. Worse, only 11% of executives were satisfied with the strength of their own culture.
If business leaders know the importance of culture, why are so few satisfied?
Culture, like gravity, is a powerful, but unseen force. Unlike gravity, culture must be built and maintained, or it will naturally develop on its own. Business leaders who have a laissez-faire attitude toward culture often find their workplace hijacked by strong personalities, which can lead to a company divided by office politics and rumor mongering.
A good culture can’t be left to chance. Leaders must hone their mission, vision, purpose, and core values as foundational elements. Employees must feel like they’re part of something bigger than themselves.
To build a winning culture, business leaders must ensure these four components of culture are present.
Trust connects employees, giving them the freedom to focus on their goals and the community that allows them to collaborate. But trust starts at the top. Business leaders must lead by example.
To build trust, business leaders must:
- Be consistent in their behavior
- Have integrity in their decisions
- Be transparent by sharing data, as well as good and bad news
- Develop relationships with employees through repeated interactions
Every interaction business leaders have with employees will build or detract from trust. Executives must be mindful of their actions.
- Elements of Culture
Though we can’t see culture, we can describe its foundational elements.
Values define the qualities the company believes are most important. A good set of values are the company’s character, a way to remind employees how the company strives to work together.
Language shapes how we see the culture. Companies must have a well-defined mission, vision, and purpose, and be consistent in how they talk about them. Consistent language promotes cultural alignment across the company.
Communication influences the sense of connection and transparency felt across the company. If there’s no communication, employees will resort to rumors. Clear, consistent communication helps strengthen trust and reinforces belief in the culture.
Behaviors shape the norms in our businesses. How do leaders set expectations for the organization? For example, are they on time for meetings or frequently late? These seemingly small details set the tone for culture.
Rituals give us evidence of culture. How a business leader undertakes rituals—meetings, interactions, even celebrations—can reinforce or degrade culture.
- The Business
It’s critical for business leaders to bind their culture to the business’s strategy. This means having strong mission and vision statements.
A mission defines the goals of an organization, answering the question, “What do we do?” When a mission is clearly defined and understood, decision-making becomes easier across the organization.
Vision defines the direction of the company, both short and long-term, answering the question, “What do we aspire to do?” Vision looks to the future, giving business leaders ideas of what to plan for and work toward, as well as how to establish priorities and make important decisions.
- Powered by Purpose
A company’s purpose is bigger than the bottom line. For a winning culture, a purpose should connect belief, values, and social responsibility with business goals and objectives. Purpose is the “why?” that drives human behavior—it’s the backbone of every winning culture. A deep sense of purpose gives employees meaning and provides motivation beyond a paycheck.
Purpose-driven companies define their distinct reason for existing. They can answer the question, “Why do we do what we do?” The companies with the strongest purpose tend to have social, environmental, and financial goals, putting their business models in line with these objectives.
How Business Leaders Can Build Culture
Once business leaders know the traits of a winning culture, they can start building their company’s culture by:
- Making Culture a Priority. Is culture part of their daily work? It should be.
- Connecting your Culture to Metrics. Measure employee satisfaction or engagement to find out how they feel about the company’s culture. Look at other metrics like retention rates and percentage of new hires that are employee referrals as other indicators.
- Leading by Example. Are leaders setting a good example for the culture they want to cultivate? Are they consistently demonstrating the values?
- Articulating Mission, Vision, and Purpose. How business leaders define their company’s mission, vision, and purpose may be the difference between a weak and strong culture.
Joe Galvin is chief research officer for Vistage, the world’s largest CEO coaching and peer advisory organization for small and midsize businesses. In his role, he is responsible for providing Vistage members with most current, compelling and actionable thought leadership on the issues, topics and decisions of small and midsized business CEOs.