By Sam Gerace
As a CEO, one of the most frequent question I am asked is: “You been able to launch grow and sell four companies – what is the secret sauce?”
The question comes in many forms: “What should I do to improve performance now?” “How can I make sure our company sustains itself over the long term?”
“I’m starting a new company, what should do?”
It is really the same question – “What is the most important thing I should do?” My answer is always same: Begin with culture.
I think most people expect answers about innovation, or process, or investment, or talent. But the reality is that if people, resources, and processes are not aligned and moving the organization in the same direction, they generate no net value. We have all seen sports teams with high-profile, skilled individual players, successful coaches, and supportive owners who fail to compete. It isn’t that they lack the talent and resources, but that the individuals and small units within the larger team are not aligned. Culture is the unifying and aligning force that underpins organizational success.
Culture – What is it?
All organizations have a culture. Some are good, some are bad, but most…just happen. Most leaders treat the word “culture” like Fine Art – difficult to define, but you know it when you see it. But words matter, especially in human cognition, and failing to associate a specific definition of culture strips organizational leaders of the ability to manage the most important factor in organizational success over the long term. So what is culture?
I should note that I’m talking about “Culture” with capital C –a specific and well-defined tool for organizational leaders. There are so many common definitions of “culture” that before we define what it IS, we should start with what it is NOT. Culture is not intangible or fluffy. It is not a “vibe” or the office decor. And it most certainly is not set of inspirational posters or motivational phrases.
Culture IS the set of values we share, and the behaviors and environment that support them.
A thoughtfully and intentionally crafted culture is the foundation that underpins everything we do. It is the single most important driver of my companies’ long-term success.
The Secret of Culture – Why It Works
The biggest loss of efficiency in organizations comes from a lack of ability to make effective decisions quickly, and lack of a unified culture is a primary cause. At its core, culture provides a conscious and subconscious framework for decision-making, both for individuals and working teams. Studies from the US and Europe show that an aligned and articulated culture empowers team members to act quickly, reduces the number of conscious decisions, and increases the speed and quality of the decision process. The net result is that teams are more efficient, more innovative, work with greater velocity, and have materially more time for productive work.
A well-articulated and managed culture narrows the universe of acceptable outcomes and eliminates persistent sources of delay in the process.
- eliminates options that are inconsistent with the company’s cultural values
- prioritizes the remaining options in accordance with those values
- gives team members the confidence to act within their authority
- streamlines decision processes with preferred behaviors
Why Does Culture Matter?
Why does culture matter? Consider this – cultural alignment is the best predictor of high performing teams, and it is the best predictor for an individual’s longevity with an organization. Aligned cultures result in:
- Faster growth
- More sustainable growth
- Increased team member engagement
- Increased productivity
- Increased team member retention
How to Begin Building an Effective Culture
- Collaboratively generate a list of values
- Combine related specific values into more general value statements
- Select the 3-5 most important values and work on the articulation until it is completely authentic
- Identify key behaviors that support those values
- Identify aspects of the environment that support the behaviors
- Collaboratively working on the right words to define or articulate something causes all of the participants to share with one another their own beliefs, values, and understandings
- Collaboratively working on the final articulation – choosing the right words together – is a process for the members of a team to develop a common frame of reference for the culture.
- The knowledge that great care was taken to select the right words lends importance to the subject of those words even if the reader was not one of the collaborators.
To be impactful, a culture must be embedded as the foundation of all material organizational activities. After articulating your culture, design the key organizational processes with culture at the core:
- Strategic and tactical prioritization
- Goal setting
- Team member recognition
- Performance evaluation
In today’s fast-paced and ever changing business world, there is so much competition that it can be difficult for even the hardest working companies to succeed. There is a litany of things that can go wrong in any company – no matter if they’re a startup to established enterprise – but so many of those issues are actually culture issues and can be addressed with an aligned culture. It’s time for companies to put culture first so they can succeed in the 21st century.
Sam Gerace is the founder and CEO of Convey.