Culture is the “hard stuff”

I’ll give it to you straight: Culture is one of the most misunderstood words and underestimated strategies in business and a lost opportunity for anyone who ignores its impact on performance, innovation and business growth. 

Having worked with company culture for over two decades, I have repeatedly witnessed astonishing effects on team and employee engagement, innovation, collaboration, and business results when companies and leaders start giving their culture the attention it deserves.

At the same time I have noticed that culture has gone from something only a few leaders talked about and knew what was some years ago, to something many leaders talk about – but still don't seem to know what is. 

There are many misconceptions, or myths, about culture, and they are holding business leaders back from achieving the results they could have, had they only understood the power of their culture.

Here is a small selection of Culture Myths:

Myth #1

Culture is about cookies in a jar, ping pong tables, feel-good activities, and the occasional Friday beer.

Wrong! Those are perks (and great to have). But they are not culture. 

Culture is about collective behaviours, habits and (usually) unwritten rules that determine how people act, communicate, collaborate, innovate, and get things done (or not).

Myth #2

Culture is ”the soft stuff” and has little to do with strategy, innovation and business performance. Wrong! So, so wrong. 

Culture is neither soft nor easy. Culture is "the hard stuff." It's about values, mindsets, behaviors, emotions; the stuff that scare the living daylight out of many leaders because they neither have the experience nor the skills in how to deal with it. But the bravest and wisest of them go there anyway, since they understand the enormous effect their culture has on team collaboration, innovation, growth, and bottom line results. 

Myth #3

Culture just "happens". It's not something we can influence or do anything about. We just have to accept what it is and deal with it. 

Wrong, again.

Cultures can be shaped, built, and changed. It takes time, conscious effort, and a clear strategy, starting from the top of the organisation and ultimately involving everyone, but it can be done. To let culture develop by chance and then hope for the best, is not a recommended strategy. Yet, that is what most companies and leaders do.

Myth #4

Culture can be delegated, outsourced, postponed, dealt with when we have budgets for it… maybe. 

The mother of all wrongs! 

Culture is not a delegate-able "initiative" that lives outside your core business, nor is it something you should start thinking about when times get better. Culture is HOW you get work done, it's how you conduct your business. It's how you communicate, collaborate, solve problems and deal with whatever situation you are in. It's about how leaders lead and what people do. And the brutal fact is that cultures tend to be shaped by the worst behaviors that are tolerated by its leaders.

Culture is the blood that runs through the veins of a company, it's the heartbeat of the organisation; its unique blueprint. The quality of the culture shines out of the eyes of the people who work there, it's what makes them want to get out of the bed in the morning – or not.

Culture is the strategy you should care most about if you're a leader who cares about the success of your business.

But don't just take my word for it. Let's look at some facts. 

The ROI of Culture

"Culture can account for 20–30% of the differential in corporate performance when compared with 'culturally unremarkable' competitors.” (Harvard Professor James Heskett, (The Culture Cycle). 

"Based on our research of over 1,000 organizations that encompass more than three million individuals, those with top quartile cultures (as measured by our (Organizational Health Index) post a return to shareholders 60 percent higher than median companies and 200 percent higher than those in the bottom quartile." (McKinsey & Company).

Companies with thriving work cultures can, in average, show for a 19% higher performance and 23% higher profitability, 50% higher retention, and significantly higher levels of creativity and innovation. (Gallup, State of the Global Workplace).

Just to mention a few.

Mind the Gap

Then we have the difference between what we say and what we do.

According to a recent global CEO study from Hendrick & Struggles, 82% of CEO's consider culture a priority. But when asked about their most important drivers of financial performance, only 26% named culture as one of their top three strategies. The companies that had CEOs with culture as a top strategy could show for financial performance (assessed by a three-year revenue CAGR) that was more than double than that of the other companies surveyed. 

In another study, done by PwC, 67% of executives said that culture is a high priority, but only 43% of their employees agreed. 65% of the executives said their culture was great, but only 41% agreed.

In a third study, conducted by Deloitte, 79% of executives say their culture is important to their business success, but only 35% say they know how to manage it effectively. 

So, What to Do?

Making culture a strategy for growth is one of the wisest business decisions you can make, and if you are like most leaders; positive to the concept but unsure about what to do about it, I’m here to help.

In my next newsletter I will share 3 steps you can take to make culture a conscious strategy for innovation and growth, along with a science-based, proven model that will guide you in how to build a thriving, high-performing company culture.  

And if you want to hear it from me personally, I am hosting a Live Webinar on September 28th, where I will take you through the 3 steps and the powerful model that will help you make your culture a strategy for innovation and growth. My team and I have helped hundreds of teams worldwide implement the process and the model I will share with you, and we've seen great successes follow as a consequence. And now you can learn how to do this too! At the end of the webinar I will have a Q&A where I will be happy to answer any questions you may have. You can sign up for the webinar here.

Also, should you happen to be in Oslo on November 7th, you are very welcome to join me for a full day in-person workshop on How to Make Culture a Strategy for Innovation and Growthin collaboration with Open Innovation Lab of Norway. We will have an engaging, interactive and fun day together, and you will walk away with some concrete tools and a roadmap you can start working with right away. You can sign up for the workshop here.

Warm welcome to webinar, workshop and to continue to follow my newsletters. I hope you will find them valuable and that they will inspire you to make your people a high priority and your culture a core strategy!