A More Powerful Way To Shape Your Company’s Culture For Growth
Listen to Episode 124:
Episode 124 Transcript:
This episode is brought to you by Business Advancement Incorporated – enabling successful leaders and companies to accelerate to their next level of success. On the web at BusinessAdvance.com. And now, here’s Pam and Scott.
Pam Harper: Thanks, Chris. I’m Pam Harper, Founding Partner and CEO of Business Advancement Incorporated. And right across from me, as always, is my business partner and husband, Scott Harper. Hi, Scott.
Scott Harper: Hi Pam. And as always, it’s quite a pleasure to join you for another episode of Growth Igniters® Radio. And as always, our purpose is to spark new insights, inspiration and immediately useful ideas for visionary leaders to accelerate themselves − and their companies − to their next level of growth and success.
So Pam, recently we’ve seen a spike in news about corporate culture. Now, some of this is bad news − companies with toxic cultures that have come to bite them. But you know there’s good news as well.
Pam Harper: That’s right. On October 4th the National Association of Corporate Directors released a report of the NACD blue ribbon commission on culture as a corporate asset. This calls on boards of directors to take a proactive approach to cultural oversight, since culture impacts company results of all kinds. For instance, not only top and bottom line results but also reputation and the ability to attract and retain talent. And of course, even more.
Scott Harper: Oh sure. Now Pam, let’s call the elephant in the room. Culture, and thinking about culture − it isn’t new. We’ve been talking about it for years, and you have been studying and writing about culture for over two decades. We’ve even done studies on corporate culture, and how it’s linked to business performance. So why now? Why this focus of the NACD on culture. What’s that all about?
Pam Harper: Well you’re right. It’s nothing new. What I see is a reframing. So now we’re looking at culture as something that’s not a problem, but in fact, this is the key to what it takes to be competitive. Specifically, the NACD was looking at how culture impacts company results, as we were talking about. If we’re going to grow our companies and go into uncharted territory, we have to be thinking about how the culture that we, have today is going to need to adapt to the company that we’re going to become tomorrow.
Scott Harper: Sure. Because obviously, the business environment is constantly changing. Consumer expectations are changing, new technology to meet those expectations, new competitors. So it’s always changing, and you’re right − culture should change to adapt and support whatever has to happen as we grow and evolve. Now, we’ve seen over the years that some leaders are really good at this. They do it almost automatically. But others see culture as kind of a squishy mystery. It’s hard to get their arms around it. “You know, I know cultures are important, but how can I do that without getting distracted?” In fact, we did a study a few years ago that spoke exactly to that point.
Pam Harper: That’s right. We asked CEOs of successful middle market companies, that is companies with revenues between $5 million and $500 million annually, about what it would take for them to foster a culture of growth in their companies.
Scott Harper: Pretty straightforward…
Pam Harper: Yes. These executives universally agreed that culture was important for business success and profitability. They saw that. But here’s the thing − they said that although they saw it as important, and they knew that culture affected achieving their strategic goals, many of them said they were not putting as much effort into shaping their company’s culture as they would like to.
Scott Harper: Well, that’s a real disconnect. Why?
Pam Harper: There were good reasons. The two biggest ones were that there was a lack of time for the programs. And they didn’t have the right people in place yet.
Scott Harper: So that’s how they saw it. What was underneath that?
Pam Harper: Our survey showed that it frequently comes down to uncertainty about the return on investment. So for instance, take time − you know a lot of people think that addressing culture means a whole complete culture change program, a special initiative that’s separate from the real work. It goes into a company and pulls people away from what they need to do to make money. They’ll say, “Well, it has to be designed by human resources. And it would include team building offsite parties and awards and teamwork. The signs on the walls and all those classes and that, of course, takes a lot of time and expense.” That’s how many people think about it.
Scott Harper: Okay, so they’re not sure if they’re really going to get a return − how it’s going to play out in what the company actually does.
Pam Harper: “Show me where it comes back to the real world,” is what they would say. And as far as the “we don’t have the right people,” which was the other issue − this concern could also be rooted in thinking about culture change as a big comprehensive program off by itself. Think about this − if you’re concerned about the return on investment, you want to make sure that you’re going to have the right people participating in this huge culture change program. Why would you want to waste time and money?
Scott Harper: Well sure. “So let’s put it off until we’ve got the right people so we can have everybody involved.” The problem is that putting it off just lets it go however it’s going to go.
Pam Harper: And another thing to keep in mind is there will never be a time when we have all the right people in place. Our companies are constantly changing. New people are coming in. People are leaving. Companies go through mergers and acquisitions. They go through downsizing, growth spurts and so on. So to wait for that perfect time doesn’t work because it just doesn’t happen. I remember one time I was speaking with the CEO of a company that was about $5 million in revenue. I asked him about his company’s culture, and he said, “Well, we haven’t had time to put one in yet.” And yet there were all kinds of things that were going on that were definitely the company’s culture.
Pam Harper: What he was saying was he hadn’t shaped it. So the issue is that it seems very overwhelming. It’s not that leaders don’t know that culture has a profound top and bottom line result that can give a competitive edge. They really do. The challenge is knowing how to influence culture in a way that provides the results that they want with a good return on investment.
Scott Harper: That’s understandable. So what’s the answer?
Pam Harper: The answer is we need to reframe how we think about shaping corporate culture. We need to shift away from thinking about culture change programs and instead look at linking specific culture transformation to the real work of achieving business goals and outcomes.
We’re going to talk about this more in the second segment. But first, we’ll take a quick break. Stay with us…
Scott Harper: You’re listening to Growth Igniters Radio with Pam Harper and Scott Harper, brought to you by Business Advancement Incorporated. We’re on the web at BusinessAdvance.com. We enable successful companies to accelerate to their next level of innovation and growth. And if you like what you’re hearing, spread the good word! Go to GrowthIgnitersRadio.com, select episode 124, and use the social share links on the left side of the page to tell your social media communities all about us.
Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper − that’s me − and Scott Harper. Today Scott and I are talking about a more powerful way to shape your company’s culture for growth. To make this something that’s workable and impactful, we need to shift away from thinking about culture as something that we change in a big cultural transformation program. Instead, we need to look at how can we transform aspects of our culture so that it’s related to the real work and business goals that we have in everyday life.
Scott Harper: So it becomes more relevant, and it becomes more manageable. OK, so how do we do that?
Pam Harper: Well first we have to start out with a caveat: while there are some real standards of a healthy culture, such as commitment, aligned values, and compliance with the legal and ethical standards of the country that you’re operating in, there is no “best culture.” There’s only the culture that supports your company and how you want to grow it.
Scott Harper: So there’s no best personality for an individual; there’s no best culture for a company. So bearing that in mind, let’s talk about a real example of how linking cultural transformation to business outcomes work.
Pam Harper: For example, I met with the CEO of a successful middle market company with very bold growth goals. The reason he brought me in was that he did recognize that the only way he was going to be able to reach his goals was to transform the company’s culture at that point. There were a lot of silos in the organization, and they were getting in the way. While people communicated within their chain of command, it was slowing down decision making and productivity. This was having a bearing on their ability to achieve their business goals and their strategy. And it was also impacting on their reputation in the industry and their ability to keep attracting the key talent that they needed. These were a lot of the things that we talked about in the first segment
Scott Harper: You said he recognized the importance of culture and business performance. So I take it he had tried something already?
Pam Harper: Yes he did; he was a very progressive man. The company had already launched a culture change program. It was very carefully designed and executed by their human resources group, which was filled with very talented people.
Pam Harper: They had included team building, off-sites, parties, awards, teamwork signs on the walls, and everybody loved these programs. The classes got rave reviews. There was only one problem: the executives had a very difficult time measuring the return on investment.
Scott Harper: So they had the program, but they weren’t necessarily seeing the results they wanted.
Pam Harper: It was very hard to see the changes in communication and business performance that were needed to speed decision making and productivity.
Scott Harper: OK, so they made the investment. They weren’t getting the results. My guess is they were pretty frustrated.
Pam Harper: I think you can imagine what happened next. They indefinitely postponed further work on the culture building program. The senior executives reallocated the resources and people to focus on what they called “the real work.” That included launching a new product and integrating a merger. So they were very busy. They were also missing key people. However, the lack of collaboration and the slow decision making persisted, and unfortunately, it ended up delaying the integration and the product launch.
Scott Harper: So they had a series of stubborn issues. So at that point, that was when they brought you in?
Pam Harper: As I said, he understood the link between culture and the business results that he needed. But the generalized culture change program they had tried just was not the way to do it.
Scott Harper: So was it was too broad. What did you all do, then?
Pam Harper: We came up with a different approach. We started with looking at what business outcomes they needed to see, and we worked backward from there. We said, “Given those business outcomes, what is the strategy that you are using to get to those.” He discussed that with me, and we said, “Well, what would be the organizational performance that is needed in various areas to pull off the strategy?” And that got into “how does the culture impact that?” And so we looked at very particular elements of the culture that would most impact behavior and organizational performance. That’s how we started out.
Scott Harper: So you got more granular…
Pam Harper: That’s right. And that specificity was what made all the difference. We could focus the efforts.
Scott Harper: Okay, that sounds like a plan. So what were some of the specific, focused things that you all addressed?
Pam Harper: One of the first things we looked at was their longstanding view of what they communicated with employees and partners, and how they did it. It turned out that one of the reasons that it was difficult for people to make decisions was they didn’t really entirely understand what was happening in the company. So that got into a bit of the business philosophy: “How do we communicate with employees?” They have been used to holding things very close then.
Scott Harper: So they needed a more broadly shared strategic outlook so people could make more decisions that would actually impact the strategy the way they had to.
Pam Harper: That’s right. Not only in terms of how often they were communicating information, but how they were doing it. They looked at channels of communication. And it wasn’t just the official channels of communication, but bringing people together in ways where they could share more easily.
Scott Harper: So this gave them a context for making better decisions. That was one thing, okay. What else?
Pam Harper: Another area that we looked at was adjusting the organizational structure. The hierarchical silos they had were removed. So that’s shaping a formal aspect of the culture.
Scott Harper: Adjusting formal structure is very important. I also imagine that there were longstanding habits of how people worked together that also had to be overcome, and those weren’t necessarily written down.
Pam Harper: That’s the informal aspect of the organizational structure. People will sometimes group themselves according to what they think makes sense. So there has to be not just the formal structure, which is an aspect of culture, but also reinforcing informal practices in a positive way − why it makes sense for people to collaborate and to communicate in new ways.
Scott Harper: So framing specificity: “This is what we want to happen. This is what we need to go on to make that happen.” That gives reinforcement to changing habits up and down the line.
Pam Harper: That’s right. And it doesn’t have to take all the time in the world. Again, it’s very specific.
There was a third thing that we looked at as well. As you can imagine, with all these different behaviors it was necessary for leaders in the company at different levels to more consistently reinforce collaboration and faster decision making in these new structures.
Scott Harper: There were aspects of both formal and informal culture change going on there. The focus helped create the relevance for why that made sense to do.
Pam Harper: That’s right. And helping people to look at what is often automatic for us to do, and then to gradually begin to adjust that so that it works in a new, even more positive way.
Scott Harper: So as it turned out, this became a good news story of cultural transformation and business performance
Pam Harper: The company grew dramatically because they were able to make faster and more effective decisions. And it became a place that was very attractive in the marketplace. So the key people that they needed started coming over. They were drawn over to this company.
Scott Harper: So you get a virtuous cycle going on.
Pam Harper: It was fantastic. The important thing to recognize in this is that everybody in the company was working on very specific aspects of the culture. And at the same time, these aspects were all interrelated. There was a focus to them, so it wasn’t just a series of disjointed efforts. Linking specific aspects of culture to the organization’s performance and business goals that were most important to this company really paid off. It made them more competitive.
Scott Harper: So the question then, is how can our listeners apply some of these ideas to their own companies and move forward?
Pam Harper: That’s what we’ll discuss in the next segment. So we’ll take another quick break, and we’ll come back with a more powerful way to shape your company’s culture for growth. Stay with us…
Scott Harper: This is Growth Igniters Radio with Pam Harper and Scott Harper, brought to you by Business Advancement Incorporated. We’re on the web at BusinessAdvance.com.
Pam Harper: If you’re listening for the first time, welcome! We release a new Growth Igniters Radio episode every two weeks. On alternate weeks, we send members of our community a short thought-provoking blog post. We give our perspectives on an emerging trend or news item that you need to know about. We also include immediately useful tips to put this idea to use.
Scott Harper: And here’s a last call. Sunday, October 15th, 2017 is the last day of our special offer to join the Growth Igniters community and get a special bonus. We will immediately send you one of our most popular Harper reports, “how to take control elephants in the room.” This is a major issue that can make or break growth and success. And face it − every company has elephants − things that everyone knows, and no one wants to talk about.
Pam Harper: in this report, we discuss not only why elephants exist, but how to stop them from derailing your company’s success. We also give steps you can immediately take to create the conversations that are critical to dramatically accelerate momentum.
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Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper and Scott Harper. Over the past two segments, Scott and I have been talking about a more powerful way to shape your company’s culture for growth.
Scott Harper: Right. And we’ve emphasized how important it is for you to stop looking at culture change as this huge global project that displaces “the real work” and focus in on specific growth objectives that have to be met, and the cultural elements that need to support those. It’s much easier, then, to make the cultural transformation more relevant and more actionable, and to actually make it happen.
So now we’re in the third section of the podcast, where we like to present some immediately actionable advice for people who want to apply these ideas to their own company. Talking about specificity linking cultural transformation to specific business outcomes, what’s the first piece of advice?
Pam Harper: The first piece of advice would be for your very next leadership meeting. Get in the habit of discussing the perceptions that each member of your team has about organization culture, and how it’s affecting the outcome and results of what’s most important for your company. Real decisions are being made off of the way we perceive people’s understanding of what is going on in the company.
For example, in the story that I was telling in the last segment, the executive team did not all have the same perception of the culture. Some people thought that everybody was really open and understood exactly what was going on. Others did not feel that way. But they weren’t talking about it, so these issues were not being explored. We talk about the elephant in the room, right? This was an elephant in the room.
Scott Harper: Right. And calling it out gave them an opportunity to address those issues and create a much more cohesive approach to their cultural transformation.
Pam Harper: Yes. And with boards of directors paying more attention to the oversight of culture, it’s important to make sure that these discussions are between not just the executive team, but with the executive team and the board as well.
Scott Harper: That gets rid of assumptions and allows people to focus on doing what’s most important. All right − so what’s a second piece of advice broaden your perceptions?
Pam Harper: Go outside of the executive team and board and gain a variety of stakeholder perspectives about the culture. Oftentimes, we see things from our own perspective not as clearly as we could, and others have a very different point of view. For example, in the story that we were talking about in the previous segment, the executive team did conduct a cultural survey, and they got back some very surprising insights.
Scott Harper: Yeah; cultural surveys are popular, and they’re hot right now. But the thing is, they may not be enough by themselves.
Pam Harper: That was in fact in this case. One of the things that this team also decided was that they didn’t have enough information, despite the survey. That led to other ways of gathering insights. One of them was to work with groups. Where a survey is good for some types of people, in a group situation, you have other people who feel more comfortable talking about what their perceptions are.
Scott Harper: And in other cases, sometimes going to individuals in a targeted way can make it even more comfortable for them to be candid. By combining all these different insights, you can come up with a cohesive whole. So you’re looking at it from different angles, and it can be surprising and give you much better actionable information.
Pam Harper: Yes, that was certainly the case in that story.
Scott Harper: Let’s have one last piece of advice for creating a more powerful cultural transformation.
Pam Harper: Decide which specific elements in the formal culture and the informal culture need to be adjusted in order to best promote your strategy and the outcomes you really need.
Scott Harper: OK, so you’re getting specificity on what you want to promote − what you want to advance − and now you’re targeting in what is going to make that happen, and the cultural factors that will support those actions.
Pam Harper: Right. The more that you understand how certain behaviors impact performance. For instance, is collaboration what you really need for decision making? Maybe yes, maybe no. Maybe you have some other issue that is even more important. So, it’s looking at which areas we see as doing well, and where do we need to put more emphasis.
Scott Harper: Can you go a little deeper into that? What’s an example?
Pam Harper: We’ll go back to that story again that I was talking about. So when they were going through and looking at the results, interpreting what all of the different input that they received told them, they decided that there were some aspects of culture where they were doing quite well. For instance, social activities like bringing people together so that they had a chance to get to know each other enough to begin to increase trust − that was very good. Where they were having issues, however, was in the area of teamwork. In fact, there were some pieces of information that actually helped us all to understand that people were being dis-incented in some respects at the same time as in other ways they were being told that being a team was a good thing. Those were areas they had to work out.
Scott Harper: So identifying that disconnect allowed the leadership to target in on that in a very focused way, in the context of real work that people saw as relevant.
Pam, it’s been a great conversation. Do you have any final thoughts on powerful ways to support cultural transformation so companies can grow to new levels of success?
Pam Harper: Shaping your company’s business culture as a competitive advantage is not a once and done because the business environment is constantly changing. It’s not necessary, or even desirable to do a cultural overhaul because there is no end point in sight. Instead, when you link the elements of your organizational culture to the performance and the business outcomes you need, you’ll get to where you need to be with much greater impact and velocity. And that’s the more powerful way to shape your company’s culture for growth.
Scott Harper: Thanks, Pam, and thanks to you out there for listening to Growth Igniters Radio with Pam Harper and Scott Harper. To check out resources related to today’s conversation, share on social media, read our bios, or sign up for the Growth Igniters community, go to GrowthIgnitersRadio.com and select episode 124.
Pam Harper: Until next time, this is Pam Harper…
Scott Harper: and Scott Harper…
Pam Harper: Wishing you continued success, and leaving you with this question to discuss with your team:
Scott Harper: What do we need to do to continuously shape our culture so it provides a continuous competitive advantage?