Is Culture Just Pink and Fluffy?

Can company culture help your business grow?

Company culture is often abstract and viewed as a “nice to have” once the “real business strategy” is in place. Company culture is often ticked off a list once free breakfasts, pool tables and cool offices are implemented. Company culture, in truth however, should be 100% focussed around business growth strategy – how is your company culture going to help you further delight your customers and increase revenue & profitability? To really unlock the power of a great culture, it needs to be addressed strategically. Start by identifying your company mission, translating it into strategic guidelines for hiring and engaging staff, and coaching management in how to get the best from their people.

It isn’t a coincidence that Fortune’s Top Companies list, pretty perfectly match the ranking of best companies to work for on Glassdoor – great culture means great business.

The foundation of HR in most businesses is amiss – human resources suggests humans should be viewed as simply a resource, whilst talent acquisition, suggests that you are simply acquiring people – in both cases – where is the suggestion of any sort of two way relationship? In a market that is increasingly driven by the employee, vs the employer, it is important to consider what you provide them as a work experience. For most businesses, people are by nature a companies biggest operating expense, and therefore it isn’t fluffy to think of employees as a companies “biggest asset” – they simply are.

Although many feel that the giants of Silicon Valley are not a realistic comparison to look to for inspiration as a growing small or medium sized business, we shouldn’t forget that all of these companies were once small or medium sized businesses, and most realised the power of culture from an early age.

Netflix started their culture strategy at 80 staff, which has now led to its infamous 124 page culture manifesto focussed around valuing behaviours like courage, curiosity and impact. Their culture is highly strategic and they take a hard lined approach to Netflix being a “fully functioning, adult team” focussed on taking responsibility. Activities include a “keeper tests” for managers to apply to employees – anyone who doesn’t pass, gets a generous severance package. Low levels of performance = no job.

Facebook also prioritised culture from an early stage, and much as free meals, sleep pods and vending machines full of free technology accessories, look like “nice culture” from the outside, they are all strategically aligned with the mission of maximising the output time of employees by getting them back to work, quickly.

If the billion-dollar brands of the West Coast are taking culture seriously, maybe you should too. Ditch the freebies and perks in favour of solid strategies that make culture the concrete foundation of your business.

7 strategic steps

Some key strategic steps to consider:

  1. Culture Should be Led from the Top, but Built Between Peers. Not only do leaders need to set the tone and direction for successful culture change, but activities should be put in place to ensure that it is embedded at every level. Culture champions in the form of key staff members across departments and seniority levels are key to this implementation, as is a “do as we do” mentality from all levels of leadership.
  2. Treat the Cause not the Symptom. More often than not, culture is the golden thread that runs throughout your business, and often issues such as conflict are treated symptomatically by individual case, when really they should be looked at from a big picture elevation point. Think – what is it about our culture that is allowing this conflict to happen? Instead of – what is it about this individual that is causing conflict? Dig for the root cause.
  3. Strategy First, Coolness Second. Is there a justifiable strategic reason to implement a change, or is it simply because it looks cool, or everyone else is doing it? Case in point – open plan working. It looks nice, on the face of it – it generates transparent working, and recently, it seems everyone is adopting this approach to workplace spatial planning. The truth? There is a growing body of research that shows open-plan spaces can have exactly the opposite effect and disengage staff, reduce transparency and reduce productivity. Reports show key differences in working styles between extroverts and introverts, and in the behaviours of different personality types. Open plan spaces, in addition to the digitalised workforces of today, can in fact be constant distractions that significantly decrease productivity. Make sure you explore the upsides and downsides of all activities and whether they contribute positively to the cultural strategy you are looking to implement.
  4. Vision & Purpose Directly Impact Strategy. Often vision and purpose can be viewed as the frill around an overarching strategy – what most cease to understand is that they should in fact by a key driver of strategy. Virgin, Starbucks, Pepsico, Pixar, EY, all understand and subscribe to the belief that purpose drives people, and in turn profits. Google may make its money through search, but their purpose is “connection” and this drives not only their sales strategy, but also their cultural strategy. People want to work for a company that has a connected purpose, and often at a lower salary or less benefits – inspire more, pay less.
  5. Value Output over Input. Too often people are measured on the time they put into something which often has no correlation to the output achieved, as Netflix put it “hard work isn’t relevant” – what is relevant – accomplishing great work and high performance levels. Not all business types can be as flexible as Netflix when it comes to completely flexible working hours and unlimited holidays – but every business can embrace outputs over inputs. Simple changes could include: changing false deadlines – why give someone 2 weeks to do something vs 24 hours? Most of the time the task completion will be tailored to the given deadline and just as good work can often be delivered in a fraction of the time when urgency is applied. Change meaningless activity based KPIs to real outputs that truly create business impact – think “win 1 new client” vs “make 50 business development calls”. Treat everyone as adults – you hired them so presumably you trust them – stop micromanaging and allow them to produce great work.
  6. Employee Experience Directly Impacts Customer Experience. Too often, consumer driven activities trump employee driven activities. In many businesses, the Business Development Manager is viewed as more senior, and more integral to success than the HR Manager – why? Your people are the ones driving your business day to day, therefore they are the ones that impact customer experience. If your employees are happy, it is likely your customers will be happy. People buy from people they like. By strategically working on developing an engaging, accountable, productive employee experience, and dedicating as much value, and resource, to these activities as you would sales activities, you will see an impact on your bottom line. Some tips? Create a cult like culture by developing your own rites and rituals; positively reinforce and recognise the right behaviours; make your training bespoke and authentic so your employees sound like you, not like a leadership syllabus.
  7. Pay Unfairly. Who came up with benchmark salaries? Pay above market for your high performers who will have a performance differential as high as 100 times (Google once estimated their high performers at 300x more than average ones), and pay your average staff, average salaries. To recruit the best in the market, and keep them, you need to find a way to compensate them in a cut-above-the-rest way. Does this mean you should lift your whole salary benchmark? Absolutely not. Incentivise the great, and you will see mediocre performers either strive for high performance, or leave and make way for more of the best.

If you’ve ever worked in a company where the culture is flat lining, you know how toxic it can be to getting work done. The temptation is to focus on specific events and to try to plaster over the cracks as they appear, or brush them off as symptoms of other things – ask why enough times and more often that not you will arrive back at culture as the root cause. To really enact change, you’ll need to address the entire culture ecosystem, and this will likely be the toughest task you’ll ever take on. Many businesses try to execute this internally, but like most things, embarking on a cultural change journey, without a well defined strategy, and the eye of an expert with that elusive external insight, may not make much of a splash in the pond at all.

Find out how Duo have helped our clients develop culture strategies that increase profitability and drive business growth, by requesting one of our free culture mapping sessions. 

It’s never feels the right time to embark on change, but the question isn’t “Is now the right time?” it’s “Can we afford for now not to be the right time?”