14. Know Your Culture

Pop quiz. And no cheating, okay? Promise?

Without stopping to think, can you succinctly explain your organization’s culture? If you were put in front of a room of new employees, or even a roomful of legacy employees, could you articulate your culture and list your organization’s aspirations? Could you conduct a briefing on how your company came to be as it is today, how it thinks, feels, and behaves, and what your culture means for the human resources and marketing departments, so that they can subsequently communicate and brand it, externally and internally?

If you can do this (and I hope you can, because even if your culture isn’t all you hope for, you still have to know it to change it), ask yourself this: Can your employees do the same? Can you sit three or four “average” employees in a room and—without coaching and with no preparation—and ask them to describe in a sentence or two your organization’s core culture? You know, can they give “the elevator speech”—the one that can inform a total stranger about the who, what, when, where, and how of your organization?

How about your managers? How about your vice presidents?

Now, take the discussion outside the company. Do your long-term suppliers and contractors know your culture? And, oh, don’t forget about all the customers. Do you think your customers can describe what your company is all about? It follows logically that if you don’t know your culture, there’s little chance your employees, suppliers, and customers will guess it correctly when asked, and that doesn’t speak well of the future prospects of your organization.

Whether you are selling replacement parts for $1 flashlights or high-fidelity supply chain optimization software that costs millions of dollars a copy, culture is undeniably essential to employee recruiting and retention, vendor relationships, customer loyalty, long-term success, and overall company value.

Now here’s the second part of the pop quiz. Can you tell stories—even stories that rise to the level of the mythical—about the history of your organization and its successes? By “myth,” I mean stories that retell the tale of an effort that was exemplary, stories that metaphorically represent the organization’s mission, aspirations, personality, and style. Maybe these stories describe something big and bold, as when your organization triumphed over adversarial circumstances, hard times. Maybe these stories describe events that tested the wills of your leaders, employees, and/or teams to produce and deliver. Or maybe these stories describe something remarkably simple, as when a member of senior management was gracious, generous, thoughtful, humorous, or even humble, when he didn’t have to be. Can you do that, off the cuff? And deliver the message with a conversational style that doesn’t look as though it was just cooked up by an intern writing for your corporate communications department?

The reason I ask these “pop quiz” questions is this: Knowing your company’s culture is a foundational requirement for fostering engaged employees, and a highly refined and carefully nurtured corporate culture is a bedrock element on which employee engagement is built. That said, I hope you are “two for two” on the questions that opened this rule. If not, don’t sweat it, because you have had many chances for extra credit in other places in the book. So don’t throw in the towel.

I recognize that you might have heard someone say, “Who has the time to give a damn about culture?” It’s something I hear often as well. In fact, many managers and leaders say that they are too focused on the important stuff like growth, competitiveness, and shareholder value to slow down and indulge the “soft science” of nurturing employees, right? They think that progressive culture and people-focused policies are luxuries reserved for companies only after they have grown rich and successful. After all, isn’t the road to success littered with rusting hulks of companies that didn’t keep their eye on the ball and got distracted from productivity, profitability, and market share by paying attention to “people issues,” when they should have been focused on getting every last ounce of productivity out of employees at every level. Aren’t the companies that have failed the ones who spent too much thought, time, and money on M&Ms, free food, and fitness centers, while dulling their cutting edge in the marketplace? Well?

Although I have a great deal of empathy with the organizational leaders who are eager for productivity and to see its impact on the bottom line, there are ways to engage employees and drive up productivity that have nothing to do with adversarial workplaces focused on punitive organizational dynamics, and “killer instinct.” In fact, I hate to be the first one to break it to you (though I am sure that I am not), but study after study shows that companies with engaged workforces—those supposedly “distracted” companies that take the time and dedicate the resources to optimize the productivity of their employee base through engagement, not imprisonment—are the companies that are consistently more productive and more competitive, with better product development, faster time-to-market, lower rates of turnover (a dramatic cost saver), faster stock appreciation, and greater market share. Time after time this turns out to be true. You can look it up, as Casey Stengel used to say.

It seems to me that the managers who don’t recognize the value of a culture of engagement are the ones who shareholders and boards of directors should hold suspect. Given the research—and there is plenty of it at every level, for every type and every size of company—the misfeasance practiced in the C suite these days is more likely to occur when leaders follow conventional wisdom like so many lemmings to implement “strategies” that work against high employee retention, strong growth, higher stock values, and competitive advantage by ignoring culture. You can’t grow long-term value by believing that the best way to build a company is to play the autocrat, the dictator, the low-balling, slash-and-burn bargain hunter with no vision beyond the quarterly balance sheet that shows short-term growth at any cost, human or otherwise.

Let’s take a closer look at exactly how culture shows itself, and how you can build an infrastructure to let a great culture emerge.

What Makes a Great Work Culture?

A couple of years ago, I went to the wedding of a daughter of a dear friend of mine. My friend is an executive at John Deere, and though he had been lured away from John Deere to join another company for a brief period, he had recently returned to the company. He had moved his family back to the Quad Cities area of Illinois and Iowa, where John Deere is headquartered, to accept a promotion to the home office.

As part of the wedding festivities, the out-of-town wedding guests were invited to the rehearsal dinner. Where was the dinner held? At the John Deere Historic Site, in the exhibit hall. Oh sure, it was decked out for fancy dining with sumptuous foods, linen tablecloths, and silver place settings. There was great service and fabulous wines. But what amazed me was the fact that the family, including the bride—with more than a few options for opulent dining surrounding the events leading up to the young lady’s wedding—would choose to have the dinner among displays of new and vintage farm machinery! What was even more remarkable was the high level of camaraderie I witnessed among my friend’s coworkers, many who were also guests at the dinner. They were all enormously proud to show off the company’s products and talk about the history of the machinery and the company. No one was ashamed of the greatness of John Deere or its impact on the exec and his family, or their individual and group relationships with the equipment giant, even though we all could have been at a nearby country club or elegant restaurant. During the evening—remember, I was there for his elder daughter’s prewedding festivities—we guests got tours of the huge harvesters and combines, and we got to look at the air conditioning systems, the stereos, and all the bells and whistles. It was a terrific night for all and quite eye opening! But honestly, how many of your employees would choose to have a daughter’s rehearsal dinner reception in a hall on your corporation’s or organization’s campus where the products you produced were on display? How many would opt for drinks at a country club instead of a tour of the latest services or gear coming off your production lines? In a word, the scene I just described shows that the employees at John Deere are truly engaged. The community of people created at work extends beyond the work environment and into their personal lives. They were full of pride for what they produced and for the company that employed them.

Now, do you think they are productive during their workday, too? You bet.

Think they go the extra mile to make a good product great? You win again!

Think they stay the extra hours and exert that “discretionary effort” that is so illusive to the vast majority of organizations and companies? Well, I think you know the answer to that.

So, back to our pop quiz. Do you think everyone, from the leadership to the production line employees at John Deere—even to the families of those employees—could articulate John Deere’s culture? How about new employees? Do new employees go through an onboarding process and come out the other end with a firm sense of what their jobs are, where they fit in, and the level of excellence expected of them?

More importantly, if a department or division of John Deere goes off track for some reason and needs to be righted, do you think you would have to look very far for cultural and corporate guidance to direct remedial action. And remember when I spoke of those stories that rise to the level of myth? Imagine how impressive it would be if you, like those who work at John Deere, could point out a few people in your lunch room and say, “See that guy. He thinks so much of this company and his relationship with it that he held his daughter’s prewedding event right here in the company museum/showroom.”

Now that’s a great culture!

Another culture I admire has been implemented by George Zimmer at the Men’s Wearhouse. I love going there, where I’m treated like royalty. I feel like an honored guest every single time. People remember my name, which may not seem extraordinary until you realize that the Men’s Wearhouse is a discount clothing store! (How many other people at discount clothing stores that you happen upon remember your name?) I strongly suspect this culture exists because Zimmer has instilled a corporate culture where the right good people are recruited and retained, where employees are respected and therefore given “permission” through example to act with respect to coworkers and customers.

The Men’s Wearhouse didn’t achieve this status by putting up posters on the wall, like the “inspirational” ones you see hanging in offices across America. They didn’t obtain this culture by accident. They did this through deliberate action, through diligent adherence to a set of principles, and through day-to-day activities that are always in sync with what the Men’s Wearhouse wants to be. We look more closely at those strategies and other examples of great cultures in the coming pages of this book.

How Does Cuture Evolve?

If your strategy to gain competitive advantage depends on product innovations, but your innovation is stunted by a stifling organizational hierarchy and the political (as opposed to meritorious) composition of teams and departments, you have a failed strategy for establishing a winning corporate culture. If your culture rewards only superstars and A players, and treats the rest of the employees like serfs in a feudal system, you are bound to stumble. Yet corporate culture is not something that you dictate, like vacation policy and rules for expense reporting.

Some years ago, I was at a conference that featured discussions about the most-admired companies in America. During a particular presentation from a leading consulting group, which will go unnamed, I happened to be sitting next to an acquaintance of mine who then was a senior executive with Levi Strauss. The presenter started to speak about how to go about building culture. At the mention of “building culture,” and the listing of the recipe ingredients, my friend and I looked at each other with our heads cocked. Then we turned back to the speaker, both sure that he had misspoken. As we listened, it turned out that “building culture” became the full theme of the presentation, and my friend and I kept catching each other’s eyes and looking more and more doubtful. At the time, I was in my role as vice president for human resources at SAS Institute, a job I held for 19 years, and where I am proud to say I played a part in creating a company widely recognized as one of best places to work in America for many years running. As the presentation ended, my friend and I walked toward each other and said, almost simultaneously, “These guys don’t get it!” You don’t build culture. Even the best management teams, with the best corporate C-suite guidance, can hope only to create a work environment and infrastructure that displays compelling values, an expected behavior pattern, and a clearly articulated mission. From that, you hope that a great culture emerges, and if it doesn’t, you intervene with practices and processes aimed at redirecting and changing it.

The truth is, like it or not, you are going to have a culture in your organization. It may not be the one you want, and it may be a culture that emerges by accident or even by default. It may even surprise you that a culture has evolved that is more admirable than you at first imagined. But make no mistake. You are going to have a culture.

That culture is the sum total of the emergence of the relationships among enterprise values and mission, how your leadership behaves, how your people view and treat each other, how you are viewed from the outside, and how all those things are reflected in your products and relationships to your customers and vendors. Naturally, you can’t freeze a culture in place. The culture changes and evolves, as people and events change. So it is critical for managers and leaders to engage in the pick-and-shovel work to learn what your culture is before you attempt to build or change it, and that activity is important for a couple of reasons. First, if your organization’s leaders have no idea what culture is, in an abstract and academic sense, and no specific idea what your own culture is, it is virtually impossible to put together an action plan to affect that culture. There can be no widely understood way for people to converse, explain, and understand the culture. Worse, with no firm understanding of your culture, a well-intentioned and ambitious executive may jump in with grand plans to affect the culture. But with no direction or guidance, she may implement notions, ideas, and plans that are so countercultural as to be entirely ineffective and headed for “flavor of the month” status—after you’ve spent considerable resources on the exercise.

So, it is critical for managers and leaders to discover their culture and bring their aspirations for the company into sync with that culture. The aspirations don’t have to be high-minded. We are not necessarily trying to implement the steps leading up to sainthood here. It can be something as simple as, “We want to be big!” But it is the culture that gets your employees to “share and care.” It is the culture that acts as a guiding beacon, per se, for the activities at every level of the company so they are brought in sync with the company’s aspirations.

Take Southwest Airlines for example. They have a remarkably consistent culture across a wide, growing, and diverse employee base. If you are an observer of that company’s culture, as I am, you would recognize that they have done a great job of promulgating that culture to every level of the company, from the chief executive to the newest reservations agent. It even is displayed in the painted decoration of their aircraft, which display a red heart. What is that culture? It’s to celebrate accomplishments, large and small, trust your coworkers, and be willing to risk putting yourself out there. It asks employees to display a sense of humor and help one another. It expects employees to share and believe in teamwork. It teaches that you have to be able to put other people ahead of you, so the company gets ahead. If an employee is not willing to do that, to openly display “love,” then he is not right for Southwest Airlines. That person is not in sync with the company culture and will be rejected or managed out. The same can be said about cultures for other admirable companies, such as Apple, Ben and Jerry’s, American Eagle Outfitters, the U.S. Olympic Committee, Minitab, Inc., and Ascend One, among others. They broadcast a consistent “homing beacon” that says, this is how we behave; this is how we succeed. That homing beacon implicitly asks simple questions of employees, prospective new employees, contractors, vendors, and finally customers: Do you fit in with us? Would you be honored to do business with us...because we honor those with whom we do business. We are family. Are you part of our family too?

Nurturing Culture

If you have unintentional culture, a culture that is has evolved without nurturing, and it is detrimental to your organization’s success, you must move firmly to revise the culture. How do you change culture? First, announce loudly that you find the existing culture unacceptable and not in line with the mission and vision of the organization. Then you have to change all the behaviors within the organization that drive the unacceptable aspects of it. For example, at SAS Institute, we wanted to have a culture of inclusion. It was critical to our success because our products worked best when developed collaboratively, and a culture of inclusion was one of the ways we would attract and retain employees.

So, at SAS Institute, every policy and procedure was built around making all employees feel they had a voice and some measure of real control in the processes that ran the company. We showed that what mattered to them mattered to the senior management and ownership. We were careful to show these employees respect and to respect the things they cared for, whether intellectually, socially, or with their families. These shared concerns were all openly and visibly important to SAS Institute. Accordingly, we offered things like an on-campus health care, day care, and fitness. It signaled to the employees that we were concerned for their well-being and the well-being of their families. Sure, you can put a price on all these things, because, believe me, they were expensive to provide. But we were signaling to our employees (and top-notch prospects whom we would love to employ and keep away from our competition) that we included everyone as equals and recognized that, at the end of the day, each of them was a volunteer whom we hoped to have back the next day for a productive day at work...because they wanted to be there.

We also heavily subsidized the cafeterias and created restaurant atmospheres. All were open to employees and their families, so the children from the day-care center could regularly come over to share lunch with mom and dad, grandma and grandpa. We served nutritionally prepared food, not junk food. We said we wanted to be inclusive, and the infrastructure we built demonstrated the seriousness of our intentions.

We also encouraged employees to speak up in multiple forums—some online and some in-person—where we took their opinions to heart. We signaled to everyone that we welcomed complaints and concerns when they were offered in the spirit of cooperatively solving problems. We viewed complaints as the surfacing of issues to be considered. We didn’t always satisfy requests or make changes, but we surely listened carefully and always responded in a reasonable amount of time.

It sounds a little too simple—too obvious to me—to be called common sense, but if you want a culture of inclusion, senior management must actually believe in including people and their ideas. If you want a culture of respect, you must have a management team that respects each other and the employees. If you want to break down organizational politics, you actually have to censure political behavior. And you absolutely must recognize and value the dignity of every contribution, from the work of the cafeteria dishwasher, through the “steady Eddie” B players, and to the high impact A players.

Once you start to establish a culture, like the culture of inclusiveness we created at SAS Institute—which over time dramatically and consistently increased our competitiveness and built a record of remarkable employee retention—you have to take the next steps to deliver on the deal you made with the workforce. Part of that is inculcating new employees into the culture through a robust orientation period, and I don’t mean having a middle manager or an HR assistant show them the insurance forms, indicate the work schedules, and lead them to the office supplies closet.

Just as implementing a culture is an activity that must be taken seriously every day, so too should the acculturation of the new employee onboarding process be taken just as seriously. The onboarding process is a socialization and inculcation experience, and it should last 90 to 180 days. Moreover, it should retrieve as much information as it imparts. Why did you come here? Why do you think you are a fit here? These should be common questions asked of all new employees, because the answers to those questions give you an accurate read on how your culture is perceived outside the company walls. But those same questions are just as important to ask of people who have been there three, eight, and ten years, and we asked them at SAS. Why are you still here? Why have you volunteered to come back day after day all these years? What do like about being here, and what rankles you? Those answers, too, tell you a great deal about your culture.

During these processes, I can’t overemphasize the importance of the CEO’s personal involvement, or the importance of her physical participation in some way during every orientation. Just her presence sends the message that you’ve got the attention of a very busy person. You’re important and worth my time. We’re glad you’re here. It also sends the message that we honor the people we value, and here’s what you can expect from your relationship with this company.

Now it goes without saying that it is crucial to have the right people at every tier in your organization, no matter how they are welcomed in the onboarding process. As Jim Collins famously says in his books Good to Great and Built to Last, it’s not just good people, it’s the right good people that matter for success and competitive advantage. Sure, you need to hire people with baseline talents and skills. But moreover you need people who can both take advantage of and complement the culture you have established, so that they can grow to be better than they were on their first day of work. That means creating a culture that offers opportunity and growth potential, and in other rules we look closely at how to align the organization’s interests with the personal interests of the employee.

Additionally, you have to find people who fit. You can have the most dynamic onboarding process in the world, and you can have the CEO buying breakfasts for the five-year anniversary of an employee and giving him a one-on-one for an hour to talk about the company. You can offer free on-campus health and dental, free day care, a 40,000 square foot fitness complex, but if the skilled and prepared employee doesn’t care much about the things that matter to the organization, it will all be for nothing. That’s because people who don’t fit, can’t align. Ever. It’s always a mismatch. So, your culture must serve not only as an integration tool for new employees and a guiding beacon for legacy employees, but it must also serve as a homing device for the kinds of people—the right good people—who are culturally in sync with the goals and aspirations of the organization.

Finally, I’d like to address the theme that I’ve visited throughout this book, and that’s the reasons people come to work and the role culture plays here. Do you know that it’s not about the money? Oh sure, you have to pay people, and pay them competitively. But the number one reason people get up and go to work isn’t the money. It’s that they have a visceral need to do something of worth and to contribute something of value to an entity larger than themselves—to their employer, to society, and to their own sense of self-worth. The second reason: They want to make that contribution in a place worthy of the effort and its meaning to them and their communities. They want to be proud of what they produce and benefit from how that result or outcome contributes to their relationships in life. And that pride is tied to where the contribution is made. Third, they want to leave some kind of legacy—Lee Iacocca’s Mustang, Steve Jobs’s Mac and iPod. Fourth, they want to do it in the company of others so that they enjoy the interaction that accompanies good work. In fact, we all talk about the importance of money, but it really is pretty far down the list. The question for the managers and leaders who are interested in culture is this: Do you have a workplace that provides an infrastructure and a context of opportunity and respect where people can contribute, be recognized for it, be proud of their production, have high levels of camaraderie, and leave a legacy—all in service of the company’s growth, aspirations, success mission, and profitability? Oh, and can they do that while still wanting to proudly have their daughter’s wedding reception in the company museum?