The components of the organizational playbook are culture, incentives, leadership, people, and politics. Choose the behaviors, relationships, attitudes, values, and environment that will make up your new culture. Invite people into the new culture, noting who accepts your invitation in what they say, do, and believe.

Given enough time and money, your competitors can duplicate almost everything you've got working for you. They can hire away some of your best people. They can reverse engineer your processes. They can match your service levels. Even innovation, unless embedded in the culture, can be matched. The only thing they can't duplicate is your culture.¹

Guy bumps into a competitor's star engineer at a trade event:

“Would you come work for us if we gave you $1 million/year?”

“I would.”

“How about $50,000/year?”

“What do you think I am?”

“We've already established that. Now we're negotiating.”

While not everyone is for sale, enough are to make you vulnerable.

Even if you've got things patented, trademarked, or cloaked in multiple layers of secrecy, your competitors can see what you deliver, what you get done, and the core pieces of how you do it. Even if they can't duplicate what you do exactly, they can get close enough to hurt you—or take it to the next level and render your processes or products and services obsolete.

In many respects, leadership is an exercise in building culture. However you define it, culture is the glue that holds organizations together. Culture is often impacted by pivotal events, such as a new leader joining an organization, a significant external event, or—wait for it—combining organizations post–mergers and acquisitions (M&A). These moments present opportunities to accelerate culture change and deliver better results. Culture change is about bridging the gap between the current state and the desired state, which better enables a team to achieve the organization's mission and goals. The greater the cultural differences, the more difficult the adaptation or change will be. There's real power in understanding the most important cultural differences and then building a plan to bridge those gaps over time.

Jim Donald took the helm of Extended Stay Hotels as it was emerging from bankruptcy, tasked with the mandate to take the company public. He soon realized that while the company was officially out of bankruptcy, the mindset of staff was not. There was still a heads-down, play-it-safe mentality throughout the company.²

Donald knew that this type of behavior was not going to take them where they needed to go. It was now time for bold moves and innovative ideas. His solution was to give each employee a “get out of jail free” card. It guaranteed that as long as they were taking (safe, moral, legal) risks, they would get a free pass if things went wrong. The goal? Empower employees to go out on a limb to try new things.

“Things changed overnight. We began our march to an [intellectual property offering] IPO, and not only did we go public in less than a year, Extended Stay Hotels was just purchased last month for $6B. That's a true testament to the power of encouraging risk-taking,” says Donald.

“It was not magic. It was giving our employees power to make decisions. Encouraging risk taking, with the freedom to fail, is a leadership trait that most leaders are either afraid to do, or don't understand the huge upside and very little downside. Leaders today have to understand that in today's world, in our currency economy, status quo means you're going backward.”

We've seen countless examples of front-line employees going above and beyond to surprise and delight customers, with just the right gesture at the right time. (Think about the legendary guest experience at brands like Southwest Airlines and Disney.) These kinds of experiences are possible only when the front line is empowered to go beyond the checklist and make decisions.

“The right sales team, the right manufacturing team, the right frontline, should have and should demand the ability to make the decisions that could change the trajectory of the company, at the moment that decision needs to be made. Encouraging risk taking and building a culture of risk on your team is vital.”

Some define culture simply as “the way we do things around here.” Others conduct complex analyses to define it more scientifically. Instead, blend both schools of thought into an implementable approach that defines culture as an organization's behaviors, relationships, attitudes, values, and the environment (BRAVE). The BRAVE framework is relatively easy to apply yet offers a relatively robust way to identify, engage, and change a culture. It makes culture real, tangible, identifiable, and easy to talk about.

It's helpful to tackle the BRAVE components from the outside in with five questions, as shown in Table 17.1.

When evaluating each element of culture, think of it on a sliding scale (say 1–5), rather than in absolute terms. The specific dimensions within each cultural component may vary from situation to situation.

Brave Cultures Are Sustainable

All music is made from the same 12 notes. All culture is made from the same five components: behaviors, relationships, attitudes, values, and environment. It's the way those notes or components are put together that makes things sing.

In sustainable, championship cultures, behaviors (the way we do things here) are inextricably linked to relationships, informed by attitudes, built on a rock-solid base of values, and completely appropriate for the environment in which the organization chooses to operate. As Simon Sinek famously pointed out, most organizations think what–how–why. Great leaders and great organizations start with why (environment and values), then look at how (attitudes and relationships) before getting to what (behaviors).

It's the context that makes it so hard to duplicate a championship culture. Because every organization's environment is different, matching someone else's behaviors, relationships, attitudes, and values will not produce the same culture.

Since you should align your culture, organization, and operations around one of four strategies, it's helpful to flesh out what the four different cultures mean. Let's work through that starting with a culture of independence in support of a design strategy.

Design: Independence

As depicted in Figure 17.1, in a design-focused organization, it's all about unleashing individual creativity and invention.³

The design-focused core has five main components:

1. Strategy: Design or invent
2. Culture: Independent (and flexible, with emphasis on learning and enjoyment; Figure 17.2)
3. Organization: Specialized
4. Operations: Freeing support
5. CEO: Enable with principles

In The Culture Factor, Boris Groysberg and coauthors⁴ suggest eight primary cultural styles (learning, enjoyment, results, authority, order, safety, purpose, and caring) that fall on the two dimensions of flexibility (stability and independence) and interdependence. It's a helpful construct that benefits from a fleshing out across the BRAVE dimensions of behaviors, relationships, attitudes, values, and the environment. (These are different dimensions than we're now using in the base tool. The actual dimensions are flexible.)

A culture of independence is on the outer edge of every BRAVE dimension. In every case it is more open, diffused, caring, flexible, informal, and casual. Expect people operating in a culture like this to care about learning and enjoyment, to be proactive and driven by their own interpretation of the intended purpose. These people will be hard to control, which is exactly what you want.

Build a culture like this to unleash creativity and invention—the first step in innovation. Innovation is the introduction of something new. You need to be innovative to stay ahead of the curve whether your primary strategy is design, production, delivery, or service. If you choose one of the latter three strategies, you may outsource your design and invention. In any case you can do a better job introducing new things with the five keys to BRAVE innovation:

1. Environment—where to play: Establish a shared definition of innovation for your organization.
2. Values—what matters and why: Aim innovation at business concepts and models.
3. Attitude—how to win: Valuable innovation is born of new, frame-breaking insights that light the way.
4. Relationships—how to connect: Learn by doing with discipline across your innovation system.
5. Behaviors—what impact: Drive an end-to-end process through to commercialization.

Produce: Stability

In a culture of stability in support of a production strategy, it's all about ensuring reliability.⁵

The five core components of stability are:

1. Strategy: Produce and manufacture
2. Culture: Stable (and independent, with emphasis on results and authority; Figure 17.3)
3. Organization: Hierarchy
4. Operations: Command and control
5. CEO: Enforce

A culture of stability is at the inner point of every BRAVE dimension. In every case it is more results focused, authority driven, formal, hierarchical, directed, and closed. Expect people operating in a culture like this to care about order and safety, to be reactive, and to follow purpose and rules as written. These people will do what you tell them to do and not much more—which is exactly what you want.

Build a culture like this to produce things consistently and reliably on an ongoing, regular basis.

Deliver: Interdependence

In a culture of interdependence in support of a delivery strategy, it's all about enrolling diverse players across the ecosystem.⁶

The five core components of an interdependence culture are:

Strategy: Delivery, product supply, logistics

Culture: Interdependent (and stable, with emphasis on order and safety; Figure 17.4)

Organization: Matrix

Operations: Shared responsibility

CEO: Enroll

A culture of interdependence is a blended culture. The predominant feature is diverse people working interdependently to deliver things. Thus, individuals have to be open to differences as they deal with a range of suppliers and customers. While there's generally a bias to stability, order, and safety, everything else falls in the middle. Decisions may be hierarchical or diffused. People may be proactive or responsive. They have to balance results and caring and be open to directed or shared learning.

Build a culture like this to manage logistics and product supply chains and deliver things in an orderly and safe way.

Service: Flexibility

In a culture of flexibility in support of a service strategy, it's all about doing whatever is required to provide the best experience for customers or guests or whatever you call them.

The five main components of flexibility in support of service are:

Strategy: Service and customer experience

Culture: Flexible (and interdependent, with emphasis on purpose and caring; Figure 17.5)

Organization: Decentralized

Operations: Guided accountability

CEO: Champion experience

A culture of flexibility is—wait for it—flexible. Its people are going to be all over the map. When you focus people on service or customer or guest experience as a higher purpose, when you ask them to care more about customer impact than about short-term results, when you push decisions out to them, don't be surprised when your managerial authority is diminished. Customer first by definition means everything else second.

Cultures like this help you win with service strategies. They are counterproductive for producing and delivering and are also probably distractions for designing.

Making It Real

Whether your society is a company, family, tribe, or country, its culture is the combination of the characters of its members. While some members have more influence, all have some. So manage positive and negative deviation from true fit—especially when hiring and onboarding in general or after a merger.⁷

There are three steps to directing the culture of an organization:

1. Understand the true culture and character.
2. Focus on the most important differences.
3. Figure out the potential impact of those differences and act accordingly.

Attitude Is the Pivot Point

As you work to evolve your culture, focus on attitudes. There's a strong case to be made that IBM's near-death experience was a result of a bad attitude. It thought it was the best. It thought its customers needed it more than it needed its customers. It stopped being flexible. The big thing Lou Gerstner did was reversing that attitude. Behaviors and relationships followed.

More recently, we saw the same thing at Facebook. It has started believing its own myths and is losing the congruence between strategy and posture.

Of course, this oversimplifies things. Few things are as simple as we hope they are. Of course, you have to be in touch with your environment. Of course, you have to make sure your values are current. Of course, people and communication matter. Of course, it's all theoretical gibberish until someone actually does something that impacts someone else. Attitude is not the only lever. But it's generally the lever to pull first, using that choice or change to influence the others.

There are three steps to achieve the results you want:

1. Look back at the cultural assessments you did in due diligence for each organization.
2. Map out your aspirational culture.
3. Invite people into the new culture.

Evolving Aspirations

A recent survey of global executives suggests a need to evolve most organizations' culture by dialing up speed, more open communication, and broadening the definition of doing good for others.⁹

Let's start with the logic of evolving cultures: Culture is the only sustainable competitive advantage. You have to evolve to survive. It follows that you must evolve your culture to keep it a sustainable competitive advantage as opposed to a sustainable competitive disadvantage. Add to that the conclusions from executive search firm Cornerstone International Group's survey:

1. Speed: The speed and ubiquity of digitalization is forcing major change in business organizations:

   Decision-making is moving closer to customers

   Organizations are reforming smaller, more agile work groups.

   Talent acquisition is more specialized in order to deliver niche knowledge on Day One.

2. More open communication: Technology is re-writing boundaries:

   Globalization is enabled by technology advances across the spectrum

   Competition is no longer likely to come solely from within the core business.

   Information is now unfiltered and shared instantly across the organization.

3. Broadening the definition of doing good for others: Corporate social responsibility is driving culture change:

   The new generation of talent will only work where social expectations are being met.

   Social awareness requires evaluation of values and mission goals.

   Boards of Directors and CEOs must understand and embrace social responsibility.

As a whole, the Cornerstone Survey indicates the need to evolve cultures to dial up:

1. Intuitive, exploratory behaviors aimed at getting it right vaguely right fast and iterating (speed)
2. More informal, verbal, personalized, open communication (boundarylessness)
3. Broader definition of doing good for others that includes the entire human race (corporate social responsibility)

Post-Pandemic Changes

There are things people were in the habit of doing before the Covid pandemic that they're not doing now. Like a computer shut down prompts us to rethink previously open applications, the pandemic disrupted the inertia behind our habits, heightened our sensibilities, and gave us the opportunity to rethink our choices. This is why you must align the way you're leading with your followers' post-pandemic work–life balance, health and well-being, relationships, and sense of place in the world.¹⁰

Identify the Dimensions to Evolve and Choose the Order

Part of why culture is your most sustainable advantage is that it's so hard to build and hard to change. The prescription for evolution is to move only a few dimensions at a time. Create a gap between where you want to be and where you are.

Full Spectrum Creativity

Chris Wink, Phil Stanton, and Matt Goldman started the Blue Man Group by wandering around—literally. They dressed as the Blue Man character and wandered around to see how people reacted. Some didn't see them. Some couldn't see them. Some actively ignored them. Some thought they were cool.

They learned the character was not one but three. It's not Blue Man; it's the Blue Man Group. As Wink said, “Three is one.” Their magic is in the collaboration as they put on different capes to see the world with fresh eyes, overcoming their “disabilities” of being blue men with holes in their chests and reacting to everyday situations in new ways. As depicted in Figure 17.6, their different capes include:

• The scientist who likes to test things and builds instruments
• The artist or shaman who feels things and brings them to life
• Sometimes they embrace the system as group members
• Sometimes they rebel as “tricksters”
• Some play the role of hero, pushing them toward a goal
• Some act as the innocent, bringing humanity to what they do

Implications

Diversity is not a goal. It's the key to survival over time. Find and nurture people with differential strengths that complement those already existing on your team, not reinforcing them. Do not push for perfect alignment of peoples' behaviors, relationships, and attitude with your existing culture. Do not bring in a complete cultural misfit like NBC did with Megyn Kelly, but do push for some evolutionary deviation on one or more dimensions.

With all that in mind, don't wiggle on purpose. Require rock-solid commitment to that. Let's explore how to get more positive deviation, drawing from Andrew Benedict-Nelson and Leitner's book See Think Solve on how to solve tough societal problems.

In his talks, Leitner describes culture as the unwritten rules and group expectations about what we should and shouldn't do. This is close to Seth Godin's “People like us do things like this.” Leitner then goes on to suggest that unwritten rules are:

• Reinforced by social cues
• More powerful than written rules
• Virtually invisible
• Insurmountable obstacles to change

He describes four ways to deal with unwritten rules and social norms. The wrong way is to try to change them with new written rules. The easy way is not to try to change them at all and just walk away. The intermediate way is to go around them with other changes. The advanced way is to prompt and reward positive deviation.

Benedict-Nelson and Leitner's main premises are:

1. Deviant behavior can subvert the social norms—informal, unspoken rules—preventing you from solving problems.
2. Every tough problem is held in place by one or more problematic social norms.
3. See the actors, history, limits, future, configuration, and parthood and then think about norms and deviance before deviating from the norm to solve the problem.

Some definitions:

• Actors are the people involved in problems—directly, influencing or not.
• History is the stories people tell—true, false, or nonsense.
• Limits are explicit rules and laws that influence how people behave.
• Future is the set of beliefs people have about what is likely, possible, or impossible.
• Configuration is labels or categories people use—whether or not they actually make sense.
• Parthood is how your problems relate to other problems through shared actors, settings, or resources.
• Norms are the informal, unspoken rules that really explain what's going on.
• Deviance is an existing or new behavior outside the norms.

Deviance can be positive or negative, evolutionary or revolutionary, unintentional or deliberate. Positive deviations move you in desired directions where negative deviations do the opposite. Evolutionary deviations are incremental, where revolutionary deviations are major step changes. Unintentional deviations happen without foresight or planning as opposed to planned, deliberate deviations. You want positive deviations whether they are evolutionary, revolutionary, unintentional, or deliberate.

How to Get More Positive Deviance

Recall the ABCs of behavior modification: antecedents, behaviors, consequences. People do things because antecedents prompt them. They do them again because of the balance of consequences: rewarding or punishing desirable or undesirable behavior.

To get more positive deviation, start by prompting it. Hire for differential strengths to get people on your team who can do different things better than can your existing team members. Hire for differential preferences to nudge your culture in a new direction. Then explicitly invite people to challenge existing norms. It's all for naught if you don't change the balance of consequences as well.

Imagine I'm standing next to you and ask you to shake my hand. You do. I look you in the eye, smile, and say thank you. If I then ask you to shake my hand again, you likely will. You shake my hand both times because I ask you as an antecedent. You shake my hand the second time partly because the consequences of the first handshake are positive. But if I take your hand and then punch you in the face, you are less inclined to shake my hand again.

If you want positive change, you must dial up the positive consequences and dial down the negative consequences of desired behaviors and do the opposite for undesired behavior. Stop punching people in the face for doing things you want them to do—especially when it comes to positive changes that violate existing norms. And make sure others don't punish your deviants for doing things differently.

Boss comes by subordinate's desk holding a memo. “Did I ask you to write this?” “No.” Boss puts the memo in the subordinate's trash bin, effectively punching him in the face for thinking on his own.

Too many people get shunned for working harder or smarter or going an extra mile for an internal or external customer by others thinking they are being made to look bad or feeling threatened in some way. Be explicit about the need for deviance and apply the ABCs to behaviors supporting or hindering that deviance as well as to the deviance itself.

At a high level, this involves:

• Understanding who's doing what: the actors, their history, limits, future beliefs, frameworks, and context
• Digging out the unwritten rules that explain the inexplicable: the norms, social situations, and actions unexplained by laws or formal, explicit rules and who keeps the actors in line
• Helping them migrate to a better way: with a deviant behavior turned into new stories

You should have mapped your current culture and the culture of the organization you're merging with or acquiring as part of your due diligence with Us for us and Ts for them in Tool 11.1. Now add an X to each line, identifying your aspirational culture. In some cases, it will be closer to your own or their existing culture. In other case, it will be something completely different.

In either case, invite everyone in both organizations to move towards your aspirational culture. Some will accept—at least with their words. Some will decline. Those declining are the easier case. Help them find other cultures, in other organizations better suited to their preferences.

Those that accept are trickier. Some of them will believe in the new culture, have the required strengths, and end up as valuable, contributing members of the new organization. Great. Some of them will say they accept, but never really sign up. Find those people as soon as practical and help them find other cultures, in other organizations better suited to their preferences.

Figure out where you're heading, and invite others to join the journey.