CHAPTER 6

THE OPERATING SYSTEM

Two men were sitting in a small wooden boat, fishing calmly in the afternoon sun. Suddenly one of them discovered that the boat was leaking and water was pouring in. It was obvious that the boat was soon going to be filled with water and the two men would be in the sea.

The first man panicked and reached into his pocket to pull out his smartphone.

‘What are you doing?’ asked the other man.

‘I’m going to Google “leaking boats” to find out what to do about it.’

The other man looked at the source of the pouring water, saw the little round hole, found the drain plug that had somehow been removed and put it back in the hole. The water stopped pouring in.

The two men in the boat represented two different cultures, or responses, to a sudden challenge. One took on the problem from an academic perspective, immediately starting to search for information and understanding. The other looked at the situation actually at hand to find the source of the problem and was able to solve it. In this story, the first person was a university professor with little experience of boats, while the other was a keen fisherman.

This chapter is about culture from a leadership perspective.

#063 The Operating System (TOS)

The matrix that guides your behaviour.

The ‘culture’ of an organization, business, group or any social setting is the framework for action. A culture is all about behaviour. It is built into the fabric of everyday work. It tells you what to do in any situation that arises, both expected and unexpected.

When you arrive at the front desk of any professionally managed hotel chain, you get a smile. The concierge does not have to pull out a manual every time a customer approaches to find out what to do. And when an unexpected problem arises, his first reaction will be to sort it out and be helpful. This is because it is part of the culture of a service business, like a hotel, to be service-minded at all times.

One of the most striking aspects of our everyday life, and one that is not that obvious but present in the background humming, is that we constantly interact with operating systems. An operating system (also called OS, as in MS-DOS, iOS or Mac OS) is a set of programs that manages our computers and determines how we manage them. When you use your computer, smartphone, tablet or other device, the interface and the applications you interact with run on top of an operating system. The OS makes both the computer and the computer user behave in certain ways.

Just like a computer has its software, organizations and groups have their culture, which guides behaviour and determines what happens within that context. Walking into a café, restaurant or hotel, or a hospital, bank or police station, you instantly get a feel for the culture and how it works. It is not you or any other person but what is ‘in the air’ that determines the actions. As a leader you should be part of building that operating system, it is one of the most important things you can do.

The culture of a company can be called the operating system of that company. If the culture is strong, clear and – most importantly – accepted (or at least adopted) by the people in the company, then the culture will guide actions and ultimately determine how the whole company works. A culture is about values that translate into actions. The same way an operating system is designed for performing tasks, a culture should ideally be designed to bring about desired behaviour and results in a company, which in turn reflects what the company stands for and its business model. The culture is the underlying idea about how the company works to be able to serve clients, make money and grow.

#064 Sing Same Score (SSS)

Don’t attempt to sing two songs at once.

Ask ten random people at a company what the company does and chances are you will get ten different answers. With a strong and shared culture it is more likely that you will get the same answer, or at least something similar. A musical score is a sheet with the notations and lyrics defining the music. Like a well-rehearsed choir, you want an organization to sing from the same score.

You can already see the challenging dynamics of this statement. You don’t want people to just repeat from a manual, but then again you cannot run a business based on anarchy without shared ambitions. It is good to have a shared idea about what kind of client value you deliver, if you are a business, and then let people be creative about how to deliver it. Think of it as ‘mixing around a bottom-line beat’.

In one company, the bottom-line beat was defined as delivering ‘the best user experience’. An innovative organization then came up with a range of innovative methods, tools, pricing models and technologies to achieve it.

To sing from the same score in a business is not to do exactly everything in the same way, but to have a shared idea about the purpose of the company. In a choir, the tenors and the baritones will not be singing the same notes, but they will be contributing to the overall harmony of the piece.

If you ask, ‘Why do we exist?’, and answers range from ‘the best user experience’, ‘great selection of products’ and ‘low prices’ to ‘profitable growth’, ‘happy customers’ and ‘return on capital’, then you are not really singing from the same score.

Different individuals and departments can have different scores. Maybe the company’s COO is singing the score of delivering operational performance and cost efficiency. An important sub-score, but taken to its extreme it might support the COO’s goal, to deliver cost efficiency, but not the goals of the CEO, who is singing the score of growth. As a consequence, there is no harmony in the company. They do not sing the same score.

An innovative company can sometimes be confusing because there are many scores to sing from, people are singing from different scores at the same time, and sometimes even fighting about what to sing. Imagine going to a concert and finding the musicians arguing over whether to play Mozart, Bach or Jesus Christ Superstar and eventually playing whatever they want. Looking in from the outside on a company like that can be painful. Working in that company even more so!

The solution is not to immediately kill off the new score but, if possible, to find its own context, spinning it off as a separate company, team, department or business unit – the right entity where people are comfortable singing the same score together. The people who want to sing Mozart can do that, and the people who want to perform Jesus Christ Superstar can form their own choir. Here is another example when there can be a potential conflict between Formal and Mindset Leaders. Possible solutions include mutual respect for roles, a strong and shared culture, a clear and common vision and interconnected sub-cultures.

In the early 1980s, when Apple developed the Macintosh computer, Steve Jobs made sure that his Mac team could sing from their own score, while the rivalling Lisa team, that developed a different computer, could sing from theirs.

#065 Interconnected Sub-Cultures (ICS)

Encourage different cultures and bring them together.

In any given organization, there is never just one culture. Sure, there is probably one overall shared culture, but within it you will find sub-cultures. The sales team has its own culture and jargon based on selling to customers, the engineers’ culture is about delivering reliable code, and the finance department’s culture might reflect cost-consciousness. In the family the culture of the dad will be somewhat different from that of the teenage son, even if there are shared guiding values, such as sitting down at the dinner table together.

Sub-cultures are good. It means that there is a strong culture at the practical level, a culture around a certain objective. If you have an overall culture, it must break down into sub-cultures suitable for the task at hand.

There is a hierarchy of cultures, if you wish, ideally functioning together in harmony:

• The culture of the society we live in, for example ‘Democracy’.
• The company culture, for example ‘Service’.
• The sub-culture of the sales department, for example ‘Performance’.
• Your individual culture and values, for example ‘Caring’.

Sales people, engineers and accountants are different and have different cultures because they have different tasks and objectives and thereby pragmatic cultures with the aim to support those objectives.

As a leader, there are two things you might want to do:

• Nurture these sub-cultures, as they are important and usually constructive.
• Interconnect them, to enable people to share and learn from each other.

An organization with separated sub-cultures can be destructive. I have seen companies where departments sit side by side in an office (since I mostly work with small companies and start-ups) – Sales, Systems development, Finance, Business development, Fulfilment, Marketing – each with its own completely different sub-culture, and with no understanding of the other sub-cultures in the company. For example, the engineer had no insight into the everyday work of the sales person, who in turn didn’t understand what the engineer was doing and how that department worked. One immediate downside, in this example, is that the sales people will sell solutions that the engineers cannot deliver, and the engineers in turn regard the sales people as stupid and ignorant. (See Check Before Promise #033 CBP.)

There can also be arrogance, rivalry and conflict between sub-cultures because they have slightly different and colliding objectives, or they fight for the same pool of capital resources.

So you have everything to gain from finding ways to interconnect and integrate the sub-cultures, make them communicate and grow with each other. Here, the non-formal Mindset Leader plays an important role. In every company there are people who bring the company together by organizing parties and table tennis tournaments. On the more formal side, inviting each other to department meetings is a simple way to connect sub-cultures and enable learning and understanding across the organization.

#066 Celebrate The Success (CTS)

Build on victories.

It’s an easy thing to do – celebrate when there is something to celebrate! Still, it is often forgotten. To celebrate the success is like bringing The Dolphin School (see #048 TDS) philosophy (rewarding good behaviour rather than punishing bad behaviour) to the company level, inviting everyone to celebrate success. It is quite powerful.

I always look for reasons to celebrate and will find even the slightest excuse to pop open the champagne. It is not only because I like champagne but because success is built on success, and you want people to notice it when it happens. It is also fun to celebrate, and allows the company a welcome break.

Swedish football (soccer) player Henrik Larsson has a long career in European football, winning the UEFA Champions League for Barcelona in 2006. Henrik has described how soul-destroying it can be when success is routinely expected of you, and you are never better than your last game. After winning a game, or even a final, you celebrate the success for one night – but on the following Monday it’s all about winning the next game. Any previous victory is irrelevant, it does not matter, it’s all about the next one.

Your job is to deliver success, and you know that the moment something is achieved, the focus instantly shifts to attainment of the next goal. Still, nobody would argue that it is pointless to celebrate one achievement because it’s just going to be replaced with another. It is human nature to take a moment to acknowledge the feat before moving on.

Celebrating success means not taking it for granted. Success is usually the result of countless hours of hard work put in by good people. Acknowledge and praise that effort, and be thankful. Success should never be routine, even if you expect winning to be the norm.

#067 Value Based Organization (VBO)

Shared values are at the heart of a culture.

A strong culture is based on a sense of pride: the people who feel they belong to the culture are proud to be part of it. As we have seen, culture is also a collection of beliefs, values, norms, laws and customs that guides behaviour. Cultures exist on many levels: countries, companies, clubs, non-profit organizations, churches, and circles of friends, on- or offline.

A social network like Facebook is a platform where users can express whatever opinion, value or belief they may hold (provided it doesn’t violate the terms of use), so you wouldn’t say it is a culture in its own right. Nevertheless, Facebook has a culture that governs how people comment on things, update information and signal approval of any material that has been posted. The moment people get together to do something, a culture or a standard for behaviour arises in some way or another. It can either be deliberately produced in order to achieve a certain objective or it can evolve on its own.

To make it simple, a culture is based on values that guide action according to a ranking order:

• Values
• Culture
• Actions

The central component of the culture is the values, and that is why it is more relevant to talk about a value-based organization than a culture-based organization. The culture is easier to understand if it breaks down into a few easy-to-understand core values. The point of each value is then to guide actions and behaviour.

It is worth repeating that culture is behaviour. If you have a culture, perhaps defined in nice words and slogans, but it does not guide how you behave – it is worthless. For example, if the culture of a bank is to ‘deliver outstanding performance’ it might be too broad or general to guide specific action, the ‘deliver’ part, and fail to define what actually is ‘outstanding performance’. And what are the underlying values? For example, can you use any means to deliver performance, or should you do it in an ethical and sustainable way? That is a typical question that values can guide.

To be useful, make sure that your organization’s values are:

• Actionable and specific, possible to act on
• Accepted and regarded positively
• Shared and understood by all
• Defined together, not by some distant committee
• Simple and clear, easy to remember
• Something to be proud of, and meaningful
• Updated as the organization and the world outside evolve

The last point is crucial. Many organizations have suffered when a strong culture with solid values is no longer in tune with society and the people the organization wants to employ. The army, in many countries, is one such old institution that has had to adopt and change some values as society has changed.

#068 The Main Thing (TMT)

Build the company around one main value, if nothing else.

In a company, if you were to choose only one core value, what would you choose? The ultimate goal of leadership is results, so it would have to be something that you have identified as the ultimate driver of results. The Main Thing also has to be meaningful for the people working with it.

If you ask the successful online retailer Zappos, the answer would come quickly: customer service. Zappos has aligned the entire organization around one mission: to provide the best customer service possible. They call it the ‘Wow philosophy’.

If you ask the United States’ Marine Corps, their core value is Semper Fidelis, which is Latin for ‘always faithful’, their motto since 1883. This guides the Marines to be faithful to the mission, to each other, to the Corps and to their country.

For the restaurant chain Papa John’s Pizza, the core value is the quality of the product. This is how the company defines its focus: ‘We must keep The Main Thing, The Main Thing. We will consistently deliver a traditional Papa John’s superior-quality pizza.’

At Valve, the game developer, The Main Thing is hiring. This is how it puts it in the employee handbook: ‘Hiring well is the most important thing in the universe. Nothing else comes close. It’s more important than breathing. So when you’re working on hiring – par­ticipating in an interview loop or innovating in the general area of recruiting – everything else you could be doing is stupid and should be ignored!’

Swedish Radio Channel 3 (P3) has a simple mantra: ‘We love new music.’ They repeat it endlessly, which is good because the listeners understand that they will only hear new music (no oldies here) when tuning into P3. The staff focuses on new music, the culture around new music is reinforced in the organization, and above all we all get to share the passion that comes with ‘loving’ new music. The major thing at Swedish Radio Channel 3 is new music. Nobody will miss it.

A Value Based Organization means three things for me:

• It’s based on core values and beliefs.
• It’s focused on the value it provides to its stakeholders, such as customers.
• It’s based on a belief and formula for how the company makes money.

To better understand what kind of culture you want to be part of building, figure out what is The Main Thing, as they say at Papa John’s. Another way to look at it is in terms of the customer ‘delight’, which has more dimensions than just ‘value’, as described by Lena Ramfelt, Jonas Kjellberg, Tom Kosnik in Gear Up.

My main thing, in my companies, has always been ‘customer value’, whatever the business. The purpose of the business is to deliver a tangible or intangible value that is perceived by the client to be higher than the cost for the service or product. If the customers do not think they get value for money, and can getter value elsewhere, the business will soon be gone. This price/value calculation is an always-on process in the back of the customer’s mind. Of course, the customer value perspective has to be balanced by the company value perspective: the cost and benefits to the company of delivering that value to the customer. Too much cost in delivering the product or service will maybe make the customer happy but the company unprofitable. Too much emphasis on the company’s results might reduce focus on customer value and decrease quality delivered.

This perspective – the balance of the customer’s and the company’s value – is the essence of business and a guiding value in my work. The term value can relate to both benefits and beliefs. Both are important, and they go hand in hand.

#069 Name The Culture (NTC)

The clearer the culture, the better.

To make the organization’s culture even easier to remember and relate to, give it a name like the ‘Wow philosophy’ at Zappos. A culture is always best described by the core values it is made of, so give the values names, too. Make them memorable and fun. Make them important, and live by them. As a rule, have a few values, not too many.

At Keybroker, we called it the ‘Try Us Culture’ since we wanted customers to experience how our performance delivered value, and defined 11 core values. We thought the number 11 was less corporate than the even 10. The downside of 11 core values, though, is that they are too many to remember. Try to limit your core values to around three.

The foundation of the culture was the ambition to deliver real client value from online marketing and focus on results, while providing a rewarding and fun work environment. The culture, that was already in the air, was defined during a few sessions with a cross-departmental group.

The process to work out the culture was simple:

The strength of the process was that it was genuinely ‘bottom-up’, or more precisely, flat. It evolved from the grassroots of the company. Now it was just a matter of starting to live the culture and speak the language, which is just as important. This is the culture that we presented on the website as the 11 core values, both for our employees to enjoy and as a way to present the company for the people we were looking to recruit. Each core value was defined with a short paragraph to make it comprehensible. Just to reiterate: 11 are far too many to remember, it should be three (see Stick To Three #094 STT). However, we never bothered to boil it down, so here are the 11 core values as headlines.

For example, after each interview with a new recruit, we asked each other: ‘Is this a Buddy with Brains?’ If yes, we knew that we had found the right person for the job. That is how a culture guides actions. It becomes The Operating System (see #063 TOS).

One final point. Do you really have to capture the culture in words to make it work? Some of the most successful and admired companies in the world don’t. Apple, Google and Facebook do not have formal, defined, clearly stated cultures, as far as I know. But do they have a Main Thing? Yes, I would say they do. Apple is about amazing products, Google is about the user experience and Facebook is a social utility that ‘helps you connect and share with the people in your life’, always for free. Written and articulated in a statement or not, derived through a thorough democratic process or not, a culture that has got a name or not – either way, you had better be clear on the values guiding your organization.