Leadership

Company Culture: By Design or Default?

A company’s culture has a significant impact on attracting and retaining good employees, boosting engagement, and achieving a strong bottom line.

Over the years, I’ve had some interesting conversations with clients regarding their company’s culture. I remember one client (someone I was helping to groom as the owner’s successor). He told me how much they value their culture. Not only that, but they felt very strongly about “hiring to their culture”. In other words, they made certain that every new hire understood how important the company’s culture was.

As an executive coach focused on effective leadership, these statements were music to my ears! I naturally asked him, “So, what IS your company’s culture?” AND HE HAD NO ANSWER! It turns out, when they speak to new hires about culture, they simply tell them that their culture was important but offered no guidance as to what that was or what it meant. So, I gave him an assignment to better define their culture and reduce it to a handful of statements.

In our next coaching session, we discussed the list of values and behaviors the company strove to live by. We spent that session refining and clarifying the list so he could better express what mattered to the company to new hires and so he could better hold employees accountable to those values and behaviors.

I had a very different conversation with another client (the president of a company). This client had very clearly defined their culture and made sure that new hires were aware of it. But there was a problem. In fact, it was a major problem.

You see, most people think that a company’s culture is defined by the values and behaviors a company aspires to. That sounds great and makes sense. Except it’s not true…

A company’s culture is defined by the values and behaviors the company tolerates.

And who does that tolerating? The leaders do. The values and behaviors that the leaders tolerate become the company’s culture. But it doesn’t end there. It gets worse. When a leader professes to value a behavior but acts in a manner at odds with it, it demonstrates a lack of integrity. And when a leader is seen to lack integrity, people stop trusting and lose respect for that leader. And when people lose trust and respect for a leader, engagement drops and productivity suffers.

And that’s exactly what was happening at his company. Even worse, my client was as guilty as anyone in the company, acting at odds with the stated culture. Nevertheless, he couldn’t understand why they had so much trouble making progress and holding people accountable. Consequently, we began strategizing about how to change his behavior and the behavior of other leaders within the company.

So, here’s the bottom line…. A company’s culture needs to be defined. A culture that exists by default is always inferior and leads to lower engagement. And although a defined culture is superior to a culture by default, it only works when the leaders live by those values and behaviors. Plus, those leaders must not tolerate non-aligned behavior by others.
A positive, well-defined culture that people live by will attract better employees, and will result in stronger engagement and improved profitability.

How to Make Smarter Decisions

As a leader, you’re regularly making decisions that affect your organization. Good decisions drive profits and engagement. Poor decisions, on the other hand, cause disengagement and erode profits. Granted, we all make mistakes. But our goal is to minimize missteps and make the best decisions possible.

And while intelligence, education, and experience are important factors in making smart decisions, there is another factor that plays a significant role in the quality of those decisions.

That factor relates to stress.

First, let me explain why and how stress affects our decision-making, and then explore what to do about it.

The brain is made up of three parts – the reptilian brain, the amygdala, and the neocortex. (Yes…. I know I’m oversimplifying things.) The reptilian brain controls our autonomic functions – things like breathing, heartbeat, and digestion. The amygdala is the emotional center of the brain. It’s where emotions are processed and where the “fight-or-flight” response resides. And the neocortex is where logical thinking and creativity take place.

When we’re under stress, the amygdala starts to take over. And if the stress increases, our fight-or-flight response kicks in. This hard-wired response developed when we lived in an age when we were often faced with real life-or-death situations. It was important to make an instant decision. Fight to save yourself or flee to save yourself. We didn’t have the luxury of thinking things through. Hesitation could prove fatal.

Therefore, to cause us to make an instant decision during high stress, the body cuts out the neocortex. It essentially keeps us from thinking.

We’ve all seen examples of this dynamic in action. We’ve seen someone who – under pressure or stress – can barely form a sentence, let alone make a smart decision.

That’s why being under stress hampers our decision-making abilities.

As for what to do about this, the obvious answer is clear. Avoid or reduce stress. But as you know, that’s often easier said than done. Things like eating better, getting restful sleep and exercising will all help alleviate stress. But we’re still going to experience stress. There always seem to be stress-causing issues in our life.

There is, however, an interesting strategy for minimizing the number of stressful situations you need to deal with as a leader.

Over my years as an executive coach, as I’ve helped my clients become more effective leaders, I’ve asked them to draw out the following diagram:

After they’ve created this matrix, I’ll ask, “Ideally, in which quadrant do you want to spend most of your time?”

The majority of my clients tell me that ideally, they should be spending their day on important and urgent matters.

And then I’ll ask them, “What do you call matters that are important and urgent?”

The answer, of course, is that we call urgent, important matters “fires”. I’ll point out to my clients that they just said that in their ideal world, they’d like to spend the majority of their time putting out fires! (Which of course, produces lots of stress.)

If you’re spending your days putting out fires and you’re under constant stress, you can’t think clearly and you’re unable to make the best decisions you’re capable of making.

How do you get off this “hamster wheel” of putting out fires?

Obviously, you need to first put out the fires. After all, they’re important and urgent. The key is what happens next. Once an urgent matter is addressed, it is essential to carve out some time to step back and reflect on the answer to the question, “How can I prevent this from happening again?”

In other words, the key to clear thinking and smart decision-making is to address the important before it becomes urgent. Only by giving thought to this can you – as a leader – get off the hamster wheel of putting out fires.

In order to facilitate clarity of thought, I recommend getting out of your work environment. Get away from the computer and get away from the office. Take a pad of paper and go somewhere. For example, go to a coffee shop or a park or even your backyard. You’ll be surprised at the clarity of thought you’ll get. (It’s something I do every day.)

And as you begin to address important matters before they become urgent, your days will begin to quiet down. And as your days begin to quiet down, your discretionary time increases.

And as your discretionary time increases, you’ll have more time to think about other important decisions, develop better strategies, and clarify your vision for your team and your organization.

Strategies to Lead Effectively in a Hybrid Work Environment

According to the Gallup Organization, the future of the office has arrived … and it is hybrid. In 2019, 60% of remote-capable employees spent their week working fully on-site, but that figure fell to just 20% in 2023. Hybrid work has increased significantly, becoming the most prevalent work arrangement in most offices. Approximately 40% of remote-capable employees have shifted from working entirely on-site to either a hybrid or exclusively remote work arrangement.

Let’s face it… the Hybrid Workplace is here to stay. And if handled effectively, it can be an excellent business model. Besides the obvious advantage of requiring less office space, it can also have several other significant benefits.

If leaders properly modify how they lead, it will increase productivity (sometimes significantly) and it will increase employee engagement. And an engaged workforce results in lower turnover and greater loyalty.

The question then, is what do leaders need to do in order to achieve these desirable outcomes?

Leaders need to address and modify how they interact with their direct reports.
And they need to implement initiatives to enhance team cohesiveness and collaboration.

One-on-One Initiatives
The interesting thing about the one-on-one initiatives related to a hybrid work environment, is that they’re the same initiatives a leader should be taking with his or her direct reports regardless of whether the work environment is hybrid or not.

Individual productivity and engagement rise when professionals are treated like professionals.

Treating professionals like professionals reflects the fact that someone who is a professional wants to do a good job in a timely fashion. They don’t need to be micromanaged or watched over. They don’t do their work because the boss is watching. They do their work because the want to do their work. And they want to do it well. It’s one of the reasons working remotely can be a positive force for increasing productivity.

But there’s an art to granting autonomy.

The first step is that it’s imperative that people are clear about what is expected of them. I’m not just talking about delegating a task to someone. (Although these insights apply to that as well.) I’m talking about the bigger picture. It’s critical to clarify the deliverables and responsibilities of each person’s role. Defining deliverables and responsibilities can be more difficult than it sounds, but it is critical for driving productivity and engagement.

Once the deliverables and responsibilities are defined, it is essential to hold people accountable. Not only does accountability ensure the work gets done but demonstrates that their work is important.

The final piece to this initiative is that there must be a consequence for not performing. If a leader states that certain deliverables and responsibilities are important, but then accepts non-performance without any consequence, it demonstrates a lack of integrity on the part of the leader. Plus, of course, the work doesn’t get done.

Why In-Person Matters
Although working remotely can have a strong positive impact on personal productivity, remote work can have a strong negative impact on a team’s productivity. Certain dynamics can only take place face-to-face. And that’s where video interactions fall short. For team members to work well together they must know, like, trust, and respect one another. Building trust and respect, along with having team members know and like one another, plays an important role in the success of a Hybrid Work Environment.

Trust, respect and connection foster team cohesiveness and collaboration.

And although some degree of trust and respect can be earned through knowledge and performance, most people form opinions about others based on what I call, “Moments of Apparent Insignificance”.

“Moments of Apparent Insignificance” are the little things we do or say without giving them much thought. These actions – to us – are relatively insignificant. We simply do those things or say those things in passing. But people form opinions about us based on those insignificant moments. They make note of the little things we do and say, along with how we do and say those things.

As people get to know one another, they learn about their lives, their personality, their dreams, their goals, and their fears. They get to know and (hopefully) like one another. And through these interactions – both professional and casual – they come to trust and respect one another.

Trust, respect and connection foster team cohesiveness and collaboration.

But in order for these Moments of Apparent Insignificance to occur, team members need to spend time around one another. Not structured time, but time when they can just be themselves.

And that’s where the team initiatives come into play.

Team Initiatives
Simply having people come into the office 1 or 2 or 3 days a week generally won’t achieve team cohesiveness. Because people are used to working independently, you need to have one or more techniques for maximizing interaction – both professional and casual – among the team members.

Here are three ideas for encouraging interaction on the days when each team is on-site:

1. Conduct Strategy Sessions with Whole Team
Conduct a strategy session with the whole team. It allows people to display their creativity, and everyone can see how various people interact. Not only that, but you may even uncover some interesting solutions to problems!

2. Encourage Project Brainstorming
Form teams of 3-5 people to brainstorm the design and execution of a project. (Vary the team members with each project.) This creates an opportunity for several people to get to know one another more deeply, eliminates posturing in front of the entire team, and allows team members to be more open and relaxed.

3. Hold Team Lunches
Plan a lunch for your entire team every 1-3 months. Organize it so that everyone can be in the same room. Ideally, you’ll want to hold it on-site rather than at a restaurant. People will feel more comfortable, and the casual setting will encourage people to mill around. It’s a great way for team members to get to know one another more casually and observe those Moments of Apparent Insignificance.

Conclusion
In conclusion, a Hybrid Work Environment can be an excellent model for increasing productivity, boosting engagement, and lowering turnover if handled correctly by the leaders. The results rely on leaders granting autonomy in an effective manner and implementing initiatives to ensure face-to-face interaction.

Executive Effectiveness: Stop Setting Goals

Over the years, I’ve seen this scenario over and over. An executive decides they want a real boost in growth and profits, so they set a big goal for their organization. Or, if they’re really ambitious, they develop a “BHAG” (a Big, Hairy, Audacious Goal).

Then they rally the troops, announce their big goal with lots of fanfare and encourage their team by proclaiming they are confident it can be achieved.

The pronouncement is then followed by a cascade of meetings at all levels, during which it’s explained how the goal can be accomplished, thereby ensuring buy-in throughout the organization. Strategies and tactics are developed in each department so that there is a clear blueprint for success in place. And the initiative begins…

The problem is that the goal is rarely reached. Despite all the hoopla and slogans, despite all the detailed plans and projections, and despite all the accountability, results fall short. Why do these initiatives almost always miss their target? Why are these goals not met? The answer is simple.

A “goal” has no emotional component to it.

If you understand people and how they make buying decision, you also understand that people buy emotionally. This holds true whether we want someone to buy a widget or buy an idea. We are emotional creatures and are prompted to action by emotion more so than logic. Yes, we rationalize our decisions logically, but the decision is made emotionally.

Although an initiative may have a well-developed plan, trying to get people enthused about a big goal is like asking people to get excited about doubling sales. No one cares. (Except the owners/shareholders and the person who came up with the goal). It’s unrealistic to expect an enthusiastic, committed response to a cold, arbitrary goal.

In order for something really significant to be accomplished, people need to work diligently towards its attainment. They need to maintain their commitment to it in the face of obstacles and setbacks. The only way to achieve that state is for everyone to “buy-in” to the initiative. And as I noted, people buy emotionally.

Therefore, if an executive truly wants a team to get behind an initiative and really strive to achieve it, the initiative must have an emotional component. There needs to be a compelling “why”. An effective initiative has to embrace a meaningful reason for the pursuit of it. Only then will the efforts be persistent enough to reach the objective. And, if the initiative is well thought out and relevant, the tangible “goal” will almost always be attained as a consequence of the quest.

An example of an initiative with an emotional component might be something like: “We want to be known in our industry as the premier provider of custom solutions. We want to set ourselves apart from our competitors by developing creative solutions for the difficult problems faced by our customers.”

This is an initiative people can get behind, rally around, and take pride in achieving. Also, because the initiative is a way of being rather than the attainment of an arbitrary number, the nature of the strategies and tactics developed will be very different from those created simply to drive sales in the next quarter. Additionally, because it will create a fundamental shift in the way the company does business, the results will be longer lasting.

If you want to be an exceptional executive, get away from setting goals and start developing meaningful initiatives.

The Enemy of Effective Execution

There are a lot of smart people in the business world, and they come up with plenty of good strategies to grow revenues, gain market share, increase productivity and improve profitability. And they usually create a plan which details the tactics that need to be executed in order to achieve that strategy. But as we all know, there is a big difference between creating a good strategic plan and executing it effectively.

The strategic plans that are developed generally make sense, but often get derailed by a couple of realities. To begin with, a new strategy often requires a change in perspective and a change in direction. It is essential that everyone on the team makes these shifts. In addition, a sense of urgency is often needed to achieve the objective of the strategy and gain the advantage the strategy offers. This urgency requires a certain amount of intensity and persistence.

And if those realities weren’t challenging enough, the final truth is that the business landscape is perpetually changing. The specifics that make sense at the start of execution may no longer make sense as the plan unfolds. In order to keep things moving forward smoothly and quickly, plans sometimes need to be changed and tactics modified. New, creative solutions need to be developed to overcome obstacles that arise. Attitudes must remain positive in the face of difficulties. With the right team in place, these strategies can be executed.

But to be executed effectively, there needs to be one more important piece in place.

One more piece needs to be in place, because the enemy of effective execution is a disengaged workforce. A poorly engaged workforce won’t be as flexible as it needs to be. A workforce that isn’t engaged won’t be especially productive, nor will it be as persistent as it needs to be. Weak engagement also causes people to focus on obstacles rather than solutions, and it dampens the creative spark needed to solve the problems that arise.

The enemy of effective execution is weak engagement.

How do you elevate employee engagement? Unfortunately, employee engagement can’t be improved overnight. Improved engagement is something that needs to be attained well before the need for execution exists. It’s analogous to digging a well for water. The best time to dig a well is before you need the water. Additionally, engagement is not something you “do” to employees. Instead, it’s the result of effective leadership and an effective culture.

If you’ve hired correctly, people are already engaged when they come to work for you. They don’t need to “become engaged”. The key to high employee engagement is to avoid the disengagement that occurs when leaders and managers treat people poorly, when they don’t respect and value people, and when they treat people like “things” rather than like people. Conversely, effective leadership and culture will keep a team engaged and will bring out the best in people.

Strategies can be effectively executed, but it takes an engaged workforce, focus, persistence, flexibility, creativity, and a desire to succeed. If you’d like help evaluating the current state of engagement within your workforce or would like help setting the stage for effectively executing your strategies, please contact me.