Walking the Talk

Some business leaders are visionaries.  Most are pragmatists.  The visionaries may invest in building the best culture because they know, long term, that to leave a great cultural legacy is a gift to the future of the company.  They can see the return on investment.  The pragmatists need more help to see this.  If you are an HR professional or a consultant, you can help them.  Here are four tactics I have found work well.

1. As future strategy is developed, targets set for the year and current performance shortfalls analysed, ask the questions again and again: 
“What behavior is required to achieve this (different from present behavior)?” (future looking)
“What behavior contributed to this problem” (past looking)
The purpose of culture is to support the behavior you need, so being really clear on the link between behavior and performance is essential.

2. Build the business case around the cost of not managing culture through a disciplined process , given the link between behavior and desired performance.
What will be the revenue impact of the lack of a specific behavior.  (For example, collaborating across boundaries to cross sell and better serve customers)

3. Remind business leaders of any public statements they have made about values and behavior.  Where there has been good communciation, the riks of no change are higher.

4. Demonstrate small quick wins with work focused on changing the behavior in one team, measuring results.

Do you have others?

I imagine if you are reading this blog you hold the belief, as I do, that the right culture will have a positive impact on a company’s performance.  So here’s an opportunity for all of us to put our money where our mouth is.  Where do you invest your money? Here is an article in The Motley Fool which lists companies considered to have great cultures with details of their shareprice and encourages investors to consider the culture of a company when buying its shares.  The article highlights that Warren Buffet has stated he is going to stay with his company until he dies because he recognizes the importance of Berkshire Hathaway’s culture.  Maybe some lessons there about succession planning and how to transfer culture after a change of leadership, but that is for another blog!

All part of the signals that culture is becoming more valued in the corporate world and the investment community.  I dream of the day when metrics on culture are widely viewed as the lead indicators of a well performing company.  My work in several banks in the past years has convinced me that certain cultural indicators can easily be linked to the level of difficulties they got into last year, and their level of contribution to the global financial crisis.  Those that have emerged least scathed are those whose culture emphasized values of stewardship (for those who come in the future) and really considering the client’s long term interest.  These values are bedded in the behaviors reward systems of some institutions, and not in others.  There is always an opportunity to increase the strength of these values in the organizations in which we work.

Imagine that your culture supported an environment where individuals, teams and the organization as a whole consistently achieved what they set out to achieve.  Imagine if you yourself could have that confidence.

Some years ago, wanting to help clients build a performance culture, I studied the work of David McClelland, Harvard professor of psychology and tutor of Daniel Goleman, researched extensively the achievement motivation, the make up of those people who were driven by the satisfaction of achievement.

What I found surprised me, because it was different from much of what I saw talked about under the banner of ‘performance culture’.  For a start the word ‘performance’ conjures up the image of performing for someone else, of putting on a show, whereas achievement is much more centred on the satisfaction of the individual concerned.  The ‘I did it’ feeling that we all feel when we accomplish something we set out to achieve.  I like that, I think it is more grounded and sustainable, and protected from some of the wild excesses of behavior and performance which has led to the world’s current financial problems.

Performance needs a subjective adjective to describe it – good performance, bad performance.  Achievement stands on its own two feet, based on the goal set.  That appealed too.

But fundamentally I was drawn to McClelland’s conclusions about the achievement motivation, and I have since built many programs which help organizations build these into their culture plans and leadership development strategies.  To simplify, there are five:

1.  The goal is totally owned by the individual.  Targets imposed without negotiation and commitment, directions and commands issued by email, a lack of engagement – these put their very achievement at risk.  They do not draw out the natural achievement motivation which every human being has when they feel totally committed to achieve a goal.  (Think of the child continually striving to take each new step of physical development).

2. Risk mastery.  If satisfaction is reached when the goal is achieved, then identifying and overcoming everything which could stand in the way of this achievement becomes of paramount importance.  In an achievement culture a lot of time is dedicated to the anticipation of risk, and to building plans to mitigate against risk.  When this achievement gene is missing in the culture, a lot is left to luck, chance, hope and magic.

3.Taking responsibility for solutions in the face of challenges.  The achievement culture does not support blame, justification, a victim mindset, denial and defensiveness.  In short, there is always a drive to see oneself as a part of the situation, and therefore a part of its solution.  This attitude leads to continuous innovation, improvement and problem solving.

4. Keeping score.  An organization or individual who is motivated by achievement is going to want to have really good ways of knowing if that is happening.  Achievemenet cultures use metrics as a mechanism to motivate and engage.  As well as measuring the outcome, they become a strategy for actually increasing the likelihood of achieving that outcome.

5. Intrinsic motivation.  The achievement motivation is a love of achievement, the thrill of hitting that target.  This is different from the extrinsic motivation of financial reward, pleasing others, recognition, which I see as more linked to ‘performance’.  When there is too much emphasis on these, and not enough on how to create an environment where people can repeated experience the thrill of success in its own right, behaviors can become dysfunctional.

As you can see, some of these ideas have a different emphasis than some work on performance, and I have engaged in vigorous debate with many clients on these points.  My experience is that an achievement culture will achieve a consistency of results over a long time frame, as well as high engagement.  I am very passionate about achievement, and will happily spend more time on this with you if you contact me directly.

Yesterday I flew American Airlines in an exit row.  The hostess stopped at our row, gave us a sweet smile and without drawing breath gave us her learnt speech about whether we were all aware of the responsibilities of sitting in this row.  Without pausing to hear our answers, she moved on to repeat the execise at the next exit row.  She did not reappear.  After she left, I realized I did not have my seat belt fastened, and my neighbor was listening to music on his headphones.  This woman was not motivated by a deeply held value of safety, she was following a procedure.  A person who cared about safety would have noticed my unfastened seatbelt and asked me to do it up.

It is impossible to build a great culture through procedures alone.  People have to hold values deeply enough that they will act on them even when there is not a procedure.  It how someone acts in those spontaneous moments that allows you to see how deeply held their values are.  If you care enough about customers to select ‘care for customers’ as one of your values, you want your people to hold that value deeply enough that they will choose the most caring option at all times, even when there is no prepared procedure.

Do you have any friends who work for one of the big mining or oil companies?  I do, and they are obsessed with safety.  I can be with them on the weekend about to set out for a drive, and they will point out something dangerous about the driving conditions.  They have safety embedded as a deeply held value and they learned this at work.

I have seen people’s values strengthen as a result of steady efforts by their organization’s leaders to achieve this.  The work follows the lines I covered in recent posts:

• Find the employees who already hold the values very strongly
• Put them in positions and in situations where others experience how they think and act
• Recognize values led decisions whenever they occur, especially if they involved some short term sacrifice
• Tell stories continuously about heroic values led actions you have seen
• Ask for frequent feedback about your own behavior

Strengthening an individual’s values takes time – there is often a lifetime of carelessness or unconscious behaviour.  To really get serious about values requires being conscious, awake and alert.  That’s why doing it together with others makes such a difference.

Showing my bias now, I do find that type of behavior at British Airways and at Qantas, with whom I also fly.  I believe they have done many years of training on safety, and have reached the stage where their employees live safety, beyond the script they are expected to follow.  That’s the difference.

The leader casts a long shadow.  Leaders I meet tend to underestimate the length and breadth of that shadow.  It impacts not only those they come into direct contact with, but also the broader culture, because a leader is seen to be a symbol of what is valued in that the culture.  A leader starting to travel coach when previously she traveled at the front of the plane has far greater impact than the sum of money saved on the tickets.  A leader who asks to visit some customer sites when he visits a regional sales office has far more benefit than impressing that particular customer.

Understanding the level of your personal impact means understanding these flow on effects as well as how you impact the people in your immediate sphere of influence.  Doing this well means you need good feedback.  And 360 degree surveys do not usually capture the nuances of how a leader’s actions cast this deeper shadow. The best feedback comes from people who can see the shadow you are casting.

Some people reading this blog are either HR professionals inside an organization or, like me, consultants and coaches serving their clients.  I believe we can all add so much value if we are able to help describe to a leader the shape of the shadow that he or she casts.  I like to keep this image in mind whenever I am interacting with a client.  I hope you might find it useful too.  Hold these three questions in mind.

1. What is this leader doing which will be viewed and interpreted by others?
2. What meaning might these others attibute to what they see, beyond the immediate action?  
3. What different actions would signal new priorities and values?

I spend a lot of time these days talking to leaders who are doing good stuff with their culture. Always I try to ask the question, “what have you learned that you would do differently next time?” Nine times out of ten,the answer comes back “I would act faster to get the right team around me”. (Check out this YouTube clip where I talk more about this). And they are not just talking about people who can drive performance. They are also referring to people whose behavior lines up with the culture they are intending to build.

I have spent my career helping people to develop and grow so that they are able to display the behaviors that will lead to the best contribution to their organization. So it’s taken me a while to get my head around this answer. What about giving people the opportunity to grow? What about believing that people can make it? But leaders do not have a long time frame in which to make a positive impact on performance. And  changing culture is not the quickest goal to set yourself, although it is the most long lasting. So there just isn’t that much time. People who don’t line up with the culture you need do damage on several dimensions.

1. Their own behavior is disruptive to the people who come into direct contact with them
2. Stories about their behavior spread through the company, and reinforce the message that whatever the ‘talk’ about culture, the ‘walk’ is that you can get away with bad behavior. So their presence slows down your culture change.
3. Not making a move on these people send the message that you are not serious, and that the leader personally does not have the courage to act in line with his or her cultural aspirations.

With all of that, taking action becomes the obvious move.

So what is the best timing? Let’s say you go out with some strong communication about the expectations of behavior. And then you put in place development activities – assessment, training, coaching, etc. In this way you set standards and give everyone a chance to meet to those standards. Some people will really change, and perhaps some you would not have expected.  All this will probably take a year. My rule of thumb is that acting on people whose behavior is not lining up should occur at around the one year mark from when a new leader arrives, or an existing leader articulates a new strategy and set of cultural expectations.  Some of my clients would argue for an even shorter time frame.

I will go so far as to say that, unless you take a couple of these decisions around this point – or earlier – you lose credibility, accusations of not walking your talk abound, and the culture change process more or less grinds to a halt.

In every successful culture change initiative I have seen, around 25% of the leadership population do not survive. Some are removed, others choose to go.

Sobering….but exhilarating as you seen the acceleration that occurs from the moment these people leave.

I am often asked for a summary of what I find are the factors which most influence culture. Understanding these is helpful for

• Building a plan to change an element of your culture
• Ensuring that you preserve precious elements of your culture if things are changing, such as in a merger or rapid growth situation
• Building a new site or move into a new geography

There are so many influences on culture, but here are my top 5

1. Behavior of key leaders. Any small change in behavior has a big impact. For example, if you are building a one-team culture, starting to ask people if they have consulted with colleagues sends a message that this matters to you.  Changing how you allocate time also sends a powerful signal.
2. Selection (including new hires), promotion and exiting of people, especially in leadership roles. Imagine you are goal is to become more customer centric. Hiring some new people who come from organizations known for their customer-centricity brings that mind-set into your organization, and sends the message that it matters. Promoting someone with this mind-set, and announcing why you did it, is very impactful too.
3. Reward system, including what gets measured to determine bonuses. Will you measure behavior? How much does this count to bonuses? Is the bonus system transparent? If customer-centricity matters, is the pool distributed in a way which rewards those who retain customers as much as those who win new ones?
4. Meetings – how they are run, what agendas, who is invited, when time is short what is cut, major rhythm-of-the-business meetings. If safety, or other HR matters are always the last agenda, and sometimes time runs out, what message does this send? For an stronger achievement culture, good meeting management sends a strong signal. Tighten up agendas with clear purpose for each item, improving clear decision making, following up on previous meetings.
5. Business planning process – strategy development, budgeting, cascade to individual objectives. Good process essential for an achievement culture. Cross functional dependencies are key to building a one-team culture. Selection of key metrics sends signals about what really matters.

Build a plan which addresses these five, enabling each to send a message about the behavior you want in your organization. If the messages from these five are aligned to what you want, your culture will match your aspirations.

You will notice that communication is not on this list. Communication is essential to establish the expectations (the ‘talk’ of culture change). But it is what is actually done, ‘the walk’ and how the business is run, which creates the culture. Walking the talk.

The moment I realized how misunderstood values were in organizations came around 15 years ago during a session I was facilitating with the top team of a resources company. It was in the early days of the green movement, around the time when caring about the planet was beginning to matter in the minds of some consumers. Green was moving from crazy, tree-hugging fringe into the main stream. The exercise to build company values turned to how the values would look in the annual report. “Care for the environment” was added as a late entry to the values list because “it’ll give us some good PR”.

Here was an organization who was about to get into trouble for not walking the talk. A value is something you believe in because it is the right thing to do. An end in itself. Not as a way to get good PR, make more profit, be liked by your boss or get out of trouble. Not as a means to an end. When a value is adopted because it is a means to an end, it will be dropped when there is another way to achieve that end which does not require adherence to that value. Or if, by adhering to the value, the end will not be achieved.

Many insurance companies have ‘care for the customer’ in their values statements. Yet the industry has had a reputation for including small print in its policies which exclude many claims. Over time this builds a reputation of being untrustworthy. What is the ‘right thing to do’ in these circumstances? A values based company will wrestle with this dilemma. Every decision they make which truly cares for the customer, even at the expense of their own short term profit, will strengthen their credibility as a values based organization, build customer trust and increase employee engagement.

Ah, I hear you say, but if they pay all those claims they will make no profit. Solving that problem is the job of management. Either remove ‘care for the customer’ from the values list and stop pretending, or find a way to be honest in your communication with customer so that they know exactly where they stand from the start. Is there a sustainable business to be made creating an insurance company people trust? The company that solves this will be the winner.

25 years ago, people would have said that adhering to strict safety standards would cost oil companies dearly in terms of profit. Yet today this industry leads the way in terms of values based leadership when it comes to safety. Looking after people’s safety really does come ahead of making a profit. And they have learned ways of making a profit, safely.

Are you values an end in themselves, or a means to an end? Unless they are an end in themselves, you will often be accused of not walking the talk. Which will lead to mistrust from both customers and employees. Step up and face the challenge. How can you hold your values, which matter to you more than anything, and make a profit?  Solve this, and you have a sustainable business.