Sunday, May 8, 2016
By: Tom Hinton and Barbara Yager, J.D.
Corporate Culture is the rug beneath the feet of every company. Companies have a culture whether they know it or not. It can be a culture that embraces your people and customers, or one that disempowers a company and negatively impacts their profitability. We see examples of both every day. Just look at high performance companies like Southwest Airlines and Under Armour versus volatile companies like Volkswagen and Takata who have lost their way.
To be a truly best-in-class company you need to consider the
5 Ps of Culture that form the foundation of every company’s culture. They are
Purpose, Principles, People, Process and Performance. In our forthcoming book, The Heart & Soul of Culture: How to Align Your Culture to Your Brand, we explore each of the five Ps and how to structure your business around them.
When we work with companies to strengthen their bottom line through a Culture Assessment, here are some questions we ask senior management to answer:
- What are the “Standards” set by management for your company? Are those standards practiced or are they just for show?
- What are the “Values” of your company? Does every employee at every level follow them? Or are there sub-cultures and silos that chip away at the values and derail you from achieving your potential?
- What are the “Attitudes” of your company? Attitudes always flow from the top down. Are people happy to work there and excited about working together? Or, is there an undercurrent of toxicity in the workplace that is poisoning your customer relationships? Is your company moving forward in a positive direction and growing its customer base? These are all attitudinal questions that relate to your Culture.
If you measured or assessed each of the 5 Ps, where do you think your company would rank?
There are four levels of Culture. Picture a square with four boxes inside it. We refer to it as the Culture Spectrum™. On the upper right side is the
High Performance Culture. On the upper left side is the
Balanced Culture. On the lower right side is the
Under-Performing Culture; and, on the bottom left side is the
Volatile Culture.
A company that has a culture that is not supportive of its efforts, where standards, values and attitudes are out of alignment has either an Under-Performing Culture or a Volatile Culture. Hopefully your company is not occupying that seat on our Culture Spectrum™. If it is, risk of all kinds and liabilities are sitting there with you.
It’s not hard to spot cultures that are out of alignment. There are many websites that can give you a glimpse of life inside a company. Glassdoor, Yelp, etc. You can read their reviews. It’s not just one or two bad reports that you should pay attention to, but rather, when you see many negative comments repeating the same thing about a company’s workplace environment or poor customer service, you form a negative impression. Customers and prospective customers tend to shy away from such companies. Executives need to understand there is complete transparency now with all the resources available via social media. You can’t hide your culture any more than you can hide your corporate warts or silence disengaged employees and unhappy customers. The mic of social media is always on!
How do you cultivate a High Performance Culture? You create a Culture Playbook™ that assesses current performance at all levels, establishes standards and values, trains your people to perform to those standards and values, and, finally, you frequently measure where you are and then you improve on it. It takes some work and focus to get there.
Culture is something that every company knows exists but few companies know how to harness its power and create “broadcast customers” or a cult-like following that companies like Apple and Google enjoy.
Also, there is a major shift that is taking place that relates to your Culture. It’s a harbinger as to why every major company must refocus its efforts on developing a High Performance Culture. The shift is audits. Companies must begin to focus on culture as an important aspect of business success because regulators and auditors are now defining your Culture as a way to evaluate your company performance measure its success. This monitoring trend has already started with companies that are in a fiduciary capacity to its customers. We are already seeing a request from their regulators to show how they monitor culture. The regulators want to know that what a company says they are doing – in terms of their Standards, Values and Attitudes — is truly present. In other words, auditors and regulators want to know if you are “walking your talk.”
If you were audited today, how would you score? If you would like more information on improving your corporate culture or creating a Culture Playbook™, we can help you.
About the Authors: Tom Hinton is a popular business speaker and author of five books. He serves as president of CRI Global, LLC, an international consulting firm based in San Diego, CA
Barbara Yager, J.D. is the Managing Director of the Center for Culture Assessment & Performance Systems (CAPS) at CRI Global, LLC, They can be reached at:
tom@CRIGlobal.com