Culture Key to Thriving in New Normal

Years after the Great Recession took hold of our economy, many  companies continue to struggle as they work to adapt to the “new  normal.” Shifting consumer attitudes, the rise of new technologies,  gridlock in Washington, the challenges facing the European Union, and  increased global competition complicate an already rocky road. Yet, I  have found that despite the obstacles, there are companies that seem to  keep pace with changing conditions and thrive. I believe a key factor in  their success is the ability to define, shape and continuously renew  their corporate culture in ways that allow them to adapt to the changing  environment and succeed.

A Pragmatic Approach to Building A High-Performance Culture

Early  in my career I learned that the concept of culture to drive performance  often led to complicated organizational initiatives that would die of  their own weight. Carrying out these initiatives lacked senior leader  ownership and a pragmatic approach to reaching employees. All too often,  the work of cultural transformation became hollow slogans, which failed  to align the “stated culture” with what employees experienced. 

Since then, experience has taught me that successful cultural transformation requires four essential ingredients:

• A  common definition of what culture is and why it is important, which is  shared by the organization’s leadership and ultimately the entire  organization;
• A culture that aligns with the organization’s  history, current internal and external challenges, and strategic  aspirations and plans;
• A team of leaders who expend the time and  resources to align the “stated culture” with the culture employees  experience in their everyday interactions. Leaders must be committed to  measuring the gap, and taking meaningful and visible steps to achieve  this alignment; and
• An organizational ability to renew and evolve the culture to meet new challenges.

Defining What We Mean by Culture

Because  company culture influences the way employees think, act and feel it is  important that they understand how culture is defined and why it’s  important. This is particularly true during times of great change.

In  its simplest form, I define a company’s culture as “the way we do  things,” which in practice translates to the values and behaviors we  will encourage, and those that will not be tolerated in the context of:

• How we interact with customers and other constituents
• How we conduct our business; and
• How we treat employees and each other.

Culture can enable or block achievement of business strategy

Depending  on how you define each element, your culture can help or hinder  business outcomes in areas such as: customer loyalty, product  innovation, market differentiation and crisis management. The  cause-and-effect nature of company culture should not be underestimated.  It touches all aspects of your business, your brand and reputation.

At  its best, your culture can be a source of inspiration, pride and  purpose for employees, which in turn can lead to greater productivity  and higher levels of performance. However, culture that is not aligned  with company strategy and not transparent to employees can lead to poor  decisions and performance issues over time. Involving employees in  defining your company’s culture is an important step in the process.

Leaders are the Architects of Company Culture

Building  a new culture should never be left to chance. As leaders, we are  accountable for shaping company culture and ensuring it is aligned with  business strategy. The management processes, policies and practices we  put in place will drive decisions and behaviors. For example, how you  hire, develop and reward employees speaks volumes about your company’s  culture.

In shaping culture, leaders need to create formal and  informal mechanisms that together help to develop a core set of common  beliefs and behaviors essential to a healthy culture. Formal mechanisms  such as organizational structures facilitate decision-making,  communication and workflow. Informal mechanisms such as peer-to-peer  interactions and networks encourage discretionary effort and problem  solving.

 We must also commit time and attention to measuring the  effectiveness of our actions and degree to which we are achieving the  desired outcome. You’ll know you have succeeded in transforming the  culture when the vast majority of employees say that in their division  or business unit their immediate supervisor behaves in a way that is  consistent with the “stated culture” of the company.

Company Culture Should be Regularly Renewed

As  a CEO, I have seen first-hand how companies can hang on to certain ways  of doing things while the world is passing them by. This is  particularly dangerous in today’s rapidly changing environment where  adaptation and innovation are essential to the long-term viability of  most businesses.

Leaders must guard against cultural stagnation.  Successful companies can be especially vulnerable to this predicament,  as they become complacent over time. I believe companies should undergo a  cultural refresh every 3-5 years by:

• Staying vigilant to external trends and conditions through customer outreach, research and data collection;
• Examining  “the way you do things” in the context of the external environment  through open, frank discussion with employees about what is working well  and why, and what needs to change; and
• Implementing  selective changes that preserve the strengths of your culture, while  mitigating its weaknesses. Renewing your culture does not necessarily  mean wholesale change. You’ll find that small adjustments are all you  may need to restore organizational vitality and position the company for  long-term success.

In the coming years, corporate America  will continue to face challenges in the new environment. Making sure  your culture is evolving in ways that will help your company thrive is  an important step in that journey.