Let’s begin by clarifying the term “culture,” then let’s talk about how to make one great.
It’s undeniable that at the root of what makes a great company great, is a strong culture. This can be validated by the great quote that is believed to have originated from leadership guru, Peter Drucker, “Culture eats strategy for breakfast.”
Much has been written about this hot topic. You can use Google and find thousands of articles and data to help you build a great culture.
There is so much information it starts to get overwhelming and confusing. Lets try to simplify it for you and encourage you to give this topic some serious consideration. What I am about to share with you is not theory, but is based on cold hard facts.
Some companies are great at building a strong culture, but most are not very good at all. I will provide you five ways to help you become great at it.
What is the definition of culture? Culture is defined by the way your people in your company act and how they treat each other and your customers. It’s how it feels when anyone interacts with your organization. If a consultant studied your organization, employees and leaders and how they communicate, what would they find? That’s your culture.
A great culture begins with your core values. Core values are your company’s three to seven essential and timeless guiding principles. When leadership defines a clear set of core values that you want to build your company upon and be known for, everyone in your company acts, speaks and lives by them.
How do you do this? First, you must define your core values. I assume you know your core values, but does everyone in your company know them? Can they point to specific examples of how the company lives by these core values daily? Perhaps your company is like most organizations, you have core values that were once written, but are rarely reviewed or discussed. Worse yet, you have not identified your core values, therefore leaving your long-term success to chance. Regardless of how you answered these questions the end result is the same: frustration, poor retention, poor production and decreased employee satisfaction to name a few.
With clearly defined core values you simply must (1) hire, (2) fire, (3) review, (4) reward and (5) recognize all of your people with your core values in mind.
Now we can leave it there, but we won’t. The following is a little deeper dive into each of the five with some how-tos. Please know there are hundreds of ways to do each of the five.
After we help each client discovery their core values, we have them create a core values speech. This is a simple document that helps every leader communicate your core values the exact same way. Once there is a core values speech, you must deliver that speech with passion to every potential hire. You must prepare them for what they are about to get themselves into. You must try to scare them away. The ones that light up and are drawn in are the right ones for your company. The ones that lack interest or a blank neutral stare, you shouldn’t hire.
If someone isn’t living up to your company’s core values, then you must free up their future. This does assume you’ve given them every chance. That you have clearly and specifically communicated where they are falling short and you have coached, mentored and guided them to improve. Assuming nothing has worked, it is time to let them go. You owe it to them and all your people.
What builds a great culture is when all of your people are on board with your core values. If you have 50 people in your company and 25 don’t have your core values, you will never build a strong culture.
The good news is that when you have a strong culture and you make a hiring mistake with someone that doesn’t have your core values, they eventually quit before you have to fire them because they feel uncomfortable in your culture.
You must review your people at least once a year. Even better, we urge you to have a quarterly conversation with your direct reports every 90 days. Assuming you are doing one or both, it is crucial to incorporate feedback on how they are doing and living by the company’s core values. Give honest feedback and have them give you honest feedback on how the company is living them.
There is no question that people will work harder for recognition than they will for money. Although money is important and they need to be compensated fairly, there is no question no amount of money will induce someone to do their best without regular recognition for a job well done.
You must acknowledge your people when they are exhibiting the company’s core values. Find creative ways to do this. Your people are motivated in many different ways.
One simple way to do this is to do “Core Value Call Outs” at your company meetings. Acknowledge the people who are exhibiting your core values. This is a powerful and emotional experience that motivates the rest of the team to step up their game. Who doesn’t want to be acknowledged by their peers?
When it comes to recognizing, there is positive recognition and negative recognition. In the preceding point, we addressed the positive. Just as the positive builds a great culture and habits, so does negative recognition.
This means when someone is violating one or more of your company’s core values, you must deal with it immediately (within 24 hours). If a person continues to have multiple core value violations, I urge you to apply the three-strike rule. This is where you hold three meetings with the person in question, in 30 days. In these meetings, you explain and put in writing clearly what core value violations occurred. Give the person the chance to improve and live up to the expectations. If the third meeting they aren’t living up to the expectations, you let them go. With this approach the good news is you rarely fire them, they will typically quit by the third meeting. This is because you have clearly communicated your expectations and they realize you are serious.
If you apply all five of the above principles, you will build a strong culture.
Finally when you walk the talk, everything changes. Your culture is defined and everyone knows what is expected. Your company will have a strong foundation that is built on a belief system that will propel your company to reach a new level of success.