Author: Hilton Barbour

Culture is rapidly becoming a differentiator in business. We’ve historically thought of it as a means to attract talent. Increasingly it’s a way to attract customers too.

This opportunity to have Culture drive customer acquisition will bring into very sharp focus where – and who – in the C-suite should be held responsible and accountable for creating and nurturing culture.

The overlap between the Chief Information Officer (CIO) and Chief Marketing Officer (CMO) has been well documented for the past decade. This time the question of accountability will not be over Pixels, but over People.

This time the confrontation will be between Marketing and Human Resources.

Here are three areas where I see this playing out.

Purpose over Policy

Purpose has become one of the hottest areas in management thinking in the past few years. It has become a central mandate of Marketing in many organizations as executives seek new ways to differentiate themselves to prospective clients but also to prospective employees.

Popularized by Simon Sinek in his book “Start With Why,” Purpose is typically seen as the ultimate articulation of why an organization exists, where traditional descriptors like Mission Statements defined what an organization was doing to become successful.

What’s more, Purpose is seen to actually drive performance and help with both employee acquisition and retention. In their popular book, “Corporate Culture and Performance,” John Kotter and James Heskett drew significant parallels between organizations with a strong Purpose and financial performance. And, as we all know, anything that positively impacts the bottom line gets CEO attention.

Historically this hasn’t been the domain of HR. Instead, HR has been more accountable for crucial tasks like labour relations, benefits and compensation, annual leave and annual reviews. These tasks center more on managing people within an organization rather than inspiring them. In a Purpose-driven organization, the real opportunity doesn’t lie in articulating what is allowed but what is possible. Articulating that possibility lies firmly with the CMO today.

Culture as a Differentiator

Marketers spend their lives seeking to create – and market – a compelling differentiator to prospective customers. Tools like positioning statements and classic frameworks like the 4 P’s were built to determine and define these points of differentiation.

As access to markets and technology has obliterated the traditional barriers to entry in many categories, marketers have struggled to find those elusive differentiators. Even more elusive are differentiators that are sustainable and not easily copied by the competition. In many cases organizations are quickly realizing that their own culture is actually a point of differentiation and, considering how long it takes to nurture a great culture, it can’t be easily replicated.

Service-driven organizations are obvious examples where Culture is absolutely a differentiator. Consider how different the experiences at Starbucks, Southwest, Zappos and The Four Seasons are from their competition. But it’s not just service organizations where culture contributes to success. Internet behemoths like Reed Hastings at Netflix and Jeff Bezos at Amazon both cite their cultures as reasons their organizations have been able to capture market share and mind share so adroitly.

If culture can create meaningful and sustainable differentiation, and that differentiation drives customer preference and loyalty, it is inevitable that forward-thinking CMO’s will want to ensure they have a very firm hand in both creating and nurturing their organizational culture.

Brand Experience = Customer Experience AND Employee Experience

In reality, all brand experiences are a culmination of an expertly managed customer experience – and that’s often not feasible unless equal rigor is applied to the employee experience.

Simplistically speaking, marketing creates a promise in the market. But invariably it is employees who fulfill or fail on that promise when customers come calling. Case in point, United’s promise of “Fly The Friendly Skies” quickly became fodder for Senate hearings, late night comics and internet memes when their gate crew was anything but friendly. The disconnect between marketing promise and employee fulfillment couldn’t be starker.

It is not surprising then that employee experience initiatives are a rapidly growing area for consultancy engagements and F100 company investment. Both realize that spending time on internal audiences (employees) can be even more important than time spent on classic CX and UX endeavours. Author of the excellent book “What Great Brands Do” Denise Lee Yohn penned a great HBR article that outlined all elements of the employee experience journey and how focusing resources (and investment) on each stage would drastically increase not only the caliber of the staff an organization hired but also the critical level of engagement those employees would have.

If creating a world-class brand experience remains the remit of CMO’s, and without fully-engaged employees, that’s not possible, it stands to reason that employee experience and engagement should fall under that remit too.

For the record, as a long-time marketing veteran, my opinion is entirely subjective.

I’m certainly not debating the capability and competency of HR veterans merely suggesting that responsibilities like employee engagement, culture, employee experience are going to become areas of sharper focus if organizations want to avoid the social media outrage currently aimed at the airline industry.

Couple that with the reality that Marketing has increasingly become a very data-driven and ROI-driven function. We’re also seeing a rise in sophisticated HR software tools that directly gauge, measure and test employee engagement, satisfaction (or dis-satisfaction) and the impact on customer satisfaction. Marrying that proliferation of data to direct the organization forward will be critical.

Ultimately collaboration, not confrontation, is the hallmark of any well-functioning leadership team. Just as the CMO and the CIO had to find ways to work together to map a successful path forward, the CHRO and CMO will need to find a way to harness the very best of their unique experience and individual acumen.

Who do YOU believe should be accountable for culture within today’s high-functioning organizations? Please comment on social media.

Adapted and reprinted with permission from HiltonBarbour.com.

My admiration for Challenger brands—brands that look squarely in the eyes of the incumbents, the Goliaths of a category, and say “There is a better way and here it is”—stems from a discipline and devotion to their Purpose that isn’t swayed by fashion, trend or whim. They remain focused on the reason their founders began the company to start with.

Leadership, purpose and culture are inextricably linked

In my consultancy work, I often observe that getting to a company’s Purpose is incredibly hard. Questions abound as to whether all that hard work is really going to make a significant impact on their top or bottom-line.

Let me ask if these outcomes aren’t worth the effort.

• A more enlightened work-force. One of the central benefits of a well-articulated and well-understood Purpose is that employees know exactly who they work for and what they’re trying to achieve in their daily efforts. Purpose drives comprehension.

• A stronger corporate culture. A Purpose that acts as an aspiration and “true north” for the organization becomes the bedrock of stronger corporate cultures. Ask organizations like Zappos and The Four Seasons about how their Purpose informs their much-admired cultures. Purpose drives cohesion.

• A filtering mechanism for decisions. I’ve been fortunate enough to see organizations use their Purpose to guide decisions as varied as the market sectors they’d enter, or not; the partner and franchisees they’d partner with, or not; and even the types of employees they consider hiring or promoting. Purpose drives fundamental business choices.  

The purpose of Challengers

Red Bull’s focus on “energizing the world” means there’s no incongruity when they hold air races in crowded downtown areas, take free-running from an underground niche past-time into the mainstream or throw a man from outer space in real-time. Or when they open their own travelling music academy to nurture fresh new talent, no-body says “That’s not Red Bull.” More often, the reaction is “Of course. Who else but Red Bull could do that?”

Equally, you can track the activities of an organization like Starbucks and draw a very straight line of Purpose that connects all their initiatives and drives their Culture. The deep and ongoing training of their Baristas is a direct reflection of an unwavering commitment to their Purpose. How else can you genuinely create a third place without unparalleled levels of service, personalization and a sense of community? In addition, enlightened policies related to education, share ownership and promotion further highlight how Howard Schultz realizes that you need a Purpose that galvanizes employees. Ultimately, if your Purpose can’t be directly tied to Values and Behaviours – the cornerstones of Culture – then, unfortunately, its nothing more than a PR platitude.

Above all, be of single aim; have a legitimate and useful purpose, and devote yourself unreservedly to it.
-James Allen

The Rudderless

Conversely, we’ve all witnessed the rapid and public implosion of UBER. No one can deny that dismal Leadership and a lack of a meaningful Purpose are central to that story. When your leadership considers UBER drivers as nothing more than a cost to be managed, rather than a human being to be nurtured and thanked, can you be surprised at the backlash? When your leadership exalts in boorish and misogynistic behaviour, can you be shocked at pitiful diversity, inclusivity and engagement levels? Look no further than Susan Fowler’s famous viral post to see glaring signs that Cultures are modeled on the behaviour of Leadership. And not just executive leadership, but leadership at each and every level in an organization.

So how is it that stories like UBER are so prevalent?

From my view, many of these failed efforts happen because organizations are looking for love in all the wrong places. Rather than looking deep within themselves – to their Purpose – they try desperately to ride a trend or co-opt something current and en vogue so as to appear fashionable. Case in point, for all the current clamor behind “innovation” or “digital transformation,” how many of those well-intentioned initiatives begin half-cocked? How many websites are never visited? How many applications are never downloaded by anyone other than the family of the developers? How many products go from lauded to landfill without making the barest dent in the lives of consumers?

There is a classic line from Hollywood I hear in my work and is often said with the same gravitas as James Earl Jones summons in “Field of Dreams.”

“If you build it, they will come.”

“If. You. Build. It, They WILL come.”

I think we all realize just how empty and dangerously naïve that phrase is in today’s market.

If the risk is fully aligned with your purpose and mission, then it’s worth considering.
-Peter Diamandis

What’s it worth?  

For those companies unwilling to invest in defining their Purpose, is not doing the work worth the risk? Do you think you can still launch new products, attract new investment, stimulate and galvanize your workforce without a steadfast Purpose?

Is that something you’re prepared to bet the farm on?

I welcome and look forward to your thoughts and comments on social media.

Adapted and reprinted with permission from HiltonBarbour.com.

Disturbing employee quotations

“He would find a hole in the data and then explode.”

“I would see people practically combust.”

“There are so many people running for the door not just because the ship is sinking, but because the captain of the ship is screaming at them, blaming it on them, and telling them it’s their fault.”

“The joke in the office was that when it came to work/life balance, work came first, life came second, and trying to find the balance came last.”

“You learn how to diplomatically throw people under the bus.”

You might be excused for thinking these quotations stem from some terrifying, corporate Ayn Rand winner-takes-all hell-hole where fear, intimidation, and bullying ruled the day. Ironically, these quotations come from employees of two of the most famous retailers on the planet.

And despite the (alarming) similarity in the quotations, one is in stratospheric ascent …

While the other, by all accounts, is about to become a sad footnote in the retail history books.

Of course, I’m talking about Amazon and Sears, and there’s no prize for guessing which stock ticker belongs to whom.

Case in point, Amazon CEO Jeff Bezos is purported to have made over a billion dollars in one day from all the Alexa hoopla at CES in January of this year. Not too shabby for a place where employees practically combust.

To further highlight the dichotomy, many consider Amazon to be on an enviable track to become a trillion dollar company and it’s certainly rolling out a rapid-fire slew of innovations (Dash, Alexa) and PR-worthy concepts (GO, Blue Origin).

Also, in the type of folklore usually reserved for Silicon Valley start-ups not billion dollar companies, it hasn’t shied away from “failing fast” (Fire) either. Conversely, at Sears, sales are down 37% since early 2013, its debt load has spiked to over $1.6 billion, and the company is losing well over $1 billion annually.

So, on the surface, you could read these employee comments and conclude that both organizations have toxic cultures. But if the cultures are equally “toxic,” how is one organization a leader while the other is undoubtedly a laggard?

The primary differentiator

Well, we could start by taking a hard look at how each organization defines their organizational Purpose. Amazon’s focus on Pioneers is a highly motivating call-to-arms, which is likely backed up throughout the organization’s deployment of resources, technology, and systems. And, most importantly, is equally motivating to Amazon employees.

In contrast, Sears description reads like a lackluster focus on operating efficiency, returns on shareholder value and other financial measurements. Speaking purely for myself, the “Wow!” experience articulated is one I’ve seldom seen from my interactions with any part of the brand. And the irony of “Be the world’s best retailer” signals an organization grossly out of touch with today’s market.

Culture AND climate

Perhaps the other issue is that we’re using the culture term haphazardly. And, perhaps, we’re not acknowledging some key nuances and learning between Amazon and Sears.

For example, when we discuss Culture, we often point to phenomenon like remote working, open plan offices, bring your pet to work environments, sushi Fridays and a proliferation of foosball tables as reflective of an open and progressive culture, add in employee engagement surveys and you’re really rocking.

But Culture is more nuanced and complex than this. The good folks over at Culture University talk about the differences between “climate” and “culture” and, you guessed it, all those attributes above aren’t culture cues, they’re measures of organizational climate. Just because management insists that trust develops at the annual picnic, it doesn’t mean you’re working in a trusting culture.

Founder Impact

Cultures where the founder still walks the halls (Amazon) operate with an entirely different dynamic than one’s where the founders passed away decades earlier. When the guy whose name is figuratively on the door still presides over who gets blessed and who gets banished, there is little incentive to change the way things are gonna get done. Less than zero if the organization has a history of success. Look at how people describe the vaunted culture of innovation at Apple under founder Steve Jobs versus under CEO Tim Cook—and that’s only in the space of five years!

Then there’s the issue—as I did myself at the start of this post—of evaluating and labeling a culture “good,” “bad,” “progressive,” or “toxic” without evaluating it against the fundamental business criteria that matter … Is the Culture accelerating or impeding the execution of the organization’s strategy?

After all, as acclaimed Culture expert Edgar Schein points out, “The purpose of a company is not to create a nice workplace culture but to function in the economy, to provide goods and services” There is no debate that cultures that tolerate employee abuse or engage in unethical behavior have no place in a civilized society but equally, I would argue, a culture of civility where strategy execution grinds to a halt because of consensus building and bureaucracy is equally bad. Peter Drucker was never more insightful, nor eloquent than his famous quip: “Culture Eats Strategy for Breakfast.”

Perhaps the final word is best left to Jeff Bezos who, in trying to counter the scathing New York Times article, had this to say in defense of the Amazon culture:

“The reason cultures are so stable in time is because people self-select. Someone energized by competitive zeal may select and be happy in one culture, while someone who loves to pioneer and invent may choose another. The world, thankfully, is full of many high-performing, highly distinctive corporate cultures. We never claim that our approach is the right one — just that it’s ours — and over the last two decades, we’ve collected a large group of like-minded people. Folks who find our approach energizing and meaningful.”

What are your views on the difference between Amazon and Sears?

How significant, or insignificant, is the Cultural aspect in the success of one and the failure of the other? Is it appropriate to use the “toxic” word in describing both?

If you’re interested in reading deeper into the articles that spurred this post, the Amazon examples sprang from a New York Times expose in August 2015, and the Sears examples come from a story covered by Business Insider in January 2017.

Key Questions

• Does our organization have a Purpose that inspires and motivates our employees?
• Is that Purpose used as a consistent guide for our internal communications and also how we structure our teams and operations?
• Can we articulate our Purpose in a set of abiding Values that we hold Leadership (and all employees) to?

I welcome your comments and ideas on social media.

Adapted and reprinted with permission from HiltonBarbour.com.