Author: S. Chris Edmonds

What critical success factors do you monitor closely in your business?

Most leaders I speak with tell me they primarily watch performance metrics—widgets out the door, services sold, installations, market share, profitability, and the like. Customer service rankings come in a distant second.

Both of those factors are important. Organizations must be profitable and must have loyal, happy customers. Leaders must definitely pay attention to results and service.

However, over three decades of research and experience have taught me that there is a third factor that deserves a leader’s intention and attention: the health of your organization’s work culture.

The fact is that the health of your organization’s culture – the extent to which your work environment consistently treats team members with trust, respect, and dignity – has a huge impact on individual and team performance as well as customer service.

The culture of your team (or department or division or plant or region or company) is the engine that drives your team’s success – or it’s lack of it. It drives innovation or stagnation. It drives transparency and sharing of information – or secrecy and withholding of information. It drives “all for one” cooperative interaction for success – or “I win, you lose” behaviors with a few winners and too many losers.

Unfortunately, most leaders do not know how to proactively manage their team’s culture. They’ve never been asked to do that. Most have not experienced successful culture change much less led one.

Leaders are incented and rewarded to deliver results – and, maybe, customer service. Those are the things that get measured, monitored, and rewarded. Few leaders are incented and rewarded to ensure their work culture treats employees – and customers – with trust, respect, and dignity, in every interaction.

Leaders must take charge of the quality of their work environment.

What leaders need is a proven framework, a how-to guide for crafting a purposeful, positive, productive culture. They need a step-by-step approach that helps them make values, citizenship, and teamwork as important as performance.

That proven path is through an organizational constitution.

An organizational constitution specifies your team’s purpose, values and behaviors, strategies, and goals. It creates “liberating rules” that help leaders and team members understand exactly how they are expected to treat each other and their customers every minute of every day.

For example, when your team’s “integrity” value is defined in observable, tangible, measurable terms, it is easy to see when leaders and team members are modeling those behaviors in every interaction.

Once leaders define their organizational constitution, they must invest time, energy, and passion to embed those agreements. Leaders must live their organizational constitution – and coach, refine, and redirect others’ behaviors to ensure everyone in their organization lives those agreements.

Leaders can’t delegate the responsibility of culture health to anyone else – not to HR, not to a steering committee, not to an outside consultant. Leaders must spend as much time creating workplace inspiration as they do creating workplace performance.

Don’t leave your culture to chance. Define your desired culture with an organizational constitution then align all practices to that constitution.

What have I missed? What questions do you have? Let me know on social media.

What do you look for when hiring new leaders or team members for your organization? Do you look at skills or at attitude, or both?

Should you be looking at something else?

In this short episode of my Culture Leadership Charge video series—this one crafted exclusively for Culture University—I shed light on the challenges with hiring for attitude.

Hiring for skills is quite common. That approach has served organizations well in the past. If you know what demonstrated skills are needed for maximum performance, hiring for those skills makes sense.

How do you hire for attitude? Attitude is, by definition, an “internal” dynamic – it is invisible to anyone other than the candidate. A candidate might say all the right things and present a pleasant demeanor during the interview; yet, what they present might not be an accurate depiction of how that player will interact with colleagues in the workplace every day.

So, let’s set attitude aside. What if we don’t look for attitude, at all, but we look for behaviors—behaviors that are consistent indicators of a candidate’s beliefs and actions about teamwork, cooperative interaction, kindness, supporting peers, and the like?

That’s a very effective approach. And, just as you must define what demonstrated skills are needed for maximum performance, you must define what demonstrated values are needed for maximum citizenship in your work environment.

Once those values are identified and defined, you need to specify exactly what behaviors will ensure that everyone—leaders, team members, customers, everyone—is treated with trust, respect, and dignity in every interaction.

It’s not hard to make decisions when you know what your values are. 
-Roy E. Disney

For example, one recent culture client defined their integrity value as “acting with virtue, sincerity, and truthfulness.” Their valued behaviors for integrity include “I am honest and do what I say I will do,” “I take responsibility for my actions,” and “I learn from my mistakes.”

When you specify your desired “great citizen” behaviors with measurable, tangible statements like these, everyone knows what is expected of them. Their attitude is not relevant. They can choose to embrace your defined valued behaviors or not. Leaders must not only demonstrate these behaviors themselves but then hold everyone accountable for those values expectations, just as you hold everyone accountable for performance expectations.

With values defined in behavioral terms, your interview process can focus on the behaviors you want in great corporate citizens. Your new hires will fit into your desired culture very well and quickly get up to speed, performance-wise and values-wise.

What did I miss? How can you add to this conversation? I welcome your thoughts on social media. 

The articles and expertise found here on Culture University and Constructive Culture provide a fantastic foundation for a leader to learn how a purposeful, positive, productive culture operates. From making values as important as results to creating an organizational constitution to evaluating climate and relationships—that critical information is readily available.

The tough part isn’t gaining the knowledge about creating a healthy work culture. The tough part is implementing these practices and maintaining that healthy culture, every interaction, every day.

My “big three” – the three primary metrics I use to assess cultural health – are employee engagement, customer service, and results (including profits in for-profit organizations). Creating a work environment that inspires those three requires that leaders define, align, and refine their desired culture. It won’t happen by default—a healthy culture happens only by design.

Let’s look at one organization that’s doing culture right: Assurance, an insurance brokerage in Chicago, IL.

They’ve won over 100 awards as a top workplace. Recent awards include the Fortune’s “2016 Great Place to Work,” Chicago Tribune “2016 Top Workplaces List,” and Business Insurance magazine’s “2016 Best Places to Work,” their eighth straight year of winning that honor.

That’s impressive. This video, produced in 2015 by Chicago Creative Space, offers a terrific overview of Assurance’s carefully crafted work culture.

On Purpose. With Passion.

Employee engagement across their 400 team members is excellent. As part of the “best company to work for” process, Assurance employees are surveyed regularly. Assurance’s Chief Marketing Officer, Steven Handmaker, said,“Peter Burke, president of Best Companies Group, noted that only 41 percent of employees nationwide have any emotional attachment to their employer. According to the group’s most recent survey, 96 percent of Assurance employees are very satisfied with our company. We use benchmarks like these to compare ourselves with others in the industry.”

Steven said, “In addition, our own HR team sends out routine pulse surveys to all employees that ask a series of questions on areas such as benefits, culture, and job satisfaction.” Pulse surveys—weekly surveys that require less than 3 minutes for employees to complete—are an especially effective means of staying in touch with employee perceptions about the company.

I asked Steven about the company’s present-day purpose statement—what they’re trying to accomplish (besides making money) for customers and how they’re improving customers’ quality of life. Steven explained that Assurance doesn’t simply have a purpose statement—they have a passion statement: “‘Minimizing risk. Maximizing health.’ Those four simple words are what we live by at Assurance.”

He said, “As an independent insurance brokerage, we look for unique ways to minimize the risk that, in turn, impacts the health and safety of our clients and their workforce. Every day, our employees live out this passion by:

• Helping workers avoid injury,
• Providing families access to needed medical care,
• Improving the quality and longevity of people’s lives by promoting a healthy lifestyle,
• Helping businesses grow by improving their performance so they can add jobs and grow our economy, and
• Increasing happiness in the workplace which translates to happiness at home.”

It won’t happen by default—a healthy culture happens only by design.
-S. Chris Edmonds

Rather than traditional “core values,” Assurance boasts eleven “best & brightest” characteristics that guide their actions and hiring decisions. Handmaker says, “Our company and its employees must be ‘caring, understanding, participative, positive, and proactive,’ among other traits. These attributes are used to improve our clients, business partners, community, employees and the world. As Assurance continues to grow, we seek employees that embody those eleven same characteristics. Our eleven best & brightest characteristics are embedded in each job descriptions and adorn the walls of Assurance.”

I asked, why “11”? Steven laughed and said, “Well, it’s a tribute to the movie Spinal Tap and adds to our culture of fun.” In addition, Assurance has also taken the time to quantifying their “DNA.” The Assurance DNA stands for “Dominate. Navigate. Appreciate.” These three concepts are the purest reflection of their office culture.

I asked Steven how Assurance stays in tune with customer expectations. He replied, “We send out regular client surveys that measure our customer satisfaction. Based on the responses, we have formalized next steps to keep the relationship strong or find ways to improve it. The most recent survey indicated that our satisfaction ratio is 97%.”

Workplace Culture: Be Intentional

Assurance’s employees are engaged and customers are literally “wowed.” Only one item is left from my “big three.” I asked Steven, “How does your organization’s performance compare to others in your industry?”

Steven said, “In August 2016, Assurance was selected as a ‘Best Practices Agency.’ Our team qualified for this status by ranking among the top performers in the annual Best Practices Study conducted by the Independent Insurance Agents & Brokers of America (IIABA) and Reagan Consulting. The purpose of the Best Practices Study is to compile the operating statistics of the country’s leading agents and brokers. We submit detailed financial and operational information which is analyzed, scored, and ranked objectively for inclusion in the study on the basis of operational excellence including growth, profitability, productivity and financial stability.”

He continued, “Over 1,800 agencies from around the country were nominated in six revenue categories. However, only 254 agencies scored high enough to qualify for inclusion. Participation in the Best Practices Study has become a prestigious recognition of the superior accomplishments of the top insurance agencies in each of the revenue size categories studied. Our inclusion with these other outstanding agents and brokers clearly recognizes us as an industry leader.”

Most leaders focus exclusively on results and profits—yet workplace culture drives everything that happens in your organization, for better or worse. Assurance has a purposeful, positive, productive work culture—because their leaders see culture as a competitive advantage. And, they see that it’s the right thing to do to attract and retain talented, engaged team members.

Don’t leave the quality of your work culture to chance. Be intentional. Set clear standards for performance and values, and religiously measure them frequently. The payoff? Way more fun. Way more engagement. Way happier customers—and way more desired results.

Questions to ponder: What are your company’s ratings on my “big three” – employee engagement, customer service, and results and profits? Where do your company’s leaders spend the most time and energy today?

Please share your ideas and comments on social media.

What’s the condition of your organization’s culture? Every organization has one. From a small business to a multi-national, it’s got a culture. From a team to a department to a division to a region to a country, it’s got a culture.

Usually the culture of a business happens by default – not by design. Culture just evolves as the business’ products and services gain traction in the marketplace. Culture is rarely intentional.

In addition, most leaders pay little attention to business culture. They’ve never been asked to manage the health of their organization’s culture. Typically they don’t know how to do that.

Leaders do what their bosses did. They do what they’re incented to do. As a result, leaders spend more time and energy on their business’ products and services than they do to it’s culture, yet culture drives everything that happens in organizations, good or bad.

There is good news! Interest in business culture is growing steadily. According to Deloitte’s 2016 Global Human Capital Trends report, “few factors contribute more to business success than culture.” Deloitte found that 87 percent of business leaders believe that culture is important. 54 percent believe culture is very important – nine percentage points higher than Deloitte’s 2015 study.

Culture can’t be viewed as “soft” or “irrelevant” any longer. Culture is a real business issue! However, Deloitte’s study found that only 28 percent of business leaders understand their current culture well. Only 19 percent believe they have the “right” culture!

Leaders must make the quality of their business culture as important as the productivity of their organization. In essence, they must make values as important as results.

How can leaders be more intentional about their culture? Two questions need to be on the minds of your team’s or company’s leaders, every day. First, is this the culture we want and are proud of? Second, is our culture purposeful, positive, and productive?

Is this the culture we want and are proud of?

I once worked for a boss that loved competition. Across our small company, everyone was in competition with their colleagues. Every day, every employee’s production metrics were shown. Those that met goals were celebrated. Those that fell short were berated.

The competitive environment drove every plan, decision, and action. It wasn’t for everybody. Some employees loved it. I was so stressed that I left after only a few months.

If I’d have asked this boss the first question – “Is this the culture you want and are proud of?” – he’d have answered with an enthusiastic “YES!” That’s exactly the culture he wanted and the culture he reinforced. (We’ll come back and revisit this interesting company with the second question.)

For many humans, work is not an inspiring, engaging, productive environment. Gallup’s daily engagement dashboard shows only 33% of US workers are highly engaged. Tiny HR’s 2014 culture and engagement report found only 21% of employees feel strongly valued at work.

If leaders want to retain and attract top talent, to serve customers beautifully, to create and deliver desirable products and services, and to generate revenues that more than offset expenses, a bloodthirsty work environment isn’t the way to go!

A purposeful, positive, productive culture is one that leaders and employees are proud of. That work environment is founded on values – values that ensure that everyone is treated with trust, respect, and dignity in every interaction. Everyone – even customers – is treated kindly, every time, in every conversation.

That type of disciplined kindness won’t happen without clear values expectations (defined in behavioral terms) and demonstration of those valued behaviors by everyone, C-suite to hourly staff.

Even if you have formalized values and behaviors, does that mean that everyone is adhering to them, living them, daily? No, it doesn’t. Announcing values and behaviors doesn’t mean everyone embraces them.

Here’s the definition of ethics for a company that’s been in the news recently: “Our ethics are the sum of all the decisions each of us makes every day. If you want to find out how strong a company’s ethics are, don’t listen to what its people say. Watch what they do.”

How well did some Well Fargo’s commercial banking employees adhere to this ethical expectation? US federal regulators found that Wells Fargo employees secretly created over two million unauthorized bank and credit card accounts – using customer funds, without customers knowing it – since 2011.

5300 employees have been fired for the shady behavior. A $185 million fine was levied.

John Stumpf, CEO of Wells Fargo, said that the problem wasn’t due to the bank’s culture – it was the work of a few unethical employees. “The one percent that did it wrong, who we fired, terminated, in no way reflects our culture,” he said.

Yet using Wells Fargo’s own definition of ethics, regulators simply watched what those employees did. And they found unethical behavior – two million examples of it.

Leaders must not assume that everyone “gets” their desired culture. Leaders must model it, observe it, coach it, reinforce it, etc. Every day.

Is our culture purposeful, positive, and productive?

Remember my experience with that very aggressive, competitive company? If I’d have asked my boss there whether the culture was purposeful, positive, and productive, he’d have probably said that it was productive. He would likely have said it was purposeful, since his purpose was to beat budgeted nets each month. If he were honest, he’d have reluctantly admitted it was not positive.

I – and others that left that company – would say no, that culture was not remotely purposeful, positive, or productive.

Purposeful means that the company has a “reason for being” besides making money. A company’s servant purpose specifies who its primary customers are, how it serves those customers effectively, and how it improves those customers’ quality of life.

These are tough questions. By answering these questions – and coming up with a pure servant purpose statement – employees are typically proud of how they serve. And, they want to serve better each day.

Positive means that people are treated with trust, respect, and dignity, in every interaction. Team members feel valued and appreciated for both their efforts and their accomplishments, every day.

Productive means what we think it means. People deliver on performance commitments daily. High quality, even creative products and services are delivered as promised, with a smile.

These three desirable qualities won’t happen naturally. They’ll only happen if leaders examine the quality of their culture regularly – formally and informally. Leaders need to craft a variety of ways to understand what it’s like to work in their organization’s culture, ways like focus groups . . . one-on-one meetings with employees at all levels . . . regular (twice a year) engagement surveys, etc.

I’ve had some executives I coach go “undercover” to learn exactly what it’s like to work in their organization’s front lines.

Using these feedback channels, leaders will learn quickly what things are going well – aligned with their desired culture – and what things are difficult. Only with an honest understanding of relationships, norms, and practices can leaders be confident they’re leading the business so the culture – and their employees – can thrive.

Don’t leave your culture to chance. Ask these two questions. Dig into the answers. Ask again. Dig more deeply. Celebrate aligned behavior and redirect mis-aligned behavior.

Repeat daily.

Questions to ponder: How purposeful and positive and productive is your organization’s culture? Does your work environment promote a disciplined kindness or a competitive “winner take all” approach or something in between?

What are your beliefs about organizational culture? Some of your beliefs might inhibit your willingness and ability to proactively improve the quality of your work culture.

New clients ask me very similar questions when I start guiding them along the path to a powerful, positive, productive culture. Some of your beliefs might be challenged by my answers! Here are those questions and my responses.

How exactly is organizational culture linked to organizational performance?

Culture drives everything that happens in organizations, good or bad. If a work culture requires that everyone be treated with trust, respect, and dignity – and that treatment occurs – players apply their passions and skills in service to the organization’s purpose and goals. That boosts performance and profits. Conversely, if a work culture allows everyone to be discounted, dismissed, and demeaned, that will quash passion and skill application. Results and profits suffer.

We have a mission statement that outlines the culture we want. Most of the time those key elements are ignored. How can leaders reinforce the culture we want?

I coach leaders to formalize their desired culture with an organizational constitution. That constitution includes the organization’s present-day servant purpose (who does the team/company serve, and to what end – besides making money), values and behaviors, strategies, and goals. Stating the desired culture does not make it an immediate reality, though!

Invest equal time and energy managing the quality of your work culture as you do managing the results it produces.
-S. Chris Edmonds

Once the constitution is formalized, leaders must demonstrate the team/company’s servant purpose and valued behaviors in every interaction. They must embrace the desired culture and be role models of it, every day. If leaders don’t live the desired culture, no one else will embrace it, either.

Is an effective culture always fun?

It doesn’t have to be fun, but powerful, positive, productive cultures almost always are! When players can trust that their bosses and peers have their best interests at heart, they can relax. They don’t have to be “on guard,” awaiting demeaning, dismissive comments or actions.

Players can be fully present, fully their unique selves, and know that they will be valued and honored, daily. That’s a fun environment to be in.

How does a powerful, positive, productive culture reinforce the bottom line?

The benefits to creating an organizational constitution then living those agreements are impressive. I can prove it. My clients enjoy employee engagement gains of 40 percent or more, customer service improvements of 40 percent or more, and boosts to performance and profits by 35 percent or more, all within 18 months of aligning practices and behavior to your desired culture.

How can we ensure we hire new employees that fit the culture we want?

Your desired culture is placed at risk with every hire!

Why? Because most organizations hire for skills and accomplishments. They don’t examine – effectively and thoroughly – the candidate’s work ethic or values, or the candidate’s fit in your desired culture.

All employees are motivated – they just may not be motivated to do things you need done or do them the way you need them done!

With an organizational constitution in place, you can hire for values and citizenship FIRST and skills second. If you find players who share your team or company values and behaviors, that’s a player you want to bring into your organization.

We have a unique work environment today. How do we decide what culture elements to keep as we refine our culture moving forward?

Every company has a unique way of operating. The problem is that the way they operate may not be consistent or effective. For example, a company may promote a value of respect – yet the company tolerates an aggressive boss that throws tantrums, throws papers, and screams at employees. That way of operating is not going to create a fun, vibrant, positive workplace.

The single most important action that leaders can take to increase the quality of their work environment is to make values as important as results. They do that by deciding what values they’d like to be lived in their culture, then defining those values in behavioral terms, then living those behaviors, coaching those behaviors, etc.

How can we best diagnose our current culture?

Three key questions will help a company gauge the effectiveness of their current operating culture. First, how engaged are employees? Second, what is the quality of the customer experience? Third, how well are we performing?

Most companies only measure the third question. They focus exclusively on results. To improve the quality of their work environment, leaders must invest time, energy, focus, and attention on their culture.

With some clients, I use Human Synergistics’ valid and reliable culture assessments – the Organizational Culture Inventory^® (OCI^®) and the Organizational Effectiveness Inventory^® (OEI). These tools use a unique circumplex to give clients a thorough understanding of their current culture, their ideal culture, the factors that influence both, and the critical gaps that exist.

There are a number of validated engagement assessments available – don’t craft your own. Find and use one that has been proven over time. In addition, ask questions about how bosses treat employees daily. Most clients find huge variations in the quality of daily work relationships.

Assess the customer experience frequently. Find a validated, reliable customer survey – use it to learn what’s working and what isn’t.

From a performance perspective, most of the organizations I work with are not consistently performing at their highest levels. Mistakes happen frequently. Quality standards are missed. Goals are set but there are few (if any) consequences when teams or players miss those targets. Consistent performance requires clear goals and accountability for delivering on those goals.

What companies today have great corporate cultures we should aspire to?

WD40 Company, Ritz-Carlton hotels, Madwire, and the Luck Companies all have powerful, positive, productive cultures. They do that by making values as important as results – by not tolerating bad behavior from leaders or team members at any time. They measure, monitor, and reward both valued behaviors and performance. They require leaders to be servant leaders, meeting the unique needs of employees during their fast-paced day.

Culture matters. It drives everything that happens in your organization. Invest equal time and energy managing the quality of your work culture as you do managing the results it produces.

Questions to ponder: How clear are your company’s values – are they defined in observable, tangible, measurable terms? Are bad behaviors tolerated in your company or are they addressed promptly (and quashed)? What unique elements of your company culture deserve to be maintained moving forward? What oddities of your company culture deserve to be left behind?

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

“I’m not sure I can do this.”

I’ve heard these words countless times. You may have as well.

During my 15 years as an executive for the YMCA, one of the globe’s largest non-profits now branded as The Y, I heard these words from a teenager about to climb a rock wall – on belay, but nervous about the task before her. I heard these words from an adult volunteer who has signed on for the first time to help with the branch’s annual fundraising. Her $5,000 goal during the three week campaign was pretty intimidating. I heard these words from a high school junior who was minutes away from running his first committee session in the Model Legislature and Court, even after weeks of training and practice.

I heard these words in my own head just before taking the stage to keynote a convention with 10,000 in attendance. It was the largest audience I’d ever spoken to and I was nervous about how attendees would respond to my expertise, content, and stories.

During my 26 years as an executive consultant, I heard these words from a division head who knew he had to re-direct a high performing player on that player’s demeaning, aggressive interactions with peers each day. I heard these words from leaders who realized that in order to proactively manage an inspiring, productive workplace, they’d need to significantly shift how they spent their time – away from managing production and towards managing cooperative interaction and effective citizenship.

Recently, I heard these words from a senior executive who was unsure if he could effectively lead culture change in his large, multi-unit organization.

This organization is like many across the globe. It is successful, generating profits from satisfied customers. And, in their markets, competition is encroaching. This leader knows that great service to their customers is the way to differentiate themselves from their competitors. And, great service is only going to happen when employees feel trusted, honored, and respected in their organization.

This organization’s culture was like those of many companies across the globe. The culture wasn’t a focus – getting products out the door was the focus, for decades. In the company’s early years, the culture was very “family-like” – but that had changed over the past 10 years. Growth, the global recession, the retirement of long-time employees, and the influx of younger generations into the business had shifted that casual, family culture to one of silos, competition between units and players, and an “I win, you lose” dynamic.

Sound familiar? This is the case with many organizations, from small businesses to global multi-national companies. Their initial comfortable culture evolves to a much more stressful culture that’s less productive and more frustrating to live in daily.

This executive wanted to bring back the family culture. He realized that the company needed to formalize its desired values. He drove that process and the company published – for the first time – four values that reflected their historical culture and would help make the workplace less frustrating for employees today.

The values and their definitions were communicated very effectively. A marketing campaign helped get the word out with a cool logo, a brochure explaining the need for formalized values and explaining everyone was expected to demonstrate the values daily, and more.

A year later, the leadership team conducted an all-employee (leaders, managers, supervisors, operators, drivers, support staff, etc.) survey to learn the answers to two questions. First, did employees understand the values. Second, are employees demonstrating the values.

They learned that the new company values were very well communicated. 80 percent of their employee population understood the values and definitions. And they learned that very few people were seen as demonstrating the values. Only 25 percent of employees modeled the values in daily interactions.

Want a safe, inspiring, productive work culture? Make values as important as results.
-S. Chris Edmonds

This leader was very frustrated with the lack of traction their values had. So, this executive reached out to me for help.

I worked with this leader and his leadership team to plan a half-day session for their 40 top leaders. I facilitated the session to help those leaders get much more specific about what “demonstrating our values” really meant and what that looked like. They had to get these lofty values into tangible, observable, measurable, behavioral terms.

I helped this team understand that announcing the values was the first step. Formalizing valued behaviors was step two. The next 20 steps require living the values themselves, praising aligned behavior, re-directing mis-aligned behavior, etc., every day.

They did a great job generating about 20 valued behaviors (observable and measurable indications that players were modeling the company’s values). The next step is for the senior leadership team to draft 3-4 valued behaviors for each of their four values, and gather feedback from the entire employee population on the accuracy of these valued behaviors.

It’s been a few months. I had a coaching call with the senior leader recently. During that call, he said, “I’m not sure I can do this.”

It’s a big step to commit to formalizing values in behavioral terms. It’s not something they’ve done before – very few leaders have experienced successful culture change much less led one. They’ve rarely had their bosses effectively manage culture change. Their bosses managed results – so that’s what today’s leaders think they should do.

Leaders do need to manage results. And – managing results is exactly half the leader’s job. The other half of their job is to create and maintain a workplace culture that treats everyone with trust, respect, and dignity in every interaction.

Effective, inspiring, safe, productive, and fun organizational cultures don’t happen by default – they happen by design. My job as a consultant and coach with this leader – and his leadership team – is to guide them to making that big step: defining values in behavioral terms, then living, coaching, and reinforcing those behaviors daily.

Because, you know what? Leaders CAN do this. And we need leaders TO do this – every day.

Questions to ponder: What are your company’s values? Are those values defined in observable, tangible, measurable terms? What gets measured, monitored, and rewarded in your organization – is it primarily results or values as well? How safe, inspiring, productive, and fun is your team’s culture?

Have you ever been a part of a company merger, where your company acquired a competitor or your organization was acquired by another one? If so, you probably experienced the difficulty of such mergers or acquisitions to generate positive value for shareholders, owners, and employees.

A well-quoted 1999 study by KPMG discovered that 83% of mergers failed. The research showed that 17 percent of deals added value to the combined company, 30 percent produced no significant difference in value, and 53 percent actually eroded value.

A recent Harvard Business Review study found that somewhere between 70 and 90 percent of mergers fail today.

The primary – maybe even the exclusive – metric for evaluating the success of mergers and acquisitions is hard dollar/euro gains. Little energy is invested in more human factors like how the merging companies manage talent, or how each company’s talent is rewarded and recognized (including compensation), or how each company sees its present day purpose or “reason for being,” or how each company’s values foundation compares to the other.

When the impact of culture on mergers and acquisitions is studied, the results are hard to ignore. A 2007 Hay Group study (titled “Dangerous Liaisons”) found that only 27 percent of business leaders analyzed the cultural compatibility of the firms to be merged. A shocking 70 percent of senior executives interviewed for this study believe that it was too difficult to obtain intelligence on the corporate culture and human capital of M&A target companies.

The focus of acquisition is typically all about the money. And as the studies above show, most of the time financial gains do not happen as planned or as hoped.

Despite the setbacks over the past fifteen years, mergers and acquisitions are back in vogue. A 2015 KPMG study discovered that the robust economy and low cost of credit – especially in the US – is causing companies to look at M&A’s to grow quickly.

There are many examples of recent mergers that have not gone well – making life difficult for employees as well as for customers of the merged company.

The airline industry has seen its share of mergers over the past five years. Passengers and employees have experienced frustration with systems issues and systems failures at United Airlines (which merged with Continental) and at American Airlines (which merged with US Airways).

When companies merge, how is culture typically addressed? It’s not addressed at all. The lack of proactive culture management is likely a contributing factor to the failure of these mergers to generate real value.

Here’s an example. One company I studied acquired a small organization that had a product line that complemented the acquiring company’s products and services. The new product could be sold alongside the existing product mix to the same customers at the same time. It looked, on paper, to be a logical and beneficial integration.

Fifty employees came to the acquiring company from the small firm. Those employees where highly skilled. They invented the product line that was the attractive component of the acquisition.

Nothing was done to examine the two companies’ human systems for compatibility or alignment. Nothing was formally done to transition the acquired company’s staff into the acquiring company’s systems or culture. The small firm “lost” its culture and systems in the acquisition.

What happened to those fifty skilled players from the small company? A year later, only ten remained with the acquiring company.

The integration of the product line was carefully analyzed, planned, and implemented. The integration of fifty talented players from their small company into the larger one was ignored – with costly results.

Another company I studied entered into a possible acquisition of a successful organization with a complementary product line (sound familiar?). In this case, both companies did their due diligence by examining financial and IT capability – and expanded that due diligence into cultural compatibility, leadership philosophies, and talent management approaches.

The emphasis on the human side of the business is what convinced both parties to move forward with the acquisition. One senior leader told me, “The values match was nearly perfect. Both companies operated according to values and behaviors that were nearly identical. That clinched it for both sides.”

Culture drives everything that happens in organizations, good or bad. How can leaders discover the quality of the operating culture in a company they’re considering for acquisition?

• Do research. What do leaders of the organization say about their people and their culture? Search for and study posts and articles that help shed light on the company’s purpose, values, culture, and leadership philosophy. Search Glassdoor to learn how employees rate the company’s leadership, compensation, values, and culture. This alone can be eye-opening!
• Ask questions. In meetings and discussions, ask as many questions about the target company’s operating culture as you do about the market analysis, finances, and pipeline for their products and services. Schedule time with a cross-section of company players – leaders, supervisors, team members – and engage them about the quality of their culture, purpose, values, and such. Your learnings from these activities will help you analyze the degree of alignment between your culture and theirs.

After the acquisition, spend as much time and energy on integration of the players of both organizations as you do on the integration of the systems, products, and services. Invite discussion. Engage people in the process. Adapt the process to increase the effectiveness of your integration efforts.

Paying attention to culture will improve the odds of having a successful, value-generating merger.

Questions to ponder: If you were to describe your company culture in “25 words or less,” how would you characterize it? What do employees have to say about your organization, its culture, its leaders, etc. on Glassdoor.com today? If your company was about to be acquired, what would you want the acquiring company to know about your operating culture?

How do leaders and team members treat each other in your workplace today? Do they interact respectfully and civilly…or aggressively and selfishly…or somewhere in between?

When I ask leaders this question, they typically respond with “Well, I think they treat each other OK.” They are not confident in their perceptions because they don’t pay enough attention to the quality of workplace interactions.

Most Leaders Invest Greater Time and Energy on Results Than They Do on Culture

Leaders typically invest greater time and energy in their company’s products and services than they do to the quality of its culture – yet culture drives everything that happens in an organization, good or bad.

There are good reasons why leaders focus primarily on results.

Most organizations began with a product or service that customers wanted. The company evolved by focusing on how to deliver those products and services efficiently and at a quality level that customers demanded.

The company’s “reason for being” was to get products out the door or services delivered. Results and performance were closely monitored; they were the only metrics that mattered.

From the beginning, that primary – or exclusive – focus on results was the only thing that leaders were asked to do.

Don’t get me wrong. Productivity and delivering on your product and service promises are hugely important – but they’re not the only important things in your business. Effective leaders know that the health of their organization’s work environment is equally as important as results.

In fact, the quality of your work culture may even be more important than results.

Here’s why: when employees report that they are treated daily with trust, respect, and dignity, their engagement goes up (by 40 percent or more), customer service rankings go up (by 40 percent or more), and results and profits go up (by 35 percent or more).

To create an environment of trust, dignity, and respect – in every interaction – leaders have to be intentional about the quality of their work culture.

WD-40 Company’s Tribal Culture

Garry Ridge takes workplace culture seriously. As the president and CEO of the WD-40 Company, Garry is responsible for a multi-brand, multi-national organization that was once as siloed as you can imagine. When Garry accepted the CEO role back in 1997, command and control was an apt description of the company’s culture. Team members withheld information that could boost their peers’ success. Leaders didn’t delegate authority. Leaders micromanaged talented team members.

Garry realized that if the company was to be both globally successful and a great place to work, he had to change the company’s top down, “I win, you lose” culture.

Garry and his leadership team created a tribal culture based on formalized values and behaviors. They made workplace respect and dignity as important as performance by measuring employee engagement every year. That engagement survey provides hard data about employee perceptions of leader effectiveness, relationship quality, promises made and kept, civil treatment in every interaction, and more.

We treat people with respect, we honor each other. We’re here to create memories together, we’re here to do good work, we’re here to keep promises. That’s why we’re here.
-Garry Ridge, “chief” of the WD-40 Company “tribe”, from an interview with the University of San Diego

To Garry and the WD-40 Company’s leaders, their every-other-year employee engagement survey is as important a marker of the company’s success as their $340M in net sales in 2014.

Many companies conduct engagement surveys – some even do so regularly (annually). The average level of engagement in global organizations is about 30 percent. At WD-40 Company,  93 percent of global employees report they are engaged. That is triple the normal ranking!

An amazing 98.7 percent of WD-40 Company employees feel they are treated with dignity and respect (!). Communication from leaders, clear expectations set by leaders, and leader dependability all score 97 percent or higher.

Those are amazingly high engagement scores. Garry and his global leadership team are clearly doing many things right!

How to Boost Workplace Dignity and Respect

Workplace dignity and respect isn’t something a leader can simply demand and then enjoy. It requires leaders to be very specific about what they expect, to communicate those expectations often, to demonstrate those expectations in every interaction themselves, and to align others’ behavior to those expectations.

Every minute of every day.

The first step: Define. Effective leaders define both performance standards and values standards. They then model them, coach them, praise behavior aligned with them, and redirect mis-aligned behavior.

Values must be defined in observable, tangible, measurable terms. They must be as measurable as performance metrics.

The second step: Align. Effective leaders don’t tolerate anyone mistreating others, be they peers, team members, or customers. Not even once.

Workplace dignity and respect isn’t a target that once reached means “you’ve arrived” or that daily interactions will always demonstrate desired dignity and respect. People know how to be nice but too often they are not nice to each other – we see it in our polarized societies around the globe all the time.

Imagine this common workplace scenario. If a team member engages in twenty conversation on a given day, and nineteen of those interactions are respectful and dignified, that’s really good. However, that one dismissive interaction, where the team member left feeling discounted and disrespected, blew it.

At the end of that day, the team member would say, “No, we don’t treat each other with respect and dignity around here.”

And that player would be exactly right.

Maintaining a consistently civil or even validating work environment requires constant modeling by leaders and tending by leaders.

Alignment also means that you measure the degree of values alignment religiously. Just as WD-40 Company does their bi-annual engagement survey, leaders must invest time and energy in gathering employee perceptions of values, valued behaviors, and their engagement.

The third step: Refine. Every other year or so, effective leaders examine their valued behaviors to see if tweaks are needed. The company’s values don’t change but the behavioral expectations just might.

People might be living your current behaviors – and will do so even if you change the behaviors listed for your values. New behaviors may be needed given the demands of your business.

You are leaving money on the table if your employees aren’t treated consistently with dignity and respect. There’s no time like the present to boost the quality of your work environment.

Questions to ponder: What is the engagement level of employees in your company? How much time and energy do your company’s leaders invest in the quality of workplace relationships and interactions? If your company does have defined values, to what extent are they lived and measured?

I welcome your thoughts, please share them on social media.

We’ve had amazing weather in the US this spring. The middle of the country is inundated with too much rain while California suffers the worst drought in recorded history. Europe is experiencing warmer storms than normal while the eastern Mediterranean is dealing with snow.

An organization’s culture is more like the weather than you might think. It’s tangible and real. You can look out the window to gauge the weather. You’ll get a better idea of the weather if you go outside to feel how warm or cold or humid it is.

Your culture is tangible and real, as well. Just as you get a better sense of the weather by going out in it, you’ll get a better sense of your culture by diving into it, by stopping and analyzing it. By observing how people in your organization treat each other and treat customers, how people invest their time and energy, how people make decisions, etc. Through these observations you can easily sense what the organization’s culture values, what it highly regards. Does it value results, profits, people, customers, innovation, power, control, etc.? What gets priority day to day?

Unlike your organization’s culture, though, the weather is closely studied by experts every hour (even every minute) of every day. Those experts predict the temperature and forecast weather trends throughout the day and share them in a variety of ways. You can get neighborhood-specific forecasts right on your smartphone, today.

There’s no current “organizational culture forecast” app on your smartphone (though some tools are getting closer; more on that in a moment). Your culture is probably not closely studied by experts right now. The reality is that most senior leaders invest more time and energy on their company’s products and services than they do in their company’s culture, yet culture drives everything that happens in their organizations, good or bad.

My job is to help leaders 1) understand the important role culture plays in organizational effectiveness,  2) craft specific, intentional guidelines for their desired culture (in the form of an organizational constitution, and 3) align plans, decisions, and actions by everyone, in every interaction, every day.

Culture And Engagement Are Gaining In Importance

The good news is that business and HR leaders are paying greater attention to culture and employee engagement. In Deloitte’s 2015 Global Human Capital Trends report, the most important issue is culture and engagement (slightly edging out leadership, the number one issue in 2014).

Why do leaders see the need for a greater focus on culture and engagement today? Because leaders are (finally) examining the quality of their culture and the degree of employee engagement, and both are lacking. These leaders are saying that, in their organizations, culture and engagement are not just lacking – they’re awful.

The Global Human Capital Trends report’s authors state (on page 4), “This challenge highlights the need for business and HR leaders to gain a clear understanding of their organization’s culture and reexamine every HR and talent program as a way to better engage and empower people.”

The members of your organization know very well whether your culture is healthy. They experience in every interaction whether or not your work environment treats others with trust, respect, and dignity. TinyHR’s 2014 engagement and culture report revealed what it calls a “company culture crisis:” 64% of employees do not believe their organization has a strong work culture.

Don’t leave the health of your organizational culture to chance.
-S. Chris Edmonds

How Are Organizational Cultures Created?

Most leaders don’t do proactive culture management. They don’t have the skills to do that. They’ve never been asked to do that. They’re asked to boost sales and profits, so they build skills in those things and they rely on those skills daily.

Not surprisingly, then, most organizational cultures happen by default, not by design. A company typically develops a product or service, markets their solutions heavily, and begins selling those products and services. If they’re lucky and efficient, they might make money selling them. The culture isn’t an afterthought – it’s not a conscious thought, at all. It evolves – not with intention but with ambiguity.

A very few organizational cultures are crafted intentionally from the moment they are created. W.L. Gore is one of the companies that did that. Founder Bill Gore created the company’s unique “lattice” structure. It was and is a holacracy – with no bosses or titles. Gore associates become leaders based on their ability to gain the respect of their peers and to attract followers. The Gore culture is very productive and very demanding – and very fun for those players that fit into that unique structure.

The majority of organizations, then, have an unintentional culture. A few unintentional cultures work out all right. Their particular evolution creates positive service behaviors and consistent performance. However, most unintentional cultures don’t work well for many – leaders, employees, even customers.

Classic indications of an ineffective unintentional culture include:

• A lack of enforced standards for how people shall treat each other. There may be formalized values but they are not lived day to day.
• Recognition is earned primarily and often exclusively for hitting performance targets. How you hit those targets isn’t really paid attention to. If one is aggressive, mean, or unethical while exceeding performance standards, one gets recognized and rewarded.
• A lack of a consistent, reliable feedback mechanism for employees to share their perceptions of what it’s like to live and work in the culture. Engagement or satisfaction surveys are done rarely, if at all. When surveys are completed, little is done to fix issues that are raised.

A huge contributor to an ineffective unintentional culture is that bad behavior gets tolerated, so long as performance is good. If there are no negative consequences and no redirection of bad behavior, people continue to behave badly, which erodes trust, respect  and dignity.

What Can Leaders Do to Improve their Culture?

First, learn the condition of your culture. Wander around and observe how team members interact with each other and with customers. Ask other senior leaders to do the same. Hold informal focus groups to learn employee perceptions of how effectively the organization is operating. In addition, gather reliable data through tools like TinyPulse, a software solution provided by Tiny HR. TinyPulse provides real-time feedback with short, frequent surveys from employees. It’s as close to a “culture smartphone app” as I’ve seen.

Spend time at least once a week to review leaders’ perceptions of your culture’s overall health. You’ll find that there are some very good things in place as well as a number of gaps that need to be addressed. This is a vitally important step – and you’ll never be done with it. Effective leaders are constantly checking in on how well their culture is working for employees and customers.

Second, set formal standards about what a good job looks like in the form of an organizational constitution. Your constitution creates clear understanding of what you expect from a performance standpoint and a values standpoint. Define desired values in behavioral terms. Let everyone know what the new rules are – and model them daily to prove you are serious about your values and behaviors.

Third, hold everyone accountable for both performance and values. No ifs, ands, or buts. Celebrate the leaders and team members that deliver required performance while modeling your desired values. Survey employees to learn which leaders they think are living the valued behaviors – and which are not. Coach and redirect the players who don’t model your values or don’t deliver expected performance.

Want consistent high performance and values-alignment in your organization? Define it, align to it, and enjoy it.

How would you describe your organization’s culture – is it productive, fun, and vibrant, or is it dull, uninspired, and difficult to work in? Does your organization have stated values expectations and behaviors defined? What kinds of behaviors get measured, monitored, and rewarded in your culture? 

Is your workplace inspiring, engaging, and productive or frustrating, dull, and stagnant? Or is it somewhere in between?

Effective leaders pay attention to the quality of their work culture, every day. They know that culture drives everything that happens in their team or department or company, good or bad. They invest time and energy observing interactions, engaging with players and customers, celebrating aligned behavior, and coaching misaligned behavior.

Unfortunately most leaders don’t pay much attention to the quality and health of their team, department, or company culture.

They’ve never been asked to manage their team culture. They’ve been asked to manage results.

Not surprisingly, most leaders spend a great majority of their time and energy on processes, performance, and profits. That’s all they know. That’s what their bosses did. They’re simply modeling what they’ve been exposed to over the years.

Most leaders haven’t experienced a successful culture change during their careers. Even fewer have led a successful culture change.

This wouldn’t be a problem if most organizational cultures were healthy, engaging, and inspiring. But, according to the research – and to our own experiences, they’re not.

Most Work Environments Are Not Engaging and Inspiring

A 2009 Conference Board study found that only 45% of employees are even “satisfied” at work. TinyHR’s 2014 engagement and culture report found that 49% of employees are not satisfied with their direct supervisor and only 21% of employees feel strongly valued at work.

Tim Kuppler noted in this Culture University article that 96% of respondents in a 2013 Strategy& survey said that some form of culture change is needed in their organization. Tiny HR’s report found that 64% of employees do not feel they have a strong work culture.

Given these sobering facts, it’s clear that our work environments are not engaging, inspiring places today. If a work culture doesn’t treat employees with trust, respect, and dignity in every interaction, productivity drops, customer service drops, and output drops.

Leaders must pay attention to the quality of their work culture and they need to proactively refine that culture so that team members feel valued in every interaction, every day.

I’m not suggesting leaders ignore performance. Performance is a good thing! Meeting performance expectations means you’re keeping promises to customers and stakeholders.

Leaders have many data points and dashboards that tell them how well their team is performing to defined standards. They watch those metrics carefully and coach to keep teams on track with performance.

Make Values As Important As Performance

To boost the quality of their team culture, leaders must pay as much attention to values as they do to performance. Formal values, defined in behavioral terms, specify what a “great corporate citizen” looks, acts, and sounds like.

When values are defined in observable, tangible, and measurable behaviors, leaders can create data points and dashboards that tell them how well players are modeling desired valued behaviors. One of the most effective data points is a custom values survey, completed twice annually, that allows employees to rate leaders on the degree to which those bosses demonstrate the desired valued behaviors.

Leaders can monitor values survey results carefully – and can observe day-to-day interactions carefully – and praise aligned behavior and re-direct misaligned behavior.

Only after the team or department or company’s leaders have embraced the valued behaviors are employee invited to demonstrate them. The leaders create credibility for these “new rules” – the valued behaviors – by modeling them consistently.

What Do I Mean by “Valued Behaviors”? 

Let’s get specific about what effective values look like for a team, department, or company.

Values – if they are defined at all – are typically defined in ratty lofty terms. Vague definitions are difficult to translate into real time interactions – they’re ideas, not clear behavioral parameters.

To make values as measurable as performance, values must be crisply defined and present specific behaviors that, when demonstrated, ensure players are living your desired values.

Here’s an example from a retail client that decided one of their values would be service. Their definition: “Our customers are the reason we’re in business. By giving them superior service at every opportunity, we exceed their expectations. When we exceed their expectations, we’re at our best.”

The core of this definition has two main ideas – “give every customer superior service at every opportunity” and “be our best.” Would you agree that this definition leaves little doubt about what this company means by service?

Next, they define valued behaviors which express exactly how every player must behave to model their service value. These behaviors are in the form of “I” statements – not “I will” statements! These behaviors outline what every player will DO daily to demonstrate this value. Their valued behaviors:

• I initiate friendly hospitality by promptly and enthusiastically smiling and acknowledging everyone who comes within 10 feet of me.
• I passionately exceed customers’ expectations by offering solutions to their needs.
• I assist each customer in finding requested items or service.

Are these behaviors complicated? No. Are these behaviors measurable – could you observe team members’ interactions and assess the degree to which they’re demonstrating these behaviors? Absolutely. Are these behaviors “doable” – by anyone? They are.

When values are defined in observable, tangible, measurable terms, you can live them, coach them, celebrate them, and reward them – just like you do with performance expectations.

If values are not defined in measurable terms, all you can do is hope that players live them.

Boost Performance, Engagement, and Service with Values Alignment

Making values as important as performance works – here’s proof. By aligning to desired behavioralized values, companies enjoy growth in three key areas: employee engagement (a 40% boost in 18-24 months), customer service (also a 40% increase), and results/profits (a 35% increase).

Those are impressive benefits. Pay attention to your company culture. Consider adding formal values expectations, defined in behavioral terms, to performance standards already in place.

You’re going to be there, anyway. Why not boost the health of your team culture, starting now?

Questions to ponder: What values are demonstrated in your team or company culture today?  What values did your best bosses embed in your team culture?  I welcome your thoughts and comments on social media.