Build a Company Culture That Delivers Eye Popping Results

Consider these employee conversations at two companies.

Two salespeople were talking during a slow moment at an industry trade show.

“I’m not writing much down in that book the VP gave me. Takes a lot of time and I’m not sure it helps.”
“Oh, you’re going to be in hot water when the VP travels with you. She’ll observe how much you’re writing in your book and want to look at the book.”
“Really”
“ Yeah, it’s a big deal here. I wasn’t too keen on it at first but found it reminded me of important things customers said I didn’t remember. Even helped me save a deal.”

At the second company, two software engineers were chatting in the break room.

“I wrote 100 lines of code today.”
“Ouch, that’s not something you should be bragging about.”
“At my last company, they measured us by lines of code per hour.”
“Not here. We focus on fast, clean, bugless code.”
“Well, our software worked though we did have to do a lot of debugging.”
“Today, I wrote three lines of code and deleted 500 lines. It’s all about quality code that works right the first time. This reduces cost, speeds things up and makes customers happy.”

You might see these as one employee showing another employee the ropes. While this is true, they’re actually examples of effective company cultures that have boosted the financial performance of these companies.

The term company culture often leads to some common reactions. Since it’s become a hot buzzword, some executives and owners’ recoil because they’ve seen too many trends come and go over the years.

Others who are intrigued by the idea find it difficult to pin down exactly what a culture is and how you create one that will make things better. A Deloitte study of business executives found that fewer than 12% believe they understand their culture yet 82% believe culture is a potential competitive advantage.

How much of an advantage? Gallup research found that organizations with effective cultures increased net profit by 85% and showed a 138% improvement in sales over a five-year period.

The right culture can deliver better results for your company. Figuring out what type of culture can do that and how to change your current culture can be challenging.

Change your culture to boost performance

You have to change your culture for the right reasons if you’re going to improve financial performance. Too often, you will see companies changing their cultures so they can attract and retain more employees but didn’t see any improvement in end results.

While many believe changing culture is about better employee benefits, working conditions or creating a feel-good place to work, the true purpose is to help your company perform better. Your culture should help you execute your strategies, serve your customers, increase sales, control cost and boost profits.

An effective culture ensures your company performs at an exceptional level. Companies that have done this discover it also improves employee attraction and retention. Gallup found an effective culture led to a 50% increase in employee engagement. Just don’t make that the primary reason for changing your culture.

What is a culture?

At the most basic level, culture is about how the people who work together affect each other. How do employees impact the way other employees behave? It’s neither good nor bad.

Every organization has a culture whether it has been built intentionally or just evolved on its own. Cultures can help you or hurt you. That’s why careful thought has to go into how your culture affects strategy, quality, service, customers, operations, employees and profits.

Culture is the shared understanding among your people about what is done, how it’s done and why it’s done that way. This is a common set of beliefs, values and attitudes that guides what everyone does.

Charles Jacobs in his book Management Rewired described culture “…as the collective story the members of an organization tell themselves, driving the way they perceive the world and act as a result.”

Your culture is the story your employees tell each other about working at your firm.

If you want a high-performance company, you really want a high-performance culture. What type of story would your employees need to share with each other that would influence them to produce outstanding results?

With the right culture, employees can lead other employees to do the right things. The culture drives how everyone does their job which contributes to the company’s performance.

Unfortunately, there are company cultures where this social force acts to hold employees back so they don’t take initiative, make that extra effort, or think through what’s best for the customer. Some cultures can actually depress product and service standards. And no matter how management tries to fix this it stays the same.

Cultures can drive performance, keep things the way they are, or make performance worse. Cultures can help employees embrace change and improvement or cause them to resist change. Cultures can cause employees to all work together or create silos with competing factions and political games.

Some companies who made the deliberate attempt to shape their culture ended up not creating anything that moved the results needle. In fact, some of them failed to cause any change in the social dynamics of their employees at all. There are other examples where companies successfully changed their culture in a way that led to improved financial performance.

7 Keys to change your culture for high performance

You not only have to be intentional about the culture you want, you have to know how to change it. Changing the story your employees tell each other, changing the way your employees identify with your company and changing the minute by minute way every employee behaves takes a serious effort.

A high-performance culture is one where employees feel trusted. It’s lack of trust that prevents a culture from delivering the best results. Usually, this is due to management exerting too much control over employees. This control also leads to lower employee engagement and retention. When you let your culture assume more of the control, it makes everything work better.

1. Top management must be 100% committed to the change in culture.

Top management must lead the culture change in both words and actions. And it’s those actions that can trip up an attempt to change a culture. Owners, executives and managers can unconsciously act in ways that reinforce the wrong behaviors and attitudes.

When you figure out the behaviors you want, the story you want your employees to talk about, you have to look at your everyday actions so you consistently support what you want your employees to do. Top management has to be a role model for what they want employees to do and how they want them to think.

You can use human resources to help with a culture change but they can’t do it for you. You also have to be clear that your culture is about improving performance, not attracting and retaining employees. Improving your work environment may be a good project to pursue but don’t make that your culture change.

2. You can’t just promote, communicate and advertise the elements of the culture

Behavior change requires interaction and involvement at all levels in your company. You can’t order a culture and use a PR spin to create the image of it. Social norms and shared stories grow out of employees interacting with each other and management. It involves many symbols and forms of reinforcement. Walk the talk becomes mandatory.

You build a culture through conversations supported in a variety of ways. Sometimes, you can bubble up a culture change from the bottom.

3. Culture starts with a purpose your people can believe in

The why of our jobs matters a lot. There is overwhelming evidence that when employees see a purpose in their work, they are more engaged, motivated and inspired.

Holocaust survivor Viktor Frankl said “meaning is the primary motivation in… life.” We want to do something that’s bigger than ourselves and the need to earn a paycheck. Our work can give us some of that meaning when we understand the deeper why behind it.

McKinsey & Company’s 2020 survey found that 70% of non-executive employees say their sense of purpose is defined by their work. Yet only 15% said they were living their purpose at work compared to 85% of executives. That’s a huge gap between executives and everyone else.

Clearly there is an opportunity to change a culture in a way that gives work a purpose which creates meaning in employees’ lives. What would that accomplish? Raj Sisodia, author of Firms of Endearment, found that companies with a driving sense of purpose beyond making money outperformed the S&P 500 by a factor of 14 over a 15 year period.

Bain & Company research discovered that companies who create a winning culture are 3.7 times more likely to be a top performer. These high-performing companies all have a unique identity that give employees a sense of meaning just by being a part of the company.

When employees see a greater purpose in their work, that gives the firm a unique identify which leads to a sense of accomplishment and pride. In return, those employees perform at an exceptional level which delivers outstanding financial results.

4. The culture has to emphasize attitudes and behaviors that deliver performance

Your employees’ attitudes and behaviors determine how well they do their job. How well all your employees perform determines the level of your sales, customer satisfaction, growth, costs and profits.

You don’t just create a culture that feels good to your employees. And culture is not about employee compensation, benefits or working environment. Culture must drive the attitudes and behaviors that lead to exceptional performance.

Your culture is a way of creating social reinforcement between employees about the best way to perform their jobs. You can call it peer pressure or a shared understanding about how jobs should be done. Every employee helps every other employee do the right things. That’s how a culture works.

5. The culture supports adaptability for long term success

James Heskett and John Kotter of the Harvard Business School did a landmark study on culture which found “cultures that support adaptability foster long-term success.” It wasn’t enough for a culture to be strong or have clearly defined values in order to produce good performance. The culture must help the organization adapt to change.

6. A culture has to fit the market and competitive environment

Organizations have to continuously adapt to changing markets and a changing world. That means your employee attitudes and behaviors have to support your markets, customers, and competitive realities. Those are the types of actions that deliver better financial performance.

7. The culture supports a winning strategy

The success of your strategies depends on how well your employees do their job. This means you have to design your culture to influence your employees to do their jobs in a way that will improve the execution of your strategies. Your culture has to align all that your organization does with what you need to succeed.

The payoff

When you develop a winning culture based on the 7 keys, you have created a high-performance organization that can run circles around your competition and deliver above average financial returns while simultaneously boosting employee engagement and retention. It gives purpose and meaning to the work your employees do every day. In return, your employees will work together as a team to deliver exceptional results.

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