Culture guides behavior

Mar 01, 2010

Sometimes I think people in our business forget that the culture of the organization guides the behavior of its members. Sure— you can always have a bad apple who exhibits some crazy or bad behavior. But by and large, the right culture will tend to take mediocre or just average people and turn them into positive contributors. Culture is really all about what behaviors the firm rewards and what behaviors it punishes. It is all about who gets ahead vs. who doesn’t. It is also about “the smell of the place,” sort of an intangible but real feeling one gets just by walking in the door. When you have a positive culture, most people feel pretty good about the company, its owners, and its output. As a result, they work hard, they care about quality, and they get excited about any instances where quality has slipped. To create this positive culture— one that guides all individuals’ behavior in a positive direction— you need to carefully manage the following eight aspects of your company: Leadership. The leaders set the pace— set the example for everyone else. They have to model the behaviors you want your people to have. If you want employees who aren’t negative and sarcastic, you’d better have leaders who aren’t that way. If you want people who are quick to return phone calls and e-mails, you’d better have leaders who do that. If you are the ultimate boss, it is your job to have the right leaders in place. Without doing this, your culture will be whatever the leaders who work for you want it to be, instead of what you want it to be. Reward schemes. It seems so obvious but is constantly forgotten. The reward schemes have to go along with what behaviors you are trying to promote. If you want people to sell, you should pay them for sales, not project profits earned. If you want people to take good care of their current clients, you should pay them based on repeat business earned and/or client satisfaction scores. If you want people to work as a team, pay them based on team performance. We constantly say we want “A” behaviors but then base our pay schemes on “Z” behaviors in this business. It doesn’t work. Hiring practices. If we want only the best people we can get, we have to hire the best. That means people with the proven track records, education, registrations, etc. that the job requires. It also means that they need to have the other “soft” skills— such as ability to work well with others, excellent writing skills, verbal communication skills, and more. So, why do we so often then turn around and hire people who are “good enough” to fill the immediate need but not more? I think it is because we are lazy, impatient, and cheap. To build the right culture, you have to get a critical mass of the “right” people. There is no other way it will ever happen. Policies. The policies have to reflect the organization you are trying to create. If, for example, you want a company that is full of “entrepreneurs,” you probably shouldn’t have a policy manual that reads like it was stolen from a state DOT. Unnecessary bureaucratic hurdles, too many forms, and too much stratification in your ownership structure and job titles are all among the things that could be working against creating the kind of culture you really want in your organization. Get out a clean sheet of paper and rewrite your policy manual. Values. Everyone in business talks about “values,” but most of it is hogwash. Kit Miyamoto, President and CEO of Miyamoto International, Inc., of Sacramento, CA, an earthquake and structural engineering firm, will tell you they are about “saving lives.” He demonstrates that by going to wherever there is an earthquake in the world and helping out, even if it means the company’s short-term financial performance may suffer. That is an example of living your values. People who can identify with those kinds of values will do anything to make them a reality. This is so crucial to culture! Accounting. The accounting has to reflect the values and reward schemes you are trying to promote. If you want to sell more health care projects, for example, your system better track sales of health care projects, as opposed to how the Dallas office is performing relative to Houston, or as opposed to the profitability of your health care division on work performed. Not to say you cannot track these other things accounting-wise, but people respond to the numbers you track. Accounting impacts behavior. Your accounting has to be consistent with the culture you want to create. Marketing messages. Believe it or not, your own employees may pay as much or more attention to your marketing messages than your clients and potential clients do. What are you saying? Does the marketing match your real intentions? Any disconnect will cost you credibility with your people and be damaging to your attempts to guide your culture. Office environment. Your office says a lot about your culture. I was just at a firm recently— one where everyone I had met outside their office was well-groomed and dressed impeccably. Guess what? The office looked the same way. Everything was highly designed and the entire place super-organized. The CEO sits at a desk with nothing on it. The impression was powerful. This same company is one that is without question outperforming its peers in this current recession. The office reflects a culture of discipline, order, quality, and detail consciousness. And this helps guide the behavior of everyone the firm hires. “Culture” is really not some amorphous, academic concept. It is something that you can actively manage and use to create the firm you want— the firm of your dreams. Originally published 3/1/2010

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