The Power of Company Culture
Updated: Feb 8, 2020
How many of you have tried changing how things run in your company only to fail? Maybe you walked away scratching your head. Where did we go wrong? What do we need to do to make our company better?
We think it’s strategy and tactics because we’re taught to think in those terms. But there’s something underneath our strategies and tactics that prevents us from reaching the goals we set: company culture.
Peter Drucker, one of the biggest management masterminds of the 20th century said it best, “Culture eats strategy for breakfast.”
Let’s see what he meant by that and how we can apply that to our businesses.
Random words on random walls
You can slap as many quotations, vision and mission statements, and motivational quotes as you want on your walls, but in a vacuum, none of it will make any difference.
Many leaders think that company culture consists of perks like foosball tables, video game rooms, and free beer, but that’s not the case.
Company culture is composed of the shared behaviors, traits, and approaches that are rewarded. For example, if you work at a bank and you care about maintaining compliance, your culture is one where people dot their i’s and cross their t’s. You wouldn’t reward unbridled risk-taking because it wouldn’t help you achieve your strategic goals.
To change how things run in your company—and improve your business results—you first need to change what’s broken in your culture.
When you implement a new strategy or tactic and it doesn’t align with your culture, it’s not going to give you the results you want. It’s like giving a man with a hammer some screws; he will pound on them with a hammer because that’s all he has and that’s all he’s learned to do.
How culture comes to life
Paul O’Neill, the former CEO of Alcoa, posed this question: “Everyone deserves to leave work as safely as they arrive, right?”
Alcoa had a problem. Every year, employees were getting hurt on the job, and that caused them to miss work. When investors and analysts asked O’Neill about inventories and capital rations, he stuck to his message: we focus on safety, everything improves. It was all about building a shared culture around the belief system that employees should be safe at work.
When everyone at Alcoa started focusing on maintaining safety at their workplace, a funny thing happened. All the desired parameters in the company skyrocketed and the negative ones decreased. Not only did people get injured less often, but also their work satisfaction increased. With engagement high, minor issues got fixed before they ballooned into huge problems.
They didn’t change the strategy or the tactic in the company, they changed the way people think about the company. And this culture statement changed everything.
During the time O’Neill was the CEO, a plant manager in Mexico who was pulling great numbers decided to keep one accident a secret. He got fired two days later when O’Neill found out. Everyone outside the company was surprised, but Alcoa employees were expecting it because he broke one of the most fundamental culture rules of the company: reporting the security breach so that every other plant can learn from the mistake and make the company safer.
That’s what it means to follow through with your culture.
Do You Have a Strong Company Culture?
Dare to find out with this rubric.
Integrity is the answer to the culture.
Leadership integrity is a major source of great and not-so-great company cultures. That’s because culture starts in the C-Suite.
Most of the time, if you want to change a company’s culture, you start by changing the way senior leaders behave. People in the company emulate what the leaders are doing because that’s how we’re hard-wired to operate. Humans learn through osmosis. If leaders enforce and exhibit the desired behaviors consistently, employees will too. It’s the scientific definition of “walk the talk.”
So the next time you want to change the strategy, think first if there’s a culture problem. Because at the end of the day, culture eats strategy for breakfast.