Senior leadership’s continual focus on strategy is fundamental to the operation of business. Still, a brilliant business strategy without the culture to implement it is a fool’s errand. The most important thing that leaders can do is to listen, engage team members, attract and retain the best talent, be relentless with strategic communications and create and manage a healthy culture that supports the effective implementation of strategy. The best leaders possess the exceptional ability to understand and impact culture. They view culture and leadership as inevitably intertwined.
Organizational culture is based upon expected norms. Norms are the underlying conscious and unconscious behaviors and processes that powerfully influence the thoughts and emotions of team members and employees company-wide. Norms are born from the collective experiences and shared learning of the organization over time. Ideally, publicly articulated organizational values underpin a company’s culture and norms, but frequently this is not the case. Unfortunately, however, a recent Gallup survey reported that only 27% of employees strongly agree that they believe in their company’s values. When it comes to using values to realize the organization’s mission, the statistic is worse. Only 23% strongly agree they can apply their organization’s values to their everyday work.
As this data shows, identifying and establishing value-based norms that positively impact organizational culture is difficult. The norms driving culture are generally unseen and usually unacknowledged. We can see behaviors, but the forces that guide and create workplace conduct are rarely visible. Yet, norms go to the heart of what happens in a culture. Consequently, in order to manage culture, leaders must be attentive to the ways that norms and culture form, evolve, and how they link to core values.
Organizational culture is a dynamic phenomenon. Culture starts at the top with the CEO, C-suite and even the Board of Directors. But norms can become established without the direction or knowledge of management. They can form naturally through unguided employee interactions and accumulate gradually as time passes. Norms that are not tied to organizational values generally lead to patterns of behavior that run counter to a healthy culture that is required for strategy to succeed.
A crucial act of leadership, then, is to consciously work to create the desired culture through actions and strategic communication. The most successful leaders have an exceptional ability to appreciate the impact of culture. They often employ outside advisors to guide them through the collection of data that helps to analyze the culture from an independent and objective perspective. This independent analysis enables the organization to have a clear starting point for understanding the culture that exists and begin to explore what’s required for change.
Leadership’s strategic communication is an initial focus. These communications should not just share business strategies. They must address the core values that are the foundation for a healthy culture. When leaders share authentic stories describing successes resulting from values-based action, it resonates with employees. Similarly, leadership can refer to the core values to empower the organization to effectively innovate. Many employees want to know their boundaries and in this rapidly changing global environment, and there is no way to codify every situation. Leaders must point back to the core values as the “guard rails” for employees’ actions. Leadership’s communication, actions and examples, in line with the organization’s core values, all serve to engage employees intellectually and emotionally — the most powerful level of human process.
People may initially attempt “to comply” with management’s standards without really integrating values into everyday business functioning. But values and norms are an essential tool to retain existing talent and to attract and recruit new talent, usually the scarcest resource in any organization. People want to remain in a company where the norms and values align with their own, support their success, result in beneficial relationships with colleagues, and foster organizational accomplishment. Turnover decreases and engagement grows when people feel a sense of inclusion through shared values.
In attracting new talent, candidates often mention “listening to their gut” to determine if the place is a fit. In fact, they are assessing the culture and how people employed there feel about the company. After a new hire joins, the onboarding process is an opportunity for them to formally learn the core value and begin to integrate with cultural norms. They come to understand the common language, common practice, and shared experience that accrues around values-based norms. Most organizations can improve onboarding, as Gallup data show that only 12% of employees strongly agree their organization does a great job of onboarding. Ineffective onboarding can lead to short-termism and turnover with new hires, an expensive risk.
Significantly, adherence to common norms and values does not mean limiting diversity of thought and experience. The opposite results when acceptance of “the other” and collaboration with people of differing backgrounds becomes a non-negotiable imperative. This is good for business, as research shows that organizations that are welcoming, inclusive and foster diversity of thought and background are more productive and profitable.
Your values-based norms are a touchstone to propel your organizational strategy and benefit your people. As the Sage of Omaha, Warren Buffet, and his partner of 60 years, Charlie Munger aptly say: “We both have the theory that you should hang around good people, and always behave better every year than you behaved the previous year.” My favorite is Warren Buffet’s quote, “Take the high road; it’s far less crowded.”
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