Less Beer, More Substance & Other Things I Believe About Culture

HBR.org article from July/August 2018 issue
HBR.org article from July/August 2018 issue

My article, “Why Great People Leave Great Cultures” in HBR was one of the highest trending articles in 2018 and was viewed by over 200,000 people globally (10x the average). Scores of people sent me emails and messages on LinkedIn. Even more sent me direct messages and retweets on Twitter. Videos were even made on Instagram that summarized what I had shared (thanks again, Matt). Almost 70 people, and counting, commented on the article online. It clearly resonated with leaders and employees all over the world, at every level, across every function. And I know why.

It was not because I am a great writer (though I am working on that). It was not because I said something profoundly new. We have been talking about culture, engagement, and what makes a great company for decades. It was for three reasons:

1) It was practical, 2) It was relatable, and 3) We are angry.

In the article, I did not talk about culture in theory. I did not talk about it in complex ways. I wrote about culture in a way that we can all relate to—practically and realistically.

We are tired of the hypocrisy. We are fed up with the double standards. We are sick of the HR-speak. We have had it with the company that waxes on about love and the value of complete work, but has a leadership team who leaves their dirty napkins and coffee cups in the conference room after an early morning meeting. The little stuff becomes big stuff. And the big stuff becomes culture. We know what good cultures look like, and it is not this.

All too often, that little stuff does not get discussed. It festers until we realize we are losing people. We get caught up in what we are supposed to say about culture and lose sight of the actual behaviors that are happening around us, every day. Sometimes, incessant talk about culture can even be a red herring for the toxic one hiding in plain sight.

A strong culture is built on a system of intentionally defined behaviors, processes, and practices. Hiring, developing, assessing, and structuring are part of the business strategy, not just aligned with it. Yet, we increasingly hear about the consequences of companies failing to build a strong culture: leadership turnover, increased attrition, low employee morale, and declining customer base. More disturbing still, efforts to eliminate sexual harassment and discrimination in the workplace have, in far too many cases, allowed these problems to manifest in more subtle ways that are going tacitly ignored, tolerated, and even encouraged by toxic leadership teams in toxic cultures.

These negative effects of a lack of great culture continue to happen because there are still a lot of misconceptions out there. I’ve outlined the five primary ones below with the corresponding reality we need to reinforce:

1) Misconception: Leaders and managers believe that simply talking a lot about company values, without backing them up with action or doing nothing more with them than making cool posters or art on the walls, is sufficient to building culture.

Reality: The more culture is talked about and the less it is backed up by behaviors, the more the talk rings hollow and disingenuous. As I stated in my HBR article, culture only starts with values; it is reinforced through explicit action and processes. Leadership can and should actively express culture every day through their behaviors. Culture can be reinforced through the processes that are constantly being put in place. It is strengthened (or weakened) every time a decision is made. And, culture and people processes are interdependent components in building a full-scale and effective, intentional culture strategy; one cannot exist without the other.

2) Misconception: Since people processes are a big part of culture, we do not need to think about these processes until the company is bigger in size—at least 300 employees. Or at least until we start seeing issues. Then we will hire an HR team to manage it.

Reality: We know that behind every business problem is a people problem. A culture that starts out as a reaction will likely stay as a reaction, always struggling to get ahead of issues. Then why do so many startups wait so long before they think about building out people processes? Because the upside is often not immediate. In today’s high stakes, fast-moving world of business, we so often lose sight of anything that offers delayed gratification. Yet, without people processes driving a great culture, what’s the point of short-term gains when all of your great people leave over the long-term?

3) Misconception: A great culture will organically evolve from a great founding team or be a natural byproduct of a successful business.

Reality: A great culture drives a great company, it is not a byproduct of success. Strong culture will not create great products and companies, but it will increase the probability of it and greatly reduce the risk of mediocrity. Building a great culture requires an intentional strategy with appropriately allocated resources.

4) Misconception: Focusing on building a great culture will come at the expense of increasing company value. Therefore, we cannot afford the time and resources right now. We will get to it later, though—promise!

Reality: Increasing company value and building a great culture is not an either/or conversation. It is a both/and. Great leaders and great culture work together as an integrated system of great organizations. Building a great culture requires the same vision as seeing a finished product far before development is complete. Investing in the operations of people processes and ensuring executives and teams are equipped with what they need to work effectively is hard work; but it is work that, when done right, can increase company value.

5) Misconception: Perks create culture. HR manages it.

Reality: This is a classic misunderstanding of what drives culture (and therefore often a waste of resources). Culture must connect on an emotional and human level and speak to employees’ personal needs. Ultimately, great employees do not care about the free beer as much as they care about clear expectations and a personal growth path. 

I started Daimler Partners because:

I believe we can intentionally create great cultures in a practical, simple, and realistic way.

I believe that we need to hold our leaders accountable for exemplifying what is expected. And when they don’t, we cannot be afraid to tell them.   

I believe that building a great culture is not organic. It is an intentional strategy that needs to be driven and practiced from the top down and understood and practiced from the bottom up.

I believe that we all must be focused on building culture—not because it’s cool, not because it will attract more employees, not because it will keep our high performers, but because we all deserve to work in a place where we understand our roles and the support mechanisms around us to help us become better.

I believe that in a moment when we hear more and more stories about cultures that are toxic and tolerate bad behaviors, big and small, all of us must recognize our power and responsibility to say and show that there is a better way.

We are capable of creating these great workplaces.

We deserve to work in them.

We can—and must—do better together.

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