Convention says that to transform the business culture, start with a spate of town hall meetings, dinners with staff, elaborate family outings, and a blitz of internal PR. Designate culture champions to launch a campaign in every location. Make everyone feel great about the company. Play to win, not lose, and profits will soar!
There is a more realistic view. Culture is a by-product of concrete leadership decisions and actions that translate purpose and direction into tangible performance. Business leaders who achieve dynamic growth never underestimate the power of culture on the business, or the ability of culture to derail the company’s ambitious plans. These leaders know that culture is greatly influenced by their own actions, words, strategies and programs.
The leader’s values and beliefs, how he conducts business, and what the organization is able to accomplish greatly affect the business culture. For example, if the company’s strategy produces expected growth and results, people become more motivated and eager to contribute. It takes leadership and great people to create the strategy and make it work. But strategy and people alone won’t take a company or organization where it needs to go. The business culture is crucial.
At Common Sense Media in San Francisco, president and COO Anne Zehren formalizes what she calls “The Principles that shape the business culture.” In this way everyone knows what’s important and how the organization works. Innovation and risk-taking drive the Common Sense culture. The place surges with unusual energy and focus.
You need only to walk through the front door to see what’s important at Common Sense. The team is the rock star, not a single individual. Zehren knows that too much star power for any one person can destroy an organization. The culture is results-driven and the bar is set high for everyone, from college interns to top executives. Anything is possible. Everyone demonstrates the courage of their convictions, an important idea for an organization that is short on resources.
In my blog on July 5, I described the current leadership gap in government by saying, “Of course it takes incredible leadership to direct and inspire the many layers within the governmental maze.” The fact that the culture of Washington is divisive and partisan says a great deal about gaps in leadership within the Executive branch and the civil service. We find bizzare examples of leaders on high-level teams who are working at cross-purposes, summits and working sessions that are no more than an opportunity to silence the opposition, and programs with prohibitive costs for the benefits derived.
What would it take to re-focus the bureaucracy, to make it results-driven, truly effective and accountable? First and foremost, it takes a leader that is inclusive, that sets high expectations and is actively engaged in the decision process. It also takes a committed team that shares these accountabilities. There is no room for super stars and primadonas in an organization that seeks and achieves top performance.
Changing the Culture
Yet building or shifting culture is difficult. If the culture does not support the growth, service or value creation that’s expected, it must change, and that change starts with the leader.
Changing the culture challenges everyone in the organization. It means attracting and retaining people who support the organization’s direction. It means creating new products or doing business differently. It means setting daunting but doable goals. It means creating an empowered culture that engages all stakeholders – employees, customers, suppliers, and the public. It means engaging diverse talents and skills in a way that will catapult results, because the organization is unified in purpose and direction.
Inclusive Cultures
The most progressive leaders today believe that culture best supports the business when it promotes innovation and expands accountability. In other words, it is inclusive and collaborative. These executives argue that a command-control structure is ineffective in today’s complex environment in which speed, innovation and global reach are so important. They seek divergent views, believing that an earnest confrontation of ideas leads to better decisions. They constantly adjust their organizations to accelerate decisions and focus on priorities, rather than creating new layers and silos with every new priority. In these effective organizations, leadership becomes the collective effort of teams, instead of the mandate of the single, all-knowing leader. Command-control is passé.
Inclusion is an extremely powerful tool. Irene Rosenfeld, CEO of Kraft, for example, believes that a big part of her role is to create the environment (the culture) so people can excel. When Rosenfeld established the format for the company’s monthly business reviews, she consciously pushed back on Kraft’s militaristic culture that sought to impress top management (tell them what they want to hear), rather than honestly share the facts, as well as the uncertainties. She suggested making the reviews less rigid so that she and her leadership team could help the businesses, raise questions, and facilitate new directions. In addition, she put complete accountability for the business back into the hands of the business leaders, minimizing the power of the corporate functions. Decentralizing authority has opened up the culture. “That’s one of the reasons our results are so much better,” Rosenfeld says.
Promoting Engagement and Accountability
The best leaders today demonstrate the behaviors and skills they expect of others. They live their values every moment of every day. They are approachable and down-to-earth, consistent in what they say and how they say it. In their organizations, belligerence and arrogance are not acceptable internally or externally.
Consider this story. The head of a small ad agency talked about how he experienced Alex Bogusky, the celebrated creative director who was instrumental in making Crispin Porter+Bogusky, a leader and driver of innovation in the advertising industry.
“The first time I met him he was giving a talk to the Creative Club of Atlanta. Afterward, he had some time on his hands before his flight home. I asked if he wanted to come by and visit my little 10-person agency. Not only did he do so, he sat around and worked on a job with us. He was one of us then and every time I’ve crossed paths with him since, he’s the same guy. He always treated me like an equal when I knew better [i.e. I wasn’t].
Like Bogusky, exceptional leaders seek honest opinions and really listen to what is said. They invite colleagues to contribute to important changes, knowing that engaged, empowered staffs are highly motivated. They continuously pursue new ways to strengthen the way the organization conducts its business. They demand the truth, and resolve differences that will interfere with innovation and results.
By engaging scores of contributors, exceptional leaders alter the way people think and come to much better solutions. The business culture becomes flexible, fluid and creative. These effective executives prove that leadership is not insular or lonely. Bureaucracy and internal politics are the antithesis of what these leaders stand for.
*********
Update – On August 2, Anne Zehren assumed the role of CEO of Kaboodle.com, a online shopping site owned by Hearst Interactive.
