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How To Inspire Culture Change from the Top

You have to start in the C-Suite. Ann Rhoades, a founding executive of JetBlue Airways, explains why a strong corporate culture must begin at the top. Leadership by example wins again

In today’s hyper-competitive environment, no CEO can afford to be saddled with a culture that tolerates indifferent or hostile behavior toward customers. Instant communications now allows them to share their stories with untold numbers of potential customers. CEOs need to ask themselves: Do you want the stories your customers tell to be raves or horror stories?

I was one of the founding executives of JetBlue Airways and we decided to get our culture right from the beginning. We were going to change the flying experience by agreeing on a set of values and behaviors that exemplified them. Most importantly, we pledged that we were going to personally live those values and hold leaders accountable for same, every day. No one can deny that we built a resilient customer-oriented culture, one that thrives in good times and bad. The results of JetBlue speak for themselves. For the sixth year in a row, JetBlue won the J.D. Power award for customer service and the financials of JetBlue and Southwest exceeded others in the competitive set during these difficult financial times.

I spend a lot of time talking about how CEOs can inspire great cultures from the C-Suite in my book, Built on Values: Creating an Enviable Culture that Outperforms the Competition (Jossey-Bass, 2011). I use the word “inspire” deliberately: CEOs cannot direct, drive or force a culture change to take place in their image or at their whim. Culture cannot be dictated. However, in my leadership experience at Southwest, JetBlue, Doubletree, and in my own culture-change consulting company, I have discovered that culture change is made infinitely easier by CEOs who practice these five principles:

Draw on the expertise of A-Players. You cannot impose your values on your company from above – you can only build on the values of your employees. So look around – who are your best employees, your A Players, that you could build a better culture with? Look on the front line especially hard; ask your supervisors who makes customers happiest. Then get a team of these people (no more than thirty) in a room and let them help you create a set of shared values and value-based behaviors for the company.

To determine the right behaviors, think about how employees could execute a particular value. What does “integrity” mean in the day-to-day life of your company, for example? Are customer service queues long? Do you give refunds only under duress? With these values-based behaviors in mind, you can then use them to recruit and hire more A Players, reward them for displaying those behaviors, and spread your ideal culture to every corner of your company.

Give the gift of time. Incredibly, Dave Barger, CEO of JetBlue spends as much as 50 percent of his workday in “Pocket Sessions” just listening to employees at airports say whatever is on their minds. “You will hear criticism,” says Barger, “and it may hurt a bit, but it is being said out on the floor, so you might as well be part of the conversation.”

At JetBlue, we also have a monthly TLC (“the leadership connection”) requirement. This means that all of our managers, directors, and officers have to set aside specific, uncancellable times to walk the floors, work the gates, and sling bags alongside front-line employees. Working alongside employees helps you understand the work they do better and allows them to see your personal passion for it. You need to listen and take notes, too, as well as find a way to get back to people who need answers. Just “jetting through” and giving speeches doesn’t improve anything. It’s too one-way.

Tell stories, share the values. CEOs who want employees to live the company’s values will find ways to show by their words and their actions that they are living them, too. For example, at Pyramid Hotels in Boston, executives can’t just “demonstrate” commitment, one of the company’s values. They are expected to be able to tell stories to employees about ways that they have been committed to customers, employees, or their community. Or find a new company.

Rick Kelleher, former CEO of Doubletree Hotels and currently CEO of Pyramid Hotels would undoubtedly be involved in the community whether or not he was trying to live Pyramid’s value of commitment. But he also realizes that being seen living the values—and being able to tell stories about it—helps reinforce the values. “This is the way a business lives—a set of values that reach down through our whole organization,” says Kelleher.

Do the small things right. CEOs must be seen less as leaders and more as partners. For example, layoffs that don’t hit the C-suite will be death to any culture change. And watch the expense account, too. I once had a hospital CEO offer to put me up at a luxury resort while he consulted with me about nursing layoffs. He didn’t even consider how that would be perceived by the nurses who would be left. (You know these things get out.)

On the other hand, living the values commits you to a high standard of behavior because your every move will be monitored by employees also responsible for living them. At 7,500-employee Juniper Networks, one of the leading information technology and networking companies in the world, one of their values is “bold aspirations,” which is linked to the behaviors of “seek[ing] out big, bold challenges” and “embrac[ing] great ideas no matter where they come from.” It may seem like a very small distinction to make, but if the leaders at Juniper shrink from a challenge, perhaps in the face of ugly market conditions, for even a short time, they will undermine belief in those values throughout the company.

Reward for values in the C-suite. This is vital. If you want your leadership team to continually reinforce the company’s values and values-based behaviors, you must reward for them. That means your bonus and compensation system, even in the C-Suite, needs to be based on values-oriented behaviors rather than just financial performance. Everyone at Loma Linda University Medical Center in California, is now subject to a 360 performance evaluation, which affects their bonuses, starting at the top with CEO Ruthita Fike. In fact, all of our clients have put some version of values-based executive review in place. This is one of the reinforcing factors that help companies create what Inc. magazine has called “workforces whose productivity is born of passion, whose loyalty springs from the perception of beneficence and fair play.” Fair play is something you can’t fake. It needs to start with you. Big change? You bet. Leaders who embrace it wholeheartedly are going to see their companies’ cultures improve in a big way, too.

In a 2008 study by the American Management Association/Institute for Corporate Productivity of managers and directors at 1,967 companies worldwide, 61 percent of respondents said that actions by leaders were the most likely to influence the behavior of others in the organization. The researchers were not surprised at this finding, “given the hierarchical nature of most businesses today. Employees are obligated to take their direction from leaders and this includes not only listening to their words but, perhaps even more so, watching their behaviors.”

Leverage that very persistent tendency of employees to follow the leader. Let them follow you to new or recommitted values and behaviors that will astonish your customers.

Ann Rhoades is president of People Ink (www.peopleink.com), a culture-change consulting firm, and the author of Built on Values: Creating an Enviable Culture that Outperforms the Competition (Jossey-Bass, 2011). She was one of the five founding executives of JetBlue Airways; Chief People Officer for Southwest Airlines; and EVP of Team Services at Doubletree and Promus Hotel Corporations. She continues to serve on the board of directors at JetBlue.

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