4 Ways to Create a Culture of Courage

Sometimes, the biggest threat to your organization isn’t the most visible one. While CEOs have been wrestling with declining revenue, intense global competition, and disruptive new technologies during the recession, a far more insidious disease has been spreading throughout organizations – fear. Specifically, fear of loss.

Over the past several years, I’ve seen firsthand how the threat of losing budget, headcount, a bonus, or even respect led employees from the executive suite to the front line to put up walls. Fear of failure compelled them to create defensive barriers that might have protected their ability to succeed locally but did not take into account how those decisions affected others in the same organization. These barriers caused rampant bureaucracy, and led these companies to destroy themselves from the inside out.

The only way to oversome these challenges is to root out this type of fear, and replace it with a culture of courage.

In fear-ridden companies, employees learn that empowerment is a pipe dream and that the only way to survive is to obey direction without question. It’s up to leaders at all levels to give employees the encouragement, energy, and support to try new things and to focus on the greater good of the overall organization. Leaders can foster courageous behavior through four types of actions:

• aligning vital courage and moral courage
• matching responsibilities with strengths
• engaging employees
• rewarding courageous behavior

Aligning vital courage and moral courage. Shane Lopez and the late C.R. Snyder are perhaps the foremost experts in research regarding hope and courage. There are two types of courage that apply particularly well to organizations: vital courage and moral courage. Vital courage is the “inspiration for actions that improve one’s lot in life or that ultimately promote survival.” Moral courage is “the authentic expression of one’s beliefs or values in pursuit of justice or the common good despite power differentials, dissent, disapproval, or rejection.” While vital courage is inwardly focused (survival), moral courage is outwardly focused (ideology). Vital courage is about what’s best for the employee. Moral courage is about what’s best for the organization.

Examples of vital courage include when an employee takes a risk or does something extraordinary to further his own standing in the company. Taking these actions may limit his personal time or cause difficulty in his normal day-to-day routine. But the intent of the courageous activity is “what’s in it for me?” In its benevolent form, vital courage might include working an extra shift, writing a new proposal, or taking night courses to qualify for a raise. Though these actions further an individual goal, they also help the organization accomplish its overall mission. But in its malevolent form, vital courage may lead to gaming a bonus, manipulating data, scheming against colleagues, or stabbing others in the back. Essentially, the difference between the benevolent and malevolent forms of vital courage is whether the actions benefit the greater purpose of the organization or benefit only individual employees or their departments.

Moral courage manifests in the workplace when an employee takes a risk or goes the extra mile — not necessarily because it benefits him personally, but because it’s best for the organization. The clerk who stops what he’s doing to help an elderly customer around the store even though it will make it more difficult to complete his other tasks on time is showing moral courage. The employee who jumps in to help a coworker, even though it may mean working late to complete her daily responsibilities is displaying moral courage.

In fear-ridden companies, employees may be expected to display moral courage at the expense of vital courage. The problem is, vital courage usually wins. Employees might display vital courage by resisting the urge to take a risk or to make a decision because doing so might result in them losing their job. When faced with the choice between doing what is best for the company while creating harm for yourself versus improving your lot in life regardless of the impact on others, many will choose the latter. Consider the following situations based on real-life examples from a financial services company.

Managers in Company A were evaluated and paid based on the average production per hour of their team members. Once frontline employees met certain internal requirements, they were technically eligible to enter a “development pool” for additional training and eventual assignment as a manager. Assignment to the pool was considered a promotion.

George was a leader in this company, and he was asked to nominate someone to enter the development pool. He nominated his best performer who also had, in George’s opinion, the most management talent. After that person left his group, his team’s average production declined. After all, he’d lost his best performer. As a result, George’s pay declined sharply, and he received a poor performance review.

Sherry was the leader of a second group and was also asked to nominate someone to enter the development pool. She chose her worst performer who could not even manage himself much less other reps. But, as a result, once that person left the group, Sherry’s pay increased sharply because her average had gone up (now that the poor performer was no longer there to drag the group down), and she received a glowing performance review for improving her numbers.

George decided to display moral courage by doing what was best for the company, even though he suffered as a result. Sherry, on the other hand, chose to exhibit vital courage by looking out for herself, regardless of what was best for the company. Neither scenario is good; both are guaranteed to fail. If employees are forced to choose between what’s best for themselves and what’s best for the organization, then the organization will never overcome its fear-based barriers.

Leaders need to make employees feel comfortable and motivated to perform acts of moral courage. The key is to design rewards and performance management in a way that balances and aligns both types of courage. When vital courage and moral courage coexist and are in alignment, then employees will be rewarded when they do something that benefits themselves as well as the organization as a whole — and face consequences when they harm overall success.

In the previous example, if the managers had received a bonus if the person they nominated was successful, then in both cases, the right person would probably have been nominated. Neither George nor Sherry would have suffered as a result. In fact, a different company in the same industry was faced with the same dilemma, and it solved the problem by giving the referring supervisor a bonus if the person nominated for promotion met his or her first-year goals. As a result, only those with strong management talent were promoted, and the referring supervisors were compensated for the temporary decline in their numbers.

Matching responsibilities with strengths. Different jobs require different talents. For employees to excel and use their talents to adapt to new situations, they must have the innate ability to do so. This may seem obvious, but all too often, organizations move people into positions without regard for their individual talents. In fact, in many companies, the only way up is through a management role, which penalizes those who are more talented as individual contributors than as managers. They’re taken out of roles they are well-suited for and given roles in which they’re weak. Furthermore, management shouldn’t be a prize for performance. Managing people is simply another job that should be filled by those with talents that fit that role. But that is some employees’ only hope of progress — and the company thinks that training will fill in what the employees lack.

Companies can find ways to allow people to grow in their role. Thought leaders, subject-matter experts, coaches, and innovation specialists are just a few examples of career paths that companies can create for highly talented high-performing workers whose talents exist outside of management.

Engaging employees. As mentioned earlier, employee engagement is strongly linked to business performance. Engaged workers generate more profit, create stronger customer relationships, have fewer safety incidents, are less likely to quit, and are more productive than disengaged workers. Engagement provides the energy that fuels a workplace.

Managers are the fulcrum of engagement. While barriers that lead to harmful bureaucracy are generally created incrementally all over the company, engagement is created locally between one manager and one employee. That’s why there can be — and often are — extreme variances in engagement and performance among workgroups within the same company. Talented managers engage their people, and untalented managers don’t. Many companies have workgroups in the 90th percentile of engagement as well as workgroups in the 10th percentile, compared to Gallup’s overall database of engagement. In essence, a company can have as many cultures as it has workgroups.

Breaking down fear-based barriers can reduce this variance, because barriers inhibit engagement. However, just because the pyramid of bureaucracy has been destroyed doesn’t mean employees will necessarily become engaged. There may still be local issues unique to each workgroup. But when the barriers are removed and employees have greater freedom, companies can effectively and promptly address these local issues. It’s much easier to bring an organization to a consistent level of high engagement once bureaucracy has been tamed.

Engaged employees are good for business: In a financial services company, higher levels of engagement meant stronger productivity. In a manufacturing firm, greater engagement resulted in fewer accidents. In a hospital, increased engagement led to improvements in patient outcomes and safety rates. Other businesses saw increased sales, lower turnover, better customer relationships, and higher market share. What all of these organizations found is that engaged employees are a prerequisite for courage and success. Once people are willing, able, and allowed to be courageous, the next step is to reward them for their courageous behavior.

Rewarding courageous behavior. When transformational change occurs in an organization, some will immediately adopt the new system, but others will wait and see. Both responses are sensible. To get more people to try things the new way and embrace change, reward the brave few who take the first tentative steps.

The reward doesn’t have to be a trophy or a bonus; it could be a note from a manager, a pat on the back, or a story told at a department meeting. Whatever the vehicle, leaders should reinforce and celebrate courageous behavior. And the reward should be meaningful to the person you are rewarding and clearly linked to the types of new behaviors you are seeking. For example, if a group is trying to increase empowerment and an employee finds a new way to fix an old problem within established guidelines, then treat him like a hero — and make the celebration meaningful for him.

In the end, by focusing on aligning moral and vital courage; matching responsibilities with strengths; engaging employees; rewarding courageous behavior; and aggressively rooting out parochialism, territorialism, and empire building, a company will have almost everything it needs to create a culture of courage.