Let’s face it: in today’s digital transformation era, culture matters more than ever before. Why? Because after you complete digitizing all your processes and hand your customers the keys to the kingdom (for the sake of transparency), you will discover a simple truth: you have no differentiation. Your customers serve themselves through your digital platforms and expect you to compensate them for their efforts. Welcome to the acceleration of profit erosion.
Unless you develop a solid, authentic culture that empowers your people to help customers at the speed they demand and with the authority they require, your future profitability is at risk.
But culture is a funny subject. Every CEO claims they have a great one. They will even point to an elegantly documented mission, vision, and values hanging on a wall. As the CEO of my company, I had to accept the painful truth that I will never be able to predict the full scope of our culture. I can influence and contribute to the culture, but not control it. I always tell my clients that, as a CEO, I never know if my jokes are funny because I don’t know whether people laugh because I am the CEO or because I actually shared a funny anecdote. The culture is what people say when the CEO leaves the room. Every CEO must live with that fact, and it requires a lot of effort and trust. I must admit, it is painful sometimes.
We recently conducted a cultural assessment on behalf of a large financial services organizations, and we were not surprised to find out that the culture statement on the wall was very misaligned with the culture within the organization. Employees followed their own beliefs and acted accordingly. The tribal narrative ate the PR narrative for breakfast every day. One of the saddest aspects of the culture we uncovered was a culture of empowerment—but this was a different kind of empowerment.
While most people will consider empowerment as “the power to say yes,” at that organization, most people were empowered to say “no!” Too many people held the power to stop, delay, and otherwise avoid new initiatives in the name of risk management, compliance, and other excuses cooked up by people who refuse to see the big picture due to turfism. The “power to say no” was very visible during meetings that were attended by dozens of people, but no one felt accountable to make a decision. Everyone, however, was compelled to say “no” in the name of the department, initiative, or program they represented. The result: an organization who lags behind the competition by several years.
The empowerment to say no, while initially attempting to protect the organization, does come with a price a hefty price, one that is often not fully recognized until it is too late. An organization that does not proactively create a culture of trust and empowerment creates a culture of delays, procrastination, and silos by default.
Culture is not a nice-to-have, pixie-dust-peppered HR initiative to make people smile. Culture drives strategy execution. The right culture will accelerate relevance and competitiveness in the marketplace. The wrong culture will keep you years behind. It is the root cause of your employees’ decisions, actions, behaviors, and advocacy. Together, they account for your brand equity, customer relevance, and ultimately, your profitability. So, before you rush to analyze the latest products and market conditions or update your sales plan, get to the root cause—the heart of it all. Get to understand the hearts of your employees and how they feel working for your company. Get to know what they actually do in the name of those feelings so that you can proactively manage your culture. This is where the success of any strategy or transformation lies.
What you will discover initially may not be pretty. Make sure you have a guide who can help you confront the full, honest truth—there is no point in sugar-coated versions of it. And when you’ve identified the tribal culture in your organization, you will be able to make the first steps toward addressing it and mobilizing your people to execute on the vision and strategy you are so keen to implement so that you may survive and thrive.