WHY LEADERS HAVE SLEEPLESS NIGHTS ABOUT CULTURE

In business, culture is your competitive edge – and leaders who pay attention to culture achieve superior results. Here are some things to do to ensure a strong culture.

Organizations with rich, healthy cultures achieve income growth seven times higher than those with less well-defined cultures. As a result of their strong cultures, those companies are also better at attracting the talent that enables them to keep generating growth and value.

Leaders who pay attention to culture achieve superior results. This was the finding from research I did among 30 CEO’s for my new book, People with Purpose. I also commissioned special research from global online polling company YouGov, among 1900 managers and 2200 employees.

What became clear is that leaders who create strong cultures do so by articulating a set of values that they live by, and then making sure their managers and people live and breathe those values too. They make those values central to creating a shared sense of purpose with everyone in the team, as well as ensuring everyone is working to an aligned set of stretching goals.

With the health and growth of their businesses at stake, it’s no surprise that trying to achieve this can take every waking moment.

Follow these tips from CEOs who have focused on culture to enable success:

1) Think carefully about your values
Ensure that they reflect the DNA of your organization and that they encourage the behaviours that will enable you to achieve your goals. Too often, leaders describe values without sufficient explanation to have meaning, and that cannot truly drive culture.

Dame Louise Makin, CEO of specialist health-care company BTG, says: ‘I honestly believe that the absolute key to our success is the quality of our people and the way we conduct our business. Everything we do is guided by our values, which we long ago designed to underpin and foster a culture that would enable us to grow fast and be a meaningful company. Every step of the way we have made sure that we have had, at our core, integrity, teamwork, accountability, delivery, openness and continuous learning as our values.’

2) Put your leaders on the front line
To understand the culture and what changes are necessary, leaders must spend time on the front line of the business.

Vernon Everitt, MD of Customers, Communication and Technology for Transport for London, describes developing the culture as being all about trying to see life through the eyes of the customer. To do this, TfL has initiated a ‘front-line experience’, where all the senior leadership have to spend at least two weeks of the year out in the field, acting as a revenue inspector on the Tube, or on the bus service, or mopping the decks at one of the piers where the river boats turn up. ‘It’s only by doing this, by standing shoulder to shoulder with staff, that we can truly understand their experience and help them deliver a better service.’

3) Create a strong set of values to empower and energize people
Your culture – the way you express your purpose and values to employees – should enable everyone in the organization to make decisions in your absence, based on knowing what you would do.

Organizations that create more leaders are more agile. To create more leaders, you need to empower more people to make decisions without always going up and down the management chain. To achieve this, leaders need to provide a resonating purpose and clear principles.

In 2010, Debbie Hewitt MBE was appointed to help turn around the failing Moss Bros Group. At the heart of the company’s recovery has been the motivation and ethic of its people. ‘The previous mission statement didn’t engage or energize our people,’ says Debbie. ‘It wasn’t the reason people came to work every day. We needed to describe it with more emotional language – to make men feel amazing.’

4) Make sure middle managers live the values
Managers either enable or kill the values you want lived in the organization. Employees, no matter how keen, will not be able to live and breathe your values if your managers don’t. No matter how much the top team lives the values, if your middle managers are not doing so as well then culture breaks down.

Killian Hurley, chief executive at Mount Anvil, a specialist property developer in London, says: ‘One of our core values is to relentlessly strive to do the right thing. That means when we are hiring people, one of the qualities we are looking for is decency. We want people who, when faced with tough choices, will do the right thing. We absolutely know that the right thing to do is the best thing to do.’

But YouGov research shows that many employees do not believe their managers actually care about the purpose of their organization, nor do they believe that many of their managers live the values of the company. It is here that culture breaks down, and employees become cynical about the company’s values. Unless all managers also live the values in their actions and words, it is impossible to deliver the strong culture that can be such a competitive edge.

5) Beware of barriers that prevent people from living the values
Nothing kills engagement and motivation faster than inconsistency. Too often, leaders accidentally put policies in place that prevent employees from living the values. When you remove the barriers, and encourage the values, you can transform performance.

At Odeon and UCI Cinemas, poor performance was linked to employees’ general lack of any sense of shared vision, common culture, or faith in their leadership. ‘We actually put barriers in their way when we asked them to live our values,’ describes former chief executive Paul Donovan. ‘For example, we had a policy that wouldn’t allow our employees to see any new film for the first two weeks. When customers came in and asked about movies, staff just shrugged. They couldn’t say anything.’

Improvement has stemmed from the creation of a very clear vision and values: ‘We want our staff to be film fanatics, committed to delivering excellence through teamwork, in an informal and empowering environment, which will allow their passion to shine through.’

6) Your values bond customers to the brand
Your values bond customers to the brand, so make sure there is consistency between your internal culture and external expectations.

Steve Hood, chairman and chief executive of Trust Ford, the dedicated Ford dealer group, says: ‘If you can embed your values in everything your employees do, you can create a differentiator for your brand. Your culture is hugely important, both for attracting the right employees and winning and keeping customers. If you don’t have engaged employees living your values you’ll never retain your customers.’

David Statham, managing director of Southeastern Railways, fully agrees: ‘The values you choose and live are crucial to your success. Happier customers give us long-term security’. To achieve happy customers, David explains, ‘You can’t make rules for every single circumstance. You have to provide a framework that enables employees to make individual decisions every single day. You can only do that by instilling in them a sense of personal purpose. The people who travel on our networks are our colleagues, families, friends, neighbours. So it’s all about looking after people we know. Everyone has an opportunity to make a difference.’

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