Culture Is A Four-Letter Word

by Steven L. Blue, President & CEO of Miller Ingenuity and author of  “American Manufacturing 2.0“

When I started to write this article I originally titled it “Culture Is Not a Four Letter Word.” It was intended to address the CEO’s who think culture is a squishy, beer for lunch, feel good concept that doesn’t deserve a place at the grown-ups table. I wanted to demonstrate how wrong-thinking that can be and make the case for the power of culture and why it should be at the top of every CEO’s list.

I was prepared to make a compelling case to convince CEO’s that culture is every bit as important as strategic planning. I was ready to cite all kinds of studies and dazzling statistics that prove that positive cultures create positive financial performance.

But now I know I don’t have to thanks to a four-letter word: Uber. Uber’s toxic culture is front and center this week in the news.

According to recent reports, Uber has engaged in everything from sexual harassment to stealing driverless technology from Google. Even some of its own investors claim the company fosters a toxic culture.

There is that four-letter word again. You know, the beer for lunch, don’t bother with culture mind-set. Culture can be a four-letter word if it is ignored. Culture can be a four-letter word if is toxic. And toxic cultures kill more businesses than recessions. And it is liable to kill Uber too.

So what went wrong with Uber? How can a company that claims its values are “making communities safer” and “standing up for its driver community” go so horribly wrong? That is because those are only what I call “bumper sticker” values. Values that look good in an annual report but have no real meaning inside the company. Wells Fargo is a perfect example of this. Two of Wells Fargo’s key values are “ethics” and “what’s right for customers”. And yet they defrauded their customers by creating over 2 million ghost accounts.

There is often a difference between bumper sticker slogans and the real values that lie beneath. Value statements are always warm and fuzzy. But a company’s real values are manifested by how they act, not how they claim they act. And at the end of the day, the culture is nothing more than a collection of values. And values dictate how employees will behave. Such was the case with Wells Fargo. Such is the case with Uber.

If you’re a CEO, don’t wait until an Uber-like disaster strikes before you do a values check-up. But don’t have the human resource people ask employees what the company values are. Don’t declare what you think the values are and expect people to behave accordingly. That never works. Here is what you should and shouldn’t do:

Do not make this an exercise for the human resource department. If it is to be taken seriously, it has to come right from the top. People need to know that values matter.

Have an outside professional survey company conduct an anonymous survey and ask every single employee in complete confidence what they think the company values are. You may be astounded by the results.

If the underlying values are not the same as the bumper sticker, find out why. What is driving the difference? Chances are you’ll find operating managers are the root cause. Or you might be the root cause. As an example, many operating managers don’t give a hoot about anything other than results. Of course results matter. No company can prosper without positive results.  But results without appropriate values are often temporary, or in the case of Wells, only illusory.

Reality check time. Does your company have the “right” values? By that I mean values that serve your employees, customers, community, and shareholders equally. Values that form what I call a “culture by design, not default”. If not, it’s time to change them.

Let’s assume you have the “right” values (you may, but I doubt it). Start at the top and go layer by layer. Those that don’t believe in, won’t abide by, or demonstrate the values have to go. This sounds simple, but it is not easy. But it is essential. If your top managers ignore the values everyone else will. This is a multi-year process that you must undertake carefully and delicately, otherwise the business will crash and burn. Take it one step at a time, one manager at a time. Once you start replacing managers for values reasons, the whole organization will begin to behave differently. People will applaud you for doing so.

Don’t let anybody in the front door that doesn’t fit in with your values. Interview potential new employees with values in mind. Don’t just state the values and ask if they agree. Of course they will agree, they want the job. Ask them what their values are. Ask them what values they would admire in a company. If their values don’t match with company values, don’t hire them. No matter how good they are. Otherwise, they will be like an infectious disease on the organization.

Bottom line, make values a key part of performance evaluation. Don’t make this a check off the box exercise. Make values the standard for promotions and compensation increases. And make values a key determinate in terminations. By instilling the right set of values, you’ll save your company from becoming a four-letter word too.

 

Steven L. Blue is the President & CEO of Miller Ingenuity, an innovative company revolutionizing traditional safety solutions for railway workers, and author of the new book, “American Manufacturing 2.0: What Went Wrong and How to Make It Right: What Went Wrong and How to Make It Right“. Connect with Blue on Twitter, @SteveBlueCEO.

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