A.Mandel

I’m an optimist. I’m one of those people that always look for the bright side, the learning opportunity or when the turnaround will come. I see the glass half full. So, when I say there are three unfortunate things about organizational culture, I say that with an eye toward the tremendous opportunity we have to straighten it out.

Josh Bersin, in his latest report entitled “Predictions for 2017” says: “86% of business leaders rate ‘culture’ as one of the more urgent talent issues, yet only 14% understand what the ‘right culture” really is’.  This is also unfortunate but makes a great case as to why we have to pay attention.

Here’s the good news. Even though the following list represents the most unfortunate things about culture, there are some really good, really proactive things we can do about them. The eternal optimist in me says – these are just huge opportunities, and with the right level of vulnerability, curiosity and innovation we can turn them around so that one day they might be considered some of most fortunate things about organizational culture.

1.     Culture is only measured using lagging indicators. Let’s think about that for a minute – what are the ways we can measure the culture of an organization? Employee engagement surveys are the most obvious answer – (and I love Bersin’s definition of employee engagement: “the employees’ response to the organization’s culture”). Sadly though, these surveys are a lagging indicator; once you have the data, you already have a disengaged workforce. Too late. What else? How about turnover – how fast employees are leaving the organization? Oh, well we can only track this after they leave – so then that’s too late too. How about retention of high performing employees? We can certainly measure that in real time, yet we typically only look at that in conjunction with attrition, again making it too late and a lagging indicator. While these metrics can all give you a solid read on the culture of your organization – once you get the data – it’s almost always too late.

You’ve heard the old adage about trust – it takes a lifetime to build and a moment to lose? The same thing holds true for a great organizational culture. It takes a lot of time, deliberate behavior and intentionality to build and with inconsistent words and actions, only a moment to derail. So why do we measure using lagging indicators?

Imagine if we could look at the leading indicators of culture. If we could ask people, proactively, what is getting in the way of the culture they need to be successful? Imagine if we acted upon their suggestions. Imagine if we paid attention to ensuring the right people were in the right roles from the beginning and we onboarded them such that they understood the unwritten rules of the culture and how things get done inside the organization. Imagine if we were able to predict the health of the culture and use that prediction to drive the business strategy?

2. Culture is not owned by the Executive Team – or frankly anyone. It’s owned and driven by everyone. Why? Because culture is about behavior not words. And therefore you can’t legislate it. You can try, many leaders waste a lot of their time doing that. Here’s what it looks like (and this is actually a true story – names are changed to protect the innocent)

Boss: Mary, you are clearly not engaged anymore. Everyone looks to you to see how you are feeling – they take cues from you. You have to be more engaged.

Mary: Well, that’s hard because I’m honestly not engaged anymore. I don’t feel like I fit in. I don’t feel like I’m valued.

Boss: Well, you better get engaged! It’s not an option.

So Mary leaves her boss’s office and what happens? Does she get more engaged? No, of course not, but her lack of engagement goes underground. It gets quiet and even more dangerous. Because now she’s probably what is considered actively disengaged and angry; and the behavior that comes from that anger – well, that’s what’s driving the culture. Not Mary alone – but the collective voice of the angry employees that aren’t listened too, or heard, or feeling valued, or don’t see the correlation between words and actions across the organization.

Additionally, if you noticed, the boss was trying to legislate Mary’s engagement through words. Telling her to be engaged. When the real behavior would be instead to work with Mary to figure out what was going on, what was driving her lack of engagement and remove the barrier. Imagine the difference in culture if the boss did the latter?

Besides just not being owned by the Executive team, the culture is also not owned by Human Resources, or Marketing, or Action teams. It’s owned by everyone in the collective group. Could there be sub-cultures? Of course….and those are also driven by the behavior of all the people in the sub-culture.

Just like the United States, right? This is decidedly a difficult time for America – regardless of what side of the political divide you are on – and that is exactly the point. The culture right now, in this country is reflective of the behaviors of the people. Leadership (the new administration) is trying to force the culture one way, yet the people aren’t having it. Because the current administration, just like administrations of past don’t control the culture – they take part it in – but we all do. And while this is the culture of our country, we each live within various sub-cultures – our state, our neighborhood, our family our organization and many more.

What do we do about this? How is this an opportunity? What if organizations were very clear about the type of culture they wanted/needed to be able to drive the business strategy. What if organizations only hired the kind of people that would thrive in that sort of culture. What if we were able to predict who might thrive in the culture the organization has described, and who might have to work much harder to be successful? What if, as leaders, we carefully defined the environment necessary to create the culture (or sub-culture) we knew we’d need to drive our success? Not only would we have a healthier organization, and one that would likely be positively represented on the transparent websites like LinkedIn and Glassdoor, but we’d also be looking at it from a proactive lens instead of reacting based on lagging indicators.

Two down – one to go….

3.     Peter Drucker famously said “Culture eats Strategy for Breakfast” and yet we are still talking about culture in the absence of the context of business strategy. 

How can we look at something that is so important that it could actually destroy our company performance – yet look at it as a parallel track – where strategy and culture shall never intersect. Why aren’t we looking at the kind of culture we need to drive the very business strategy we work so hard to create?

Do we have a strategy that calls for high growth over the next several years? Why is it that after we create the strategy we get busy defining initiatives, execution plans, project plans, action teams, etc. and yet we never stop and think about the People Strategy that will drive the business success? We don’t think about the culture we need that will push us forward (or how to change the culture we have that might actually eat the strategy for breakfast). Let’s look at an example…

We have a strategy that calls for high growth. What kind of culture will we need to ensure the level of growth we are looking for? Is it one that supports innovation? Agility? Flexibility? What are the behaviors that support those cultural attributes? Do we expect people do try things, experiment and learn from their mistakes? Or do we have policies that outline exactly how people behave, how they dress, and how decisions are made? Do we have an organizational structure that limits or even prohibits talking across silos? Do we insist everyone is in the office from 8-5 every day? These decisions and subsequent behaviors all determine if we have a culture that supports what our business needs.

Maybe we have a strategy that is all about scale, infrastructure and operational excellence. Maybe our overhead is too high and our revenue has slowed down a bit. Maybe we need to figure out how to do more with less. What kind of a culture does that demand?

Without understanding what kind of culture your strategy needs, it happens by mistake. The culture becomes one of default – people behaving, and making decisions according to their own beliefs, principles and agendas. The intentionality of who we want to be goes out the window.

So think about this – if culture has the power to take down a strategy (or eat it for breakfast), how much power could it have to propel the organization forward – toward success. Imagine if we were able to take the negative power and turn it into a positive force for good – aligning with and driving the organization’s big, crazy goals.

Three unfortunate things about culture need to be addressed – today. Now. Imagine if we could be in a work environment that creates success, wellbeing and growth. Led by leaders that understand where the organization is going, how to garner the collective power of the employees and to march together toward a common goal/purpose/mission.

Imagine if we can turn these cultural misfortunes into amazing opportunities. My prediction is, Josh Bersin’s Predictions report will look vastly different in 2018, 2019 and 2020.

In our consulting practice, we’ve created a new exercise that helps leaders and executives think big. “What will the world look like in a few years” kind of big. Here’s how it works:

First, we present the group with a series of facts about how the world of work is rapidly shifting, and how these future changes will transform how we run organizations. These facts are from well-known sources, journals, surveys and researchers. The facts cover a series of categories which include: technology disruptions (like Machine Learning and Virtual Reality), Freelance Nation (what? half of the workforce could be freelancers?), incoming Generation Z (what happened to the Millenials?), the rise of agile, fluid teams (and the subsequent dissolution of the org chart) and workspace trends (Starbucks as the new meeting place?) just to name a few. Teams take a look at the specific facts and make sense of them together. What we’ve found is that people typically have one of three reactions:

1) Fight or Flight: Nah, it’s never going to happen. I don’t believe it. Or

2) Discomfort: This sounds more like “Oh wow, I never saw it that way. That’s scary”. Or

3) Imagine if…..: Just think about all the possibilities if we reframed work through a different lens.

“Fight or Flight” is usually a small percentage of the overall group and one that clearly emanates from a Fixed Mindset (The New Psychology of Success, Carol Dweck, 2007). They seem to hunker down and either disagree or lose interest.

The next two reactions are doors that can lead to thinking big and differently and are associated with more of a Growth Mindset (Dweck, 2007). The most common (and normal) reaction is discomfort. It’s OK to feel discomfort of course, especially if it leads towards a growth mindset – if the discomfort isn’t so bad the individual retreats into fight or flight. The hope is that the uncomfortable reactions instead lead to the third – “Imagine if….”. It is rare, but it does happen, that people jump right into the “Imagine If…” headspace.

After the teams have the chance to digest the facts, we ask them to do some light scenario planning/modeling. Not big heady stuff – just to offer an idea or two of what the world might look like if we take some of these facts and weave them together. We’ve noticed that when the leaders are in fight or flight mode, the next steps becomes disingenuous, not really taken seriously and essentially “just an exercise.” Many times, we even witness a fairly combative tone tied to negation and unwillingness to face the truth (think: head in the sand).

When the leaders are uncomfortable, well, then we’re on to something. Because discomfort can be re-framed. We can look at it through a lens of fear first but then we get the chance to look at it another way – in a more positive way where we can see, or even invent, the possibilities (aka “Imagine If…”). Of course it always helps to have a few of those immediate “imagine if” types in the room to help visualize new futures through a lens of optimism and new frontiers. They tend to balance the openness and momentum away from the naysayers.

This exercise is all about context. Context is a powerful thing and the truth is, if you really want anything to change, you must first change the context and only then will the thinking change.
Let’s think about that a little bit. Context changes produce changes in behavior. Remember the first time you saw your teacher outside of the classroom, maybe in the grocery store or the bank? That was strange, right? Completely out of context. Do you remember what happened the next day in school? Did your perspective of the teacher change?

Let’s think about a broader example – smoking cigarettes. Everybody in the world at this point knows and understands that smoking cigarettes kills people. Every fact points to it, every pack has a warning we see commercials and ads on a regular basis, yet the behavior is, people still smoke. But when their context changes, their behavior changes. When does their context change? When someone they love gets sick or dies, when they themselves get sick or when they become pregnant. Their context has changed.

It happens at work a lot. It has happened to me. I was in a job that I loved. I was good at it, I enjoyed it. Life was great. My context was just fine, thank you. But then there was a change. My boss left. I was asked to play an interim leadership role. I was invited to executive meetings, participated in high level decisions, and was asked my opinion (approval) before things got done. While the truth is, I didn’t like the interim role (which I ended up being in for one year, and learned a tremendous amount) – my context had changed. And when finally, the assignment was over and I was free to go back to my beloved previous job – well, the context remained changed, and nothing was the same again.

“Once you breath the air up there it’s hard to go back” was how my mentor explained it to me. But looking back, it was all about context. I left and found a new job, with new context, new air, which led to new ideas.
At Medius we spend so much of our time working with our clients on changing behavior– both individual behavior and organizational behavior. Sometimes we even work on pushing to change market behavior. But our real goal is helping our clients to change their context. And when we see their reactions – is it fight or flight, or merely discomfort, we can predict who will be most successful. We don’t judge – we coach. We ask questions, we push gently (sometimes a little harder than others) but we help them be successful. The statistics about how often large scale change within an organization is successful are dreadful. It’s rare. And it’s only when the new context is accepted. Changing context changes behavior. And only with real, intentional behavior change can large scale change be successful.

Ever since we started running the exercise about the Future of Work, my thinking has changed. It has broadened, gotten bigger. Reading articles, books, anything really, I keep thinking – What does this mean? What will it look like? What are the implications?

I saw a quote posted on Facebook today from a dear friend. It said:

“Come to the Edge he said. They said: We are afraid. Come to the Edge he said. They came. He pushed them and they Flew.” – Guilaume Apollinaire
Nothing big happens without courage. Even if it’s just the courage to think big. But heed this warning, once you start thinking big – it’s impossible to think small again.

I’ve been told that if we pay attention to the stories, we’ll actually see them repeating themselves. That there are really a finite number of stories that get played out again and again, and if we can identify the story we are living, we might have a better idea of how to predict the outcome. Interesting right? I’ve noticed that this is true……and lately I’m reminded of the story “The Emperor’s New Clothes”.

In case you need a reminder, here is a summary of the plot: “A vain Emperor who cares about nothing except wearing and displaying clothes, hires two weavers who promise him the finest, best suits made from a fabric invisible to anyone who is “hopelessly stupid” or simply unfit for his position. When the weavers report that the suit is finished, they mime dressing him and the Emperor marches in procession before his subjects The Emperor’s ministers cannot see the clothes themselves, but pretend that they can for fear of appearing unfit for their positions. In fact, the Emperor does the same – he can’t see the clothes either. The townsfolk play along with the pretense, not wanting to appear stupid or unfit for their positions. Then a child in the crowd, too young to understand the desirability of keeping up the pretense, blurts out that the Emperor is wearing nothing at all and the cry is taken up by others. The Emperor suspects the assertion is true, but continues the procession anyway.”

If you were anything like me as a child, you thought this was a ridiculous story. Why on earth would someone be afraid to say that they didn’t see any clothes? Wouldn’t they be more embarrassed having the Emperor walk down the street naked, than simply explaining that they couldn’t see any clothes? Well, what’s worse than that is actually watching this story play out in a work environment.

How many times have you seen it? The senior most leader (the Emperor, or in our case, the Executive), convinces him (or her) self that they are special because of their title and that they should suddenly know everything. There is a certain inflection point when this actually happens; is it when they become President? CEO? The Head of a Business Unit? I think it varies, but regardless,

…there is a point when the individual seems to think they are better than they used to be because a title has been bestowed upon them.

Don’t get me wrong – in most cases these leaders earn their titles and their positions and therefore, they have earned the respect that comes with it…in most cases. But, something else happens…. it’s the thing where they suddenly can’t admit when they really don’t know something. And this is when they get into trouble.

Ego – the Hider of All Things Unknown

Ego is a crazy thing…. it’s the great protector, the hider of all things unknown. You know the type – the leader that is very full of him (or her) self – walking around with their chest puffed out, their head held high, summoning their assistant to get them coffee (yes, this still happens) …yet these are the ones that seem to be most unsure of themselves. These are the people that believe asking for help is a weakness, that not having all the answers somehow lessens them as human beings and thinking they should automatically know how to do something they’ve never done before. So, they hide it – they hide the fact that they don’t know what they are doing, and they tell themselves they do. They don’t ask for the help from people that might have different experiences, that might know what to do in this or that special circumstance – they let their ego get in the way. And that, my friend, is when it becomes dangerous.

It’s happening a lot now – besides just the ridiculous, absolutely ridiculous political arena we are watching play out in the US, it also happens with companies. With all the start-up and high tech companies growing so fast and merging and acquiring each other, scaling is difficult. Yet, investors are taking very big bets on sometimes young, and sometimes very green leaders. Financial targets are big, and egos are bigger. Take Parker Conrad for example. He was the CEO of Zenefits – do you know Zenefits? They are the new benefits platform for small companies – they sell Software as a Service, so all you really pay for is your insurance premiums and the fee-based services, not the software. It was a great idea and everyone knew it. They grew fast and furiously:

• In 2013 they launched with $20,000
• After 8 months, in early 2014 they were at a $1 million run rate in revenue
• By the end of 2014, they were over $20 million in revenue and went from 15-420 employees
• Their goal for 2015 was over $100 million in revenue

And in Walks the Emperor

And then it happened…. The naked Emperor showed up. The growth was fast – hypergrowth they call it – and that caused the leadership to operate in some ways that might not have been exactly above board. They had a big fight with one of their partners, ADT, that got ugly, but then after the damage was done, the case was dropped. They used a very high pressure sales force to sell more fee-based services to their customers, and they hired unregulated/unlicensed brokers to sell insurance. In other words, they weren’t going to make their very aggressive targets so they stopped at nothing to do the best they could. I wasn’t there – but I bet there wasn’t a lot of asking for help, or admitting they didn’t know exactly what to do. I bet there weren’t a lot of truth tellers. And so, the inevitable happened. The board called for the resignation of Conrad and replaced him with David Sacks – the then COO. Sacks had some more experience than Conrad, at both Yammer (which he eventually sold to Microsoft) and PayPal.

The question I have about the situation at Zenefits is this – were the townspeople saying to their Emperor – “you look great in those clothes”, or did anyone act as the child, and yell out “you are naked, man!”.

Zenefits isn’t the only company that has fallen victim to the naked Executive…. many companies have. Yahoo maybe going through something similar as we speak. Is Marissa Mayer listening to her townspeople? I saw an interview recently with Katie Couric talking about how great Marissa is to work with. I like Katie a lot, but I question her motives – was she asked to do that? Did she do it because she has a very lucrative contract? Is she one of the “weavers”? I really don’t know.

What happened at Blockbuster? Remember them? Didn’t someone ever say “hey, dude, everyone seems to be streaming and we still are telling our customers to “be kind and rewind.”

Money, power and ego do crazy things to people. While most of this article was dedicated to what goes wrong, there are some really great leaders out there that recognize how important it is to stay true to themselves. There is nothing easy about running a company – especially a publicly traded one that must figure out how to weigh the short term shareholder returns with the longer term growth strategy. There is experience, intuition and surrounding yourself with great truth tellers that you trust. There is the notion of focusing on the employees, believing in the service profit chain (a focus on employees will drive customer engagement/satisfaction which ultimately results in shareholder returns – not the other way around) and driving an intentional and deliberate culture – that matches the company’s growth or business strategy.

Are you a Naked Executive?

There are some telltale signs – here are 5: You might be naked if:

1. The last time you listened more than you spoke was several years ago – before the promotion.
2. You love your direct report team so much because they support every single one of your ideas.
3. Sometimes you wake up in the middle of the night in a cold sweat thinking “one day they are going to find me out.”
4. You might get an inkling that something is not right, but you hear it from someone so far down the organization chart, that you just don’t listen.
5. You actually believe you’re fooling someone

The best leaders, even those with big egos, listen to their people. This listening gives them the perspective that they need to see things more broadly, hear things that are not being said and therefore recognize when they are walking down the street naked. Here’s to the leaders that recognize that clothes matter.

* Coming soon – What to do if you work for/with a Naked Executive