A few years ago in Europe, I asked a group of business leaders if they had the right culture. Someone responded that their company had purchased tickets to the opera. Today, the issue of culture is no longer a joke or afterthought; it is central to business success. Peter Drucker is attributed to have said, “Culture eats strategy for lunch.” Culture was the word of the year for Merriam Webster dictionary in 2014 and has been the cover and regular stories in management books and articles and the subject of 100’s of corporate off-sites.
Many firms that are seeking cultural transformation lack clarity on how. One firm wants to refresh its culture by updating its value statement and making sure that employees act consistently with the new values. Another firm has spent millions in advertising to revive its brand in the market, but they are not seeing the results they anticipated. Another firm has recognized market changes, and they want to revamp their mission, vision, and strategic agenda to anticipate and respond to these changes. Finally, another firm wants to change (or transform or disrupt) their “culture” but is not sure what that really means or how to proceed.
Too often, many of these well-intended culture transformation journeys begin with fanfare and promises and end with fizzle and disappointment; the culture journey is a cul de sac recycling old ideas that end up with gibberish and cluttered intellectual concepts that yield few results. Let me offer 4 options for achieving the promised impact of culture.
First make sense of elements of an overall transformation journey. As leaders embark on transformation efforts, they should be clear about four overlappings, but different, concepts—purpose, values, brand, and culture.
• Purpose represents an aspiration for what can be; it can include a vision of an idealized state of what we want to become, a mission statement for why we exist, and strategies and goals of where and when to invest to get there.
• Values represent core beliefs, what we stand for, and how we go about doing our work. Values, using a tree metaphor, are the roots. They are often articulated by the founder, stated in a value statement, and stable over time. They are also often generic and consistent across companies, including noble values such as integrity, empowerment, excellence, accountability, service, passion, and so forth.
• Brand represents what a company is known for in the marketplace, shifting from a specific product (Ben and Jerry’s Ice Cream) to a firm brand (Unilever’s commitment to sustainability). Brand represents promises made to customers about a specific product and also how the firm will interact with customers in all exchanges.
• The right culture is the identity of the firm in the mind of its key customers made real to employees. This definition moves internal values focus to the value of values because it connects culture to the marketplace. This cultural definition translates the external firm brand with customer promises into internal organization actions for employees.
As shown in Figure 1, these four concepts can then be connected to ensure that a firm turns purpose into the right action that yields desired results. Without connecting these concepts, change efforts concerning them often lack impact.
• Purpose without values lacks heart and passion.
• Values without purpose are aimless.
• Purpose without brand identity results in empty promises.
• Brand identity without culture delivers false hopes.
• Values without culture have no sustainable impact.
• Culture without brand identity is indistinct.
So as leaders try to create their future, they can be deliberate about building purpose statements that articulate what can be, conscious of values that give meaning to employees, aspirational about creating a firm brand with key customers, and disciplined to build the right culture that connects customer promises to employee actions.
Figure 1: Relationship Among Purpose, Value, Brand, and Culture
Second, define the right culture. Following the logic of Figure 1, the value of culture is that it shapes the right behavior. Who defines what is right … the leader’s personal values or the customer who acts on those values? Satya Nadella, Microsoft CEO, recently said, “Last week in my email to you I synthesized our strategic direction as a productivity and platform company. Having a clear focus is the start of the journey, not the end. The more difficult steps are creating the organization and culture to bring our ambitions to life. [sic]”
Culture matters, but the right culture matters more. Generic values (like integrity, trust, transparency) obviously matter, but the real differentiating value of values is helping organizations turn customer promises into tailored internal cultural norms.
In this logic, culture is more than employee experiences, physical setting, norms, values, beliefs, and statements of noble purpose. The right culture turns a firm’s external brand into a set of internal thoughts and actions.
A cultural transformation journey starts with customer promises and firm brand that provide a clear direction for the culture change journey. Culture can then be managed against this desired destination. Culture can be measured not just in how employees behave, but how employee behaviors affect customer promises and vice versa.
A number of months ago, the New York Times wrote a scathing piece on the dysfunctions of the Amazon culture. They cited employee abuses, which are obviously wrong in any setting, but they went on to criticize the culture as demanding, rigorous, and driven.
When I teach any group and ask “Who has purchased from Amazon?” nearly everyone raises their hand, many committed to Amazon prime. Then, when I probe “Why?” the answers are consistent: easy to work with, accessible from anywhere, predictable delivery within a short time frame, low cost, and so forth. So, I then ask, if these are the reasons you (and millions of other customers) choose Amazon, what does Amazon have to do inside to realize these customer values? Quickly, participants realize that to meet their (the customer) expectations, Amazon requires a culture of discipline, rigor, standardization, and precision. Customers want Amazon to be predictable, so they need a culture consistent with those promises. Amazon has the right culture for their customers.
Likewise, Marriott’s commitment to customer service comes from an internal culture of high employee service; Disney’s theme park culture of guest experience requires an internal culture of employee experience. Apple’s public commitment to innovation draws on an internal culture of employee experimentation. Walmart’s “always low prices” identity leads to a culture of cost-consciousness in all aspects of work.
Again, culture matters, but the right culture matters much more. Leaders can work with marketing and advertising groups to articulate the desired firm brand. Leaders can then work with HR professionals to turn this external identity into a set of organization policies and employee actions.
Third, focus on actions that make a real difference. Don’t invest in a brand that communicates to the marketplace without equal investment in how it translates to the employee actions in the workplace. Ad agencies would be wise to couple their brand-building activities with investments in how to make these real to employees who fulfill customer promises. For example, we have seen some ad agencies (that propose a firm’s brand) work with leadership development experts to make sure that the leadership brand reflects the developing firm brand. When a customer is promised a service, the employee who renders the service needs to fulfill it per the agreement.
At the bottom of Figure 1 are actions and impacts that are a result of a company’s culture. We want to not just talk about culture: we want to make it the right culture. With the values being the roots of the tree, the right culture constitutes the branches that grow into the future and sustain the underlying values. In creating a new, right, and sustainable culture, leaders shape four agendas:
• Intellectual agenda: What is the message we want to share about what we are known for both outside to customers and inside to employees?
• Behavioral agenda: How does the desired culture shape daily personal employee behavior?
• Process agenda: What processes (e.g., staffing, training, resource allocation, etc.) need to be aligned to the desired culture?
• Leadership agenda: How can leaders personally model the desired culture?
Few would doubt that “culture” matters to employees, customers, and investors; most have experienced good and bad cultures. Turning cultural aspiration into sustained impact is enhanced by connecting culture to purpose, values, and brand, by forming the right culture, and by turning cultural ideas into employee actions and organization systems.