As Colorado business owners and executives, it is easy to focus on implementing a long list of employee perks that capitalize on the active lifestyle our state offers to attract top talent. This includes ski trips, yoga classes, healthy snacks in the breakroom and more. While these benefits are important and contribute to employee wellness and happiness, there is something larger and less tangible but arguably more important that you should be focused on—cultivating your culture.
Organizational culture goes far beyond perks. It is about sharing the same purpose and values, working toward similar goals, building relationships, finding meaning and pride in the work that you do and, ultimately, improving the performance of your business.
Culture can be an organization’s key competitive advantage because it is unique to the company and cannot be replicated. Cultivating the positive aspects of your company’s culture results in more engaged and fulfilled employees. And, there is no one more important to your success than your people. Research from Growth Everywhere shows that companies with strong cultures outperform their competition by 20%, earn up to 1.7% more than their peer firms and perform 2.1% better than industry benchmarks.
When our law firm approached 50th year in business in 2018, we sought to find a way to ensure that the firm’s values lived on after the founders of our firm were no longer present, every day. We wanted to institutionalize and operationalize the positive aspects of our culture created by our founders so that they would be carried on as we became a second-generation firm.
Extensive research illuminated that relationships — with colleagues, clients and communities — are the key reason why people come to, remain with and hire firms. We also identified authentic values that drive performance. For us, it was all in, excellence, respect and giving back. When a company makes decisions that are in sync with its values, the firm will succeed. As the quality and value of the work improves, the ability to acquire and expand clients grows and the company can retain and recruit top talent.
In advance of our 50th anniversary, we developed and launched a strategic initiative to educate, engage and empower our employees regarding our purpose and values with the ultimate goal of having our values incorporated into every significant decision they make, every interaction they have and every outcome they deliver. The intention was not to create a new culture or change our culture (most experts on organizational culture believe that is virtually impossible), but rather we sought to be more intentional about our culture in order to make it a cornerstone of running our business.
Incorporating our values into our compensation decisions, performance reviews and recruiting process was the first step. We also focused on improving governance, strategic planning and leadership development. For instance, we’ve designed a program for future firm leaders, revamped our onboarding process to better reflect the firm’s values and developed a training program to help provide feedback consistent with our values. The firm also recognizes one employee annually who embodies the firm’s values and inspires others.
Operationalizing our values and implementing them into every aspect of our business has resulted in better client service and outcomes, enhanced professional development and improved recruiting and retention because our people are now more often working toward a shared mission. Our employees have also reported finding more purpose and meaning in their work. We credit this recognition directly to our intentional efforts to cultivate our culture. Our changes have also resulted in record financial performance.
Cultivating your organization’s culture requires a long-term investment of time and talent. There will be critics and initiatives will fail, but if it’s done well, investing in your culture will yield a return on that investment both financially and in the quality of employee experiences. As Simon Sinek, one of the world’s most respected thought leaders on culture, says, “All organizations start with WHY, but only the great ones keep their WHY clear year after year. Those who forget WHY they were founded show up to the race every day to outdo someone else instead of to outdo themselves.”
Not all company growth comes from selling more, explains Wes Gipe, Founder of Agil IT, in the video above. “I had been so externally focused,” he says. “I was focused on growing the business. I really didn’t spend a lot of time thinking about the success of the people within the organization.”
Photo courtesy of Aileron.
CEOs are tasked with growing the business and driving strategy. There are different types of strategy: product superiority, customer intimacy, and operational excellence. Each of these strategies can drive a competitive advantage. But one of the most important questions CEOs need to step back and answer is, “What drives a sustainable competitive advantage for the organization?”
A great strategy may drive customers to your company, but a sustainable competitive advantage can keep customers with you over time.
Culture: A Sustainable Competitive Advantage
A strong culture can be a sustainable competitive advantage—if not the only sustainable competitive advantage—because it cannot be duplicated, unlike a product, price point, or delivery system. A healthy company culture provides an environment that supports stronger recruiting, retention, increased customer intimacy and loyalty, greater productivity, and an increased sense of employee ownership. A strong culture also directly impacts the bottom line.
Allow Employees to Flourish
Image courtesy of Aileron.
Strategic, social, and structural influences are what shape an organization’s culture. There’s a three-part, intentional process to set the climate that will allow individuals to flourish:
- Define the culture: Have you clarified the driving organizational values, beliefs, and behaviors that will help you distinctively serve your customers?
- Align the culture: How do you turn your values into ongoing norms of behavior within your organization?
- Monitor the culture: How are you supporting the environment? How are you getting and giving feedback?
Part of this culture design process requires a change in perspective for many CEOs. You may think delivering results is your primary responsibility, but part of your responsibility is fostering culture and growing the individual and team talent needed for today and the future.
“An organization’s leaders need to revisit how they view their structure, including how they see themselves as supporting the rest of the organization,” says Mary Connors, a 2-Day Professional Management Workshop facilitator at Aileron. Shifting from a manager mindset to a coaching mindset gives you a more participatory, supportive role with your people.
“Everyone within the organization needs a voice in co-creating the collaborative culture, and leadership's role is then to support and engage that process,” adds Mary.
Supporting Positive Change in Your Organization
As Mary argues, you’re never truly “building” your culture because there is already a culture in place at your company. What you are doing, however, is evolving your culture every day. As a business owner, you’re uniquely positioned to shape your culture in a way that can drive long-term value for the organization.
Knowing this, here are three actions you can take to invest time in developing your culture:
1. Make sure your vision, mission, and values are clear.
Your vision should be written in the future tense and can describe what you want the business to become. The vision should be attainable, believable, and easily understood by employees.
Your mission is the company’s purpose in life. It’s a brief statement that summarizes your reason for existing. It should be clear, defines what you do, and should capture the soul of the organization.
Your values are “how we do it.” Having complete clarity around your vision, mission, and values supports decision making that contributes to a healthy culture. “Individuals will feel comfortable and safe within an environment when you are very clear on the vision, the mission and values, and you are able to hold people accountable to that,” says Mary.
2. Hire people who align with your company values.
Mary has seen organizations who celebrate their values by displaying them on walls within their office or facility. It’s a reminder to current employees of the values that matter to them and to their customers.
Some teams will collectively use sticky notes to describe and share the values that matter to them on a wall. Then they take the hundreds of sticky notes and filter them down to the company’s core values.
“This ‘value wall’ is not a quick process, but it's a very inclusive process,” explains Mary. Once you have a wall that displays your values, you can use it to show and attract individuals who align with these values and your culture. “You can also challenge all associates to hold each other accountable for living those values out each day,” says Mary.
3. Provide ample opportunities for input.
Support an environment where there is respect for your constantly evolving culture. High-performing organizations embrace opportunities to exchange ideas. Ensure that you gather input and feedback from employees. Lastly, look for development opportunities that align with the company’s strategic direction and employee’s aspirations.