Written by Tim Taylor & Leon Forte-Doddrell
“The truth is that culture – on its own – is not the thing that will bring you success in whatever way you may define it for yourself and your team,” Adii Pienaar, founder of Conversio, says.
“Building a successful business requires many different things to work well. Culture is, however, the pulse that influences every one of those things.”
There is no doubt that culture should be at the top of every leader’s agenda for many reasons, the least of which is making people happy!
The reasons why culture is a significant financial consideration
Culture is a billion-dollar decision. In recent history, we have witnessed billions made and lost based on reputation driven by the cultural norms expressed by senior leaders and observed by outsiders.
Culture was cited as the reason for the billion-dollar valuation of WeWork and it was also one of the reasons behind the erosion of the company’s value.
It was set to be one of the highest-profile initial public offerings (IPOs) of 2019. But a number of red flags and investor concerns revealed a cavalcade of problems that ultimately derailed the WeWork IPO. And after that derailment, a once-hotly anticipated start-up now finds its reputation hanging by a thread.
Adam Neumann, whose severely unorthodox management of WeWork has drawn much criticism, both inside and outside the company. As more has been revealed about Neumann’s bizarre and often unethical business practices, the more justification it seems investors have had for registering such little interest in the run-up to the IPO. Among the many major concerns was the selling of the “We” trademark to Neumann’s own business for $5.9 million, involving unqualified family members in the business, smoking marijuana at work and convincing others to do so, and engaging in allegedly sexist behaviour whilst in charge.
Samantha Barnes, International Banker
Neumann’s early days alongside co-founder Miguel McKelvey were impressive, positioning the business as an “eco-friendly co-working space” tapped into the zeitgeist of millennials seeking to build a more sustainable world. From one office in New York, they grew to over 500 locations in 29 countries with more than half a million members, their new term for tenants. They captured the imagination of many with their play on “We” launching WeGrow, WeLive firmly established their position as innovators.
However, hyperbole got the better of Neumann, and there were no guard rails to keep him from sabotaging himself and his beautiful creation. Arguably if the leadership team, including Neumann, had focused on publishing their personal core values and used this process to hold each other accountable, they would have established a sustainable leadership culture that would have averted lawsuits and the deviation from maximising shareholder value.
There are too many examples of where leaders have thought that living the values espoused by their companies was beneath them, causing massive reputational damage:
- Uber
- Tinder
Reputational Damage can decimate a company and take value away from the shareholders, look at the $120b-reduction in valuation for Facebook in 2018, or Uber $20m in settlements, or the loss of a significant and talented leader at Tinder that created a new $4bn competitor – Bumble.
Why time is the primary factor to consider
Time is important for three reasons:
Making time requires a paradigm shift. Many senior executives are trapped in the paradigm that working on culture is not the same as working on operational priorities or strategic initiatives. Take a look at google, they are commonly ranked number 1 for company culture. However, their senior management didn’t live up to the cultural expectations of the company and their misconduct led to a reputation nightmare and massive workforce walkout in 2017; protesting the behaviour of the senior team.
Sundar Pichai the new CEO was placed under an avoidable amount of pressure to make things right in the wake of his predecessors. Sundar and his senior team now recognise that working on a sustainable culture is as important as any operation or other strategic priority – they know now that Cultural change must start and be maintained from the top.
Time indicates importance
If you want to establish a positive culture and engage in cultural development, you must first be willing to make it visible that culture is important to you. Research shows that investing time and energy into a topic or action is a key indicator to others that the topic or action is important. As a leader, you set the standards for the people you lead. You are the person people look to when comparing their actions and evaluating what is important.
Therefore it follows that when you make time for culture others will recognise it is important to do the same. Essentially be the change you want to see and others will follow.
Remember Eisenhower’s important/urgent theory, this is a useful model to help coach your people to prioritise culture alongside other strategic and operational issues.
Time to learn
All leaders must embrace the fact that learning takes time and repetition. Research has proven that long-term memory is only generated and maintained when the importance of the memory is demonstrated. The spaced learning model utilities this repetition effect over time to make memories stick and habits develop.
This knowledge helps leaders to consider new strategies to establish long term behavioural change and not make the mistake of hauling everyone off to a 3-day retreat on culture and values followed by PowerPoint decks and no meaningful changes or follow-up. It is better to establish a little and often approach to cultural change. The key strategy is constant development, not one that happens for one intense session and is then forgotten about.
Recommendations
- It’s not for everyone -Just as your products are not for everyone -neither should your company culture be!
- Establish your company culture through leadership practices
- Recruit people who best fit your culture – Lose those who don’t
- Reward and promote exemplars
- Don’t cut corners
- Don’t declare victory too early
Do explore Brilliant Buttons it offers a great solution for those looking to build a sustainable winning culture.
