Insights

The ROI of a Results-driven Culture

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We’ve all experienced culture initiatives that were meant to motivate and compel us to do things differently. Most of these initiatives, however, result in clichés, fading exuberance, reversion to old ways of working, and change fatigue. Investments in culture change efforts are rarely actual investments; they simply become costs, with value fading over time.

Why do some culture change initiatives fail?

Most culture change efforts focus solely on actions.  More meetings, new mantras, new processes, more emails, Hawaiian shirt Fridays, more PTO…in other words, actions.  While it may be intuitive to focus here, especially for leaders who are action-oriented, the real key to unlocking culture change comes from beliefs.  Beliefs drive actions, and actions impact your results.  

But beliefs don’t appear out of thin air.  Beliefs come from experiences.  Every day, experiences are either intentionally or unintentionally being created by leadership behavior, water cooler talk, incentive structures, feedback, news, etc.  Since we constantly seek to confirm our beliefs, the more these experiences happen, and the more our beliefs are confirmed.  Beliefs are either aligned with the mission, or they’re misaligned.  Once beliefs have set in, good or bad, they can be difficult to change – unless you have a process to change them.

Experiences→Beliefs→Actions→Results

Culture change happens through beliefs and experiences, but leaders tend to focus on actions. 

When you can shift beliefs to align with the results you want, you create an appreciating asset – a culture that yields growth, accountability, engagement and the ability to achieve the biggest of stretch goals. The value of your culture now increases over time, and is manifested in every aspect of the organization. We’ve seen this happen over our 30 years of working with clients from nearly every business sector.  

Consider: 

• A medical device company that went from not developing a single new product in the prior 3 years, to releasing 14 products in 14 months.  
• The largest producer of flat-rolled aluminum, after years of dismal financial performance, seeing their return on capital triple, profits increase by 26% and cash flow swell 471%, all within two years of changing their focus.
• A pharmaceutical company that was formerly content to increase costs at the rate of inflation, moved forward to reduce costs by 40% within three years…fundamentally changing the company.  

Another reason culture efforts tend to fade is because culture and strategy are kept separate. In other words, culture is something happening “over there” and is being managed by HR/Operations, while strategy is being devised “over here” by the CEO/CSO/CIO. Keeping the two separate is akin to a boat trying to sail with its anchor still in the water. It may eventually move, but it will be slow going and costly. 

Connecting culture to your strategy is critical. Using the gravity of your culture as a force to pull you towards your goals means you achieve results faster, more efficiently, and with greater impact. 

Three steps to activating culture

You can align culture to your strategy by focusing on three critical elements: shifting beliefs, instilling clarity, and fostering positive accountability. Here’s what this looks like:

  1.     Identify the BELIEFS and EXPERIENCES that are driving behavior that is incongruent with achieving your key goals.

•  Experiences form beliefs → beliefs drive actions → actions deliver a result (desired or undesired).
• What experiences are your people having, and what beliefs are those experiences forming?  Do those beliefs foster the actions you need to produce the results you’re seeking?
• Avoid the “action trap” – turning to new procedures, processes, sending new emails, creating new mantras, poster campaigns, etc… While it can feel intuitive to go there, it will not produce lasting behavioral change because it does not address beliefs.

2.     Create clarity by having only three to four KEY GOALS for next year.

• Clarity brings relief, focus and purpose
• Many companies we engage with have too many goals, and therefore there’s very little clarity around which goals are really the most important.  This creates confusion, drains energy, and causes silos to form.
• Be specific – if the goals are to improve EBITDA, reduce turnover, and complete your transformation project, etc. Ensure targeted results are memorable, meaningful, and measurable.   

Examples:  

• EBITDA improvement of 10%
• Turnover of less than 5%
• Complete transformation project by 3/1/2022

By having just 3 to 4 top goals and being specific about what they are, you bring clarity to everyone in the organization – from C-suite to front-line.  Now everyone is working to achieve a result (vs just doing a job)

Be sure everyone on the team or organization knows exactly what your top three to four key goals are.  If you asked a VP and an Account Manager, would you get the same answer?

3.     Foster positive ACCOUNTABILITY by demonstrating, highlighting, and rewarding accountable behavior.

• Accountability is often viewed as negative (who owns this problem?).  But it can be developed as a positive behavior that builds trust and bonds coworkers.
• In the example above, improving EBITDA, reducing turnover and improving employee engagement is EVERYONE’s job.  
• Instead of just “doing a job”, employees should feel that they are “achieving the result” every day and asking, “What else can I do?”

It’s important to resist the temptation to go straight to the “action layer” to solve culture challenges. Instead, work backwards. What experiences am I as a leader creating, and what beliefs are forming because of those experiences? Are those beliefs driving the actions we want in order to achieve the results we need? If not, what new experiences can I create to foster and confirm the beliefs I want my teams to hold?

 It’s also critical to ensure your culture and strategy are connected. Keeping them separate creates misalignment and competing priorities. When combined, you create clarity, alignment and accountability to the key results you need as a business by leveraging the full weight of your culture to move quickly towards your goals.

If we can help, or if you’d like to hear more about how Culture Partners provides a methodology and tools to shift your culture into a measurable, appreciating asset to achieve results, connect with us.