Are you deliberate about shaping the culture of your business? Or does it evolve around you with very little thought? This matters because your culture is your execution system. It’s the thing that will most strongly influence whether your strategy succeeds or fails.
Culture forms whether we like it or not. Wherever you get a group of people, behaviours and patterns will become entrenched. Changing these once they’ve set in is dead hard. I’ve battled with this in the past and it’s exhausting. As the new MD of IT Lab, I realised we had a matter of months to save the company. It was just after the financial crash and we were haemorrhaging cash. The culture needed radical change. We got there, but it was tough.
A story comes to mind about Lloyds Bank in Sheffield. One of their branches was doing well, the other badly. So they took the Manager of the best and moved him to the worst. Nothing happened. He made no progress. It was only when they transferred a third of his staff to the worst-performing branch that he reached a tipping point. Then he could make an impact and the culture started to improve.
For many fast-growing businesses, culture is neglected. There’s a point where they realise that unhelpful, bureaucratic ways of working have become normal. Meetings are badly organised and always overrun. People have little respect for each other’s time. The washing up is piled high in the sink. They wish they’d done something sooner, before the rot set in. This is why it’s better to take a deliberate approach now and start practising. And keep on practising until things get better.
Get to grips with existing culture
Have you ever been a customer of your company? Or worked on the front-line? Are you aware of any friction or pain your customers and staff might be experiencing? An old colleague of mine from my Meditel days got in touch recently. As we caught up, he told me how he’d turned around the fortunes of a poor performing depot at British Gas.
Before taking his role as Depot Manager, he’d decided to ‘mystery shop’ the experience of a new engineer. The aim was to see what was going on behind the scenes – how he was treated by the other engineers, the process of job allocation, quality control etc. It told him everything he needed to know about why the depot was under-performing. Some of the things he uncovered were horrific. Forewarned is forearmed. He knew exactly where to focus when he took over as the new manager.
Before you plan and start practising, you need to know what you’re dealing with. Look at the norms and unwritten rules that exist in your culture. In his book, ‘Organisational Culture and Leadership’, Edgar Schein compared culture to an iceberg. Above the water were the tangible elements such as the stories, structures, documented processes and artefacts. Below the water was a much bigger mass of invisible assumptions, unconscious beliefs and ways of thinking. These are the things you need to uncover and understand.
In the past, I’ve made this a collective effort. Wherever I’ve been MD, I’ve asked people to give me full and frank feedback. They’ve been encouraged to point out things that are getting in the way of our company having a high performing culture. I’ve set up email addresses (stupidrules@) and formed steering committees to work on this. You need to get to the root of why these things are happening and stop their proliferation.
Because culture originates in teams, it works better to focus here first. It’s impossible to change it top down. Get to grips with the culture in your teams and influence at this level. A great tool for this is the Gallup Q12. It will tell you everything you need to know about the situation in your company, at individual, team level. I remember one Chief Exec I worked for refusing to believe that the data was true. It had revealed that one of his managers was underperforming – badly. He rated this guy. Nine months of abject failure later, he was forced to accept it.
Have a plan and start practising
Let’s say you already know your BHAG and 3HAG. You’re clear on your direction of travel and have a clear strategy. It’s time to ask yourself, do you have the purpose, values and behaviours in place to make this a reality? If not, you need a plan to get to this point. And you need to practice.
There is no professional sports team in the world that goes to a match without practising together. This is why I think the current trend towards remote working due to the COVID crisis is misguided. Man United wouldn’t practice separately in their gardens and then get together on match day to play. Teams need to be in the same physical space to improve their skills.
It takes me back to the best rugby coach I’ve ever had. He’d coached the England under 21s and came up with a game plan to play to our team’s collective strengths. We’d turn up at a match with a rock-solid blueprint for success. Our opponents didn’t. They relied on the individual brilliance of a couple of players. The result? Our team was promoted two seasons in a row. Similarly, most businesses tend to have a couple of good people and rely too heavily on them when the going gets tough. But if you can get everyone practising together, you’ll find your business starts humming like a well-oiled machine.
Make sure you prioritise practice amongst your teams. We took this very seriously at Rackspace. The then CEO, Lanham Napier, told me he wanted the whole leadership team to book their holidays at the same time. I looked at him incredulously. Really? Who was going to be in charge when we weren’t there? But he said, ‘If you do this, you get more time together as a team.’ He was right. Our collective commitment to one another was a big reason for our stratospheric growth. I’ve taken this approach ever since. It helps retain precious momentum.
Practice seeking criticism
I believe powerful cultures evolve from actively seeking criticism. This is fundamental. It’s so important to know when things aren’t right and try to fix them. To do this well, you need psychological safety. People need to feel able to speak up when they’re unhappy.
Look at the retrospectives around the Space Shuttle disaster. They discovered that managers knew about catastrophic flaws in the O-rings at low temperatures well before the accident. And yet this vital information didn’t get through to the people making the decisions. The managers didn’t want to be the bearers of bad news.
Consider using pre-mortems to get everyone into the habit of speaking up. These encourage staff to articulate possible issues before they happen. They’re incredibly effective. People are forced to get creative with their criticism and this becomes an accepted part of planning. If this is common practice, there’s no fear of looking like the only negative person in the room. You’ll get a full, 360-degree view of the problem that can be incredibly valuable.
The right people in the right seats
If scaling a business is about People, Strategy, Execution and Cash, my focus is on the first two. Why? Well, I believe once you’ve got the right people on your bus – the ‘A-Players’ – they’ll take care of the execution without you. And the cash will be guaranteed. As I’ve said so many times before, you need to work hard at creating a culture that attracts and retains ‘A-Players’. Nothing will make more of a difference to your company’s growth than this.
Most of my clients are in a hurry to expand. Typically, they want to double their business in three years. Some want to move even faster. So not only do they need the right people. These people need to be in the right seats. They don’t have time to wait for someone to come up to speed. If I think back to times where my company failed to move quickly, it was because of this. It’s all well and good to say you’re going to promote from within. But often, the people in the critical roles need to have done something similar before.
This is where the job scorecard can help. It allows you to identify the three to five KPIs in a role that are critical to success. Once you know this, you can find someone that’s guaranteed to do these well. And this might mean looking outside your organisation.
I was with a new client in Spain last week – a recent start-up. Every member of their leadership team has been there and done it before. The team has come together for this new adventure. With everyone in position, raring to go, they were ready for fast growth.
Get your flywheel spinning
Culture is a flywheel and you need to get it spinning on its own. This takes time, effort and practice. Ensure your leadership team has some time off-site together to do this. I suggest at least two days a quarter to my clients. When we first start working together, I’ll ask them what they normally do for planning. Often, they tell me they only go off-site one or two days a year max. And this is to agree a financial plan. No detail! It’s basically the Finance team presenting an Excel spreadsheet with guesswork around future revenue. There’s never any plan about how they’re going to get there.
Put in place a series of things to build momentum. Daily huddles, weekly 1:1s, level 10 management meetings, monthly All-Hands, quarterly strategy meetings – all of these will keep your cultural flywheel spinning. Bring your teams together regularly to practice at working smarter.
Here’s a great technique – ‘swarming’. I first learned about this from a guest on my Melting Pot podcast, Dennis Hahn. When you gather your teams for a pre-mortem, avoid opening up a general brainstorm as it’s likely to be dominated by the extroverts in the room. Instead, group people in twos to share their thoughts before bringing the twos together into fours and then gathering these into eights. This way, you find the nuggets of gold. Instead of thinking, ‘Why am I the only person in the room that thinks this? I’ll keep my mouth shut’, you’ll find people open up more readily. You’ll capture everything and have the benefit of more diverse opinions.
Practice makes perfect. Remember this. You can influence the culture of your business but it’s going to take focus and hard graft. But the rewards of increased productivity and growth will be worth it.