The link between culture and performance
More and more organisations are realising that in today’s fast paced, consumer-focused, digital world, a strong company culture is critical to success. Yet few seem to know how to influence it.
Organisations that focus on culture create not only a positive work environment but are also setting themselves up for long-term financial success. In fact, “companies with highly aligned cultures and innovation strategies have 17% higher profit growth than companies with low degrees of alignment” (TLNT, 16 Jan 2016).
Despite this, some organisations appear committed to remaining in the dark ages thinking culture is solely an HR responsibility, whilst others seem to think it’s a mystical thing that you have little control over and just happens to you. This is simply not the case.
The definition of culture is “the ideas, customs, and social behaviour of a particular people or society”. In other words, it’s ‘the way things are done around here’. It’s the behaviours that people consistently show that stem from a set of beliefs and attitudes adopted by the business and it’s often led from the top. Let’s face it, every company has a culture, so if you’re going to end up with one anyway, the question is, will you choose to try and shape it or leave it to chance?
Here are three thoughts around building and maintaining a strong corporate culture that will give your business a competitive advantage:
Why does your business exist? Be clear about who you are
The quality and focus of our motivation to work influences our performance. How much we believe in what the business is doing and how connected we feel to that cause, in particular, affects our motivation and performance.
Anyone who’s seen the brilliant Simon Sinek TED talk ‘Start with Why’ will have heard him talk about the ‘golden circle’ – a simple but powerful model that explains how companies inspire action starting with the question ‘WHY?’.
WHY - does your business exist?
How - do you do business?
What - do you do?
He says that great companies such as Apple and Google think, act and communicate in exactly the same way which is totally opposite to the way most companies work. Inspired organisations, regardless of their size or industry, start with ‘WHY?’ and work from the inside of the circle out.
For example, starting with ‘WHY’, Apple says “Everything we do, we believe in challenging the status quo, we believe in doing things differently”. How Apple does it is by making products that are beautifully designed, simple to use and user friendly. What they do is make a range of consumer electronics products.
Apple has a clear and compelling purpose (‘WHY’) that everyone in the business knows about and talks about a lot. So there’s constant connection to what they’re doing and why they’re doing it.
The psychologist Edward Deci says that we fundamentally need to connect to a sense of purpose - individuals search for meaning, a sense of purpose and the feeling of making a contribution. This explains why having clarity of purpose (‘WHY’) as a business is really important.
Your culture should be an internal reflection of your brand and should highlight why you exist, and why you do business. The goal is then to get into business with people who believe what you believe.
Google’s ‘WHY’ or purpose is ‘to organise the world’s information and make it universally accessible and useful”.
Ikea say they exist “to create a better everyday life for the many people” Isn’t that far more inspiring than getting out of bed to sell low cost, flat pack, furniture?
Do you know why your business exists? I have no doubt you know what you do and probably how you go about doing it, but to begin defining and shaping your culture you really need to start by asking the question ‘why does the business exist?’.
2. Be clear about who you want to hire. Define what success looks like in line with your ‘WHY’ / culture, then recruit people who can deliver on that
An exceptional performer in one organisation won’t necessarily be an exceptional performer in another. For many years’ businesses thought they knew what great performance looked like at the selection stage – a university degree, 2:1 or above and some solid experience, but poor cultural fit has proven time and again to get in the way of that approach.
It’s now widely accepted that there is no link between academic success and future job performance, and in fact people who do well at university are no more likely to perform well in a role than anyone else. There are many high profile, inspirational business leaders who back this up - Steve Jobs and Richard Branson for example both left education to pursue other interests and look where they ended up!
So if the key factor needed to determine performance during the recruitment process isn’t education or intellect, what is it? For people to perform well you need the right person, in the right company, in the right role. If any one of those three items is misaligned, performance will suffer and one of the key factors that companies regularly ignore and get wrong is cultural fit.
We probably all recognise this from personal experience. Think back to when you’ve been interviewed for a new job. Sometimes you feel you just click with the company - from the moment you walk into reception it just feels right, then you go on to deliver some killer answers to questions and you perform to the best of your ability. Other times, you’ve being interviewed by another company for a very similar role that you’re completely qualified to do but something just doesn’t feel right, you struggle to make a connection with the interviewer and end up feeling like you performed badly in the interview. This is the effect of cultural fit and your performance in the interview is as much the responsibility of the organisation and interviewer as it is yours.
King.com (makers of Candy Crush) say they are “seriously playful”. They are world leaders in online gaming and want to hire people who are passionate about their games. They believe the best way to capture the attention of potential new recruits is to speak to them via a game. While searching for a King game, players stumble across one that tests their ability and mind-set. If they are successful it unlocks a job application. King couldn’t be more clear about their culture and the type of people they want to hire.
Thinking about why you exist as an organisation and the culture you’re creating, are you clear about who you need to hire to deliver that experience? Are you committed to hiring people who love your brand and will act as advocates for your business? How you define this during the recruitment process is key to ensuring you’re attracting and ultimately hiring those advocates.
3. Maintaining your culture takes hard work – ensure all your systems and processes are in line to drive exceptional performance
Once you’re clear about why you do what you do, and you’ve hired people who believe what you believe, you need to consider the on-going effect your culture has on motivation and performance.
External goals (such as money) will motivate us but not as much as when we do something because we want to. In other words, money will keep us interested for a while but for long term sustained motivation we need to do things because we love doing them. The link between motivation and performance is one of most studied areas of psychology and human performance and the psychologist, Edward Deci, describes motivation as being made up of three basic needs related to: confidence, control and connectedness. What this means is that we perform better when we do things that we’re good at, feel in control of, and things that connect us to others and the organisation’s sense of purpose (‘WHY’).
What structure and processes does your organisation have that will bring your purpose (‘WHY’) and culture to life? For example, the hugely innovative Virgin Group which has disrupted almost every market they’ve entered brings its culture to life by the wording behind reception at its head office “Screw it, let’s do it”. This immediately sets the tone for the business, encourages entrepreneurial behaviour and risk taking.
Clearly driving a high performance culture is not just about having visual cues around the office. Defining the values and behaviours expected in your culture will create meaning and purpose for everyone, and it will guide behaviour. Define what success looks like (collectively and individually) against those values and behaviours, and then communicate it rigorously and regularly through all means available to you. Line up all the tools and processes available to you - your vision, purpose, goals, behaviours, messages, rewards etc. – to ensure they encourage the culture you want. Then make sure you demonstrate that culture really matters to you. For example, by ensuring you reward performance and results that reflect and support the culture you want to sustain. Equally make sure you aren’t encouraging the wrong type of behaviour by rewarding performance and results that don’t reflect the culture you want to sustain.
Equally important is to take a look at your leaders. High performance cultures need leaders who role model behaviour. If you’re serious about it, it will show in everything that they do. Too many leaders don’t understand what that takes, or don’t prioritise it saying they are too busy, but everyone else in the business will only follow their lead.
Timpson’s the shoemakers have a very successful policy of hiring and training ex-offenders. John Timpson, Chairman says: “The most important way you can offer good customer service is very simply to trust your people and give them the freedom to get on and do it the way they think best. You can’t give individual service through a set of rules”.
This is a fantastic example of truly giving autonomy to employees. People will perform better when they have choice over how they do things, so consider these questions: does your organisational structure encourage people to question and challenge the status quo? How do you empower your employees to make decisions? Do you delegate and what do you delegate?
The link between culture and performance is undeniable. If you agree that culture matters, then you need to dedicate time to discussing, creating and shaping it. Whilst HR has a huge role to play, it can’t be their sole responsibility - it has to be a collective effort involving senior leaders, HR and all employees within the business.
