The Role of Leadership in Culture

Kat Cole: The first step is to understand its importance. You’ve heard the phrase that “culture eats strategy for lunch.” In the technology world, it’s evolved a little bit to “culture eats code.” If the culture is negative and unproductive
and unproductive, it’s like smog in the air. When it’s positive—it’s the sun, it’s rain, it’s fertilizer—it’s all the things that actually allow things to grow. When people look back on successes and failures, there’s always an enabling or a disabling culture.

If you truly believe it is foundational, then you can start breaking down what culture means. It’s often described most simply as the way people treat each other when the leaders aren’t in the room. The way you know something is embedded in culture is if almost anyone in the organization sees something that conflicts with the culture and they feel they can speak up and say, “We don’t do that here.” That’s when you know something is culturally believed.

Then the question is, what can I do to make the culture more positive, more optimal, to best serve the organization? There are three things within that step. One is that it’s got to be believed, professed and lived up to at the top. Second, there must be consequences and rewards when people either live outside of the boundaries of the culture or are living up to the culture. There must be an action that is sort of like bumpers in the bowling alley. You keep the ball from going in the gutter, and that slowly shapes culture over time.

If the culture is negative, it’s like smog. When it’s positive—it’s the sun, it’s rain, it’s fertilizer—it’s all the things that allow things to grow. Looking back on successes and failures, there’s always an enabling or a disabling culture.
—Kat Cole, COO and President, North America, Focus Brands

Third, it’s about not only allowing but encouraging the culture to evolve. Because as the business evolves, the dynamics and the environment and social needs evolve. It’s like a person, because humans need to grow and evolve. Hiring for “culture fit” tends to lead to homogeneous beliefs. Even though most people have a positive intent when they use that term, it can be harmful if people are overly focused on fit. Our puzzle pieces are changing and we need different puzzle pieces to be reflective of the changing environment in our employees.

Andrew Thompson: If you want to build a company that has a really strong culture, you have to have clarity about the vision, the mission and then the values. Vision is the potentially unobtainable goal. In our company, our vision is healthcare for everyone, everywhere. It’s a clear statement that you can’t necessarily achieve, but that you will strive for.

The mission is what you do every day to achieve your vision. We make medicines that communicate with a mobile phone, and that ties into the vision of the mobile phone enabling healthcare to be for everyone and to be everywhere. Underneath that, there’s a value statement—what we care about to enable us to deliver on our mission every day, which is in our case, quality, teamwork and leadership.

Robert Johnson: There has to be a commonality of interests—the objectives and reasons that people come together. It should not be static, but it should have some fundamental principles. It has to be rooted in integrity, it has to be rooted in accountability, it has to be rooted in respect for individuals you engage with. There has to be a purpose to any culture, and then the more consensus you have on purpose, the more comfortable the community will be with the culture.

Johnson: The company I built from scratch to be the most successful African American business in the country was Black Entertainment Television (BET). It was about proving to industry sectors that we, as an African American-owned and -controlled company, could compete in a capitalist system that was based on performance, not race or ethnicity. To do that, we had to have people who were committed to integrity and accountability, because if anything happened negatively in the way we managed our business, it would spill back over into our core objective.

One of our core values is that people will not get angry or lash out at somebody at work. That belief stems from existential challenges within the black community. The last thing we need is fighting on the inside. All that does is help those who have a negative view of us. African Americans used to talk about the “crab in the barrel” mentality. The theory was that if one crab tried to climb out of the barrel, another crab would reach up, grab him and pull him down. If black folks fight among themselves, the winner is the opposition community that doesn’t believe you have the potential to succeed.

So to me, anger has no place in a company that is trying to succeed against all odds. There’s always been the theory in the black community that you have to be “better than” to be considered “as good as.” You cannot afford mistakes. A white-owned startup company can make a mistake and recover. If you’re an African-American company, there is no margin for error. Anger or fighting inside a company only creates a weakness that would hurt our ability to be successful.

Cole: They have to be the highest-order beliefs that can apply no matter the level, no matter the newness of the employee, no matter the business or the position. That would then suggest that it shouldn’t be a long list. If you have a long list, then it’s harder for companies to apply across different jobs or situations or countries or markets or products or levels of leadership. So the values must be of such high order, which by definition means they are short in quantity, that everyone can live up to them. There are some things that you can argue are universal, such as who comes first in your organization–employees, customers, investors. Those are deeply held values and beliefs that, once you set them, should be shared by everyone in the organization. People also are more likely to call things out when they are wrong as opposed to notice all the things that are right, so catching violations of the values are more likely to be self-policed.

Thompson: I look for people who can think and do, and that is an important difference between a small company and a large company. In many larger companies, there are people who think and there are people who do. Being able to do both is a very important skill set, and one that is not very common.

The second thing is that creativity and creation are very difficult. It’s much easier to critique others’ work than it is to create. The trick is to make something exist and then allow everybody else to make it better, and when they’ve done that, let them take the credit. The last piece is persistence. The absolute key to success in any innovation process is showing up and doing it again and again and again.

What employees want is a sense of purpose and mission. That is a crucial component of how you build a workforce. They want to love what they’re doing. 
—Andrew Thompson, CEO of Proteus Digital Health

Johnson: I grew up in a small town of Freeport, Ill. It was a segregated town, and about a tenth of the 30,000 people who lived in Freeport were black. When you say you’re going downtown to do some shopping, your parents would say that you better dress up, because you wanted to be perceived by the white store owners and clerks as somebody that they deemed acceptable, so that they did not see you as a threat. That lesson created the belief that you would have to understand how to walk a certain line.

When you translate that into business, it comes back to the point that, as a company, you can’t tolerate that much movement away from that line. You can have some flexibility with your employees but, just as with religion, it can’t be to the point where it threatens the whole cultural meaning of why you exist. If people behave in contrast to the values, it makes people cynical, and that threatens the existence of the enterprise.

Thompson: The nature of the workforce is changing. If you go back in time, and think of my grandparent’s generation, they were mainly driven by fear. So if they had a job, they felt lucky. If somebody said jump, they said how high? Then my parents grew up in the post-war era when people had a greater sense of security, and they were motivated to buy things and enjoy a middle-class life. For companies, the motivational tools were mainly around money.

In the current era, a lot of the younger employees come from homes or a place or space where they have plenty of stuff, and they’re not afraid. They’re no longer motivated by the idea you can make loads of money and you can have a bigger car. What they want is a sense of purpose and mission. That is a crucial component of how you build a workforce today. They want to love what they’re doing.

Cole: I’ll start with the basics. HR shouldn’t be part of the cultural problem. Most people don’t call that out. I’ve seen some HR leaders who are part of the problem. They aren’t as open or willing to evolve with the changing times. They should be helping leadership’s ability to lead from the top and lead the culture. They should be enabling the organization to evolve the culture. They should be continually promoting how important certain behaviors are in the organization.

Second is creating frameworks and structures that allow the culture to thrive, and constantly evaluating and reflecting on certain things that have a predictable tendency to unintentionally negatively affect culture, like compensation plans. People will do things that are aligned with their compensation plan, and sometimes that unintentionally causes decisions that actually violate the culture because people are having to choose their bonus over cultural norms and what you say you want to stand for. A lot of HR teams, because they’re so busy and so focused on policy, sometimes fail to pause to ask whether there is anything that is systematically and unintentionally creating friction in the culture.

The third part is intentionally creating culturally seeded moments. If you want to have a giving culture, then you should have company-sponsored giving events throughout the year. You’ve got to live it. You can’t just tell people to do it or give them a playbook or a handbook. The company should lead by example. If part of your values statement and your cultural goals are to be obsessed with the customer, then everyone in your company should go work in a job that is directly connected to the customer once a year or more.

Thompson: I want HR to ensure that employees have the tools they need to embrace and express the culture of the enterprise, and at the same time, to influence and shape it. For example, as our company has become bigger, we’ve become more diverse and there have been some not atypical stresses and strains around diversity, and there’s been a push toward less conversation about diversity and more conversation about inclusion.

Diversity itself isn’t an asset if you have 10 very different people who don’t talk to each other and don’t understand each other and don’t work well together. If you have 10 very different people who come from different perspectives, who talk to each other, appreciate each other, learn from each other and gain perspective, then that’s great, and that’s inclusiveness. How do you work on inclusivity? That becomes a journey, and that’s where Chief People Officers can really help, because they can provide you with tools.

One of the things I’m really happy about is that if I went back a few years, there were people telling me, “You can’t do Christmas, because that’s a Christian holiday.” But now we help facilitate the celebration of a lot of holidays, including Diwali and Hispanic Heritage Month. It’s about people sharing their culture.

Johnson: My message to them would be that you won’t have an organization that can be effective unless you have a consensus of what the core values are and what the purpose is. It has to be a shared consensus and a common belief that it is applied across the entire company in a fair and consistent way.

Johnson: If you’ve got 200,000 people spread across the globe, I can understand how difficult it can be to apply somewhat amorphous concepts of values across different cultures and geographies. But that’s your challenge. That’s why you were hired. The first thing you can do is to pull together the leaders of the company at your level to try to refine and define the values that have been handed down from corporate. Build a consensus and make sure that everyone clearly understands the values and that they’re communicated effectively and applied consistently.

Culture and values have to have elasticity, particularly in a global environment and a changing workforce. Otherwise, your business is going to deteriorate.
—Robert Johnson, founder and chairman of RLJ Companies

The goal is that even if there’s some small deviation based on geography, ethnicity or identity, you’re not outside of a broad definition of what the culture means for 200,000 people. You’re not going to get 100 percent unanimity in values. But it is management’s responsibility to try to narrow the definition of values as much as they can to make the company work in a uniform way. Culture and values have to have some elasticity to them, particularly in a global environment and a constantly changing cultural workforce. Otherwise, your business is going to deteriorate if not collapse.

It’s become more difficult every day to draw the line on where flexibility moves into heresy. That’s a difficult thing to do, but millennials are different from Generation X, and Gen X is different from baby boomers. But as the HR executive, you have to find the way to sort of bring the thread of commonality into a mosaic that works as a commonality of purpose. That is the challenge of the 21st century HR executive.