CULTURE – One of the secrets to high growth

September 3, 2021

How to create, maintain and defend your culture

Although you may not be able to verbalise your values, they determine how you behave, the jokes you laugh at, the party you vote for, and whether you call out others who behave in ways that are inconsistent with your values. Your culture is the result of the values and behaviour of all the people who work in your company, including you. If everyone shares the same values (high values fit), the culture will be strong, and employees are likely to be high performers. But a low values fit has a negative impact on culture and company performance will suffer,

In order to build a strong, high performing culture, you first need to identify and describe the kinds of values and behaviours you want. You then need to select people who not only have the functional skills to do the job but whose personal values match the company’s values. Doing so significantly increases the probability of being a high performing company. However, if you haven’t defined the values or behaviours, or if there is no attention to “values fit” during the hiring process, then your employees’ mishmash of values will create chaos and confusion, which will negatively impact company performance.

Dealing with a breakdown of culture

In April 2021, AMP appointed Alexis George its new group CEO. As Deputy CEO of ANZ Banking Group, she helped Shayne Elliott, ANZ CEO deliver a values-led transformation of the bank. ANZ’s reframed purpose is to shape a world where people and communities thrive. In addition to developing a set of values (ICARE: Integrity, Collaboration, Accountability, Respect and Excellence), it has clearly specified the elements of its culture, and developed a code of conduct for all employees

AMP had previously been riddled by problems with its culture. But as the AMP Chair, Debra Hazelton noted when announcing the appointment: “In Alexis George, we have a great leader and strong fit for the future of our company. On any measure, she has outstanding industry experience in wealth management and banking and is committed to continue the transformation of AMP’s business, and importantly, our organisation’s culture…”. Although Alexis George noted that she’d “…miss the people and the supportive and inclusive culture we’ve built together at ANZ…”, she now has the opportunity, as leader, to build a similar strong culture for AMP.

The AMP culture change is occurring from the top, but sometimes culture change occurs from within. When Taylor Walker, a high scoring player and former captain of the Adelaide Crows made a racist comment about another player, a Crows official reported it, and Walker was suspended for six games, fined, and required to go through culture training. He has since publicly apologised on television and again at a live press conference, but his future as a player is in doubt. It’s not that the Crows don’t have core values; in 2015, they announced their core values were courage, authenticity, high performance, and team first. But in 2019 the local newspaper reported the Crows had an issue with culture, and in 2020 several media personalities and players said the Crows’ culture was “broken”. After an external report recommended the Crows focus more on leadership and culture, the Crows hired a Leadership Development Manager. Even so, people were surprised that a Crows official would actually report that a star player with an illustrious career who’s been at the club for 14 years had made racists comments about another player.

The question isn’t “do you have a culture?”  Every company, every organisation has a culture.  The question is: “is your culture what you want it to be?”

The Mafia, ANZ, AMP, the Adelaide Crows, the Australian Army each has a culture built on its own set of values. As company leader, one of your responsibilities is to determine what values and behaviours you want to define your company and shape your culture.  Once you have defined them, then you need to make sure you select people who match those values, consciously build your culture and, when necessary, defend it. Here are some ways to do that:

  1. Determine your “values in practice” and make changes, as needed

To find out what your “values in practice” are, ask your employees, customers, vendors, and suppliers a set of questions around “what it’s like to work here” or “do business with” your company. Create a list of many different values and ask which ones they associate with your company, e.g., “innovative”, “traditional”, “team-oriented”, “independent”, “get the job done”, “work 9-5”, “product-focused”, “customer-focused,” and so forth. Once you have compared and contrasted the responses from these different stakeholders, take a step back and decide whether the “values in practice” are the ones you want to define your company. No doubt Alexis George is going through that process at AMP, and everyone associated with the Adelaide Football Club is considering what changes will be required to sync the behaviour of all club members with the club’s stated values. If the values in practice are in sync with the ones you want to define your company, then breathe a sigh of relief and give positive reinforcement when employees speak or act in ways that reflect your values. But if not, then you’ll need to define the values you do want, roll those out to the whole company, begin talking about them, praise those who are living the values, and call out the behaviour of those who aren’t.

  1. Build your culture

Once you’ve established your values, you need to actively reinforce those values. You need to be attuned, every day, to whether employee behaviour is consistent with the values and then reinforce those values by your response to what your employees say and do. This means you don’t hire people who don’t share the values and you notice and speak with those who behave in ways that are inconsistent with the company’s values. Ask questions during the interview that will shed light on the candidate’s values and behaviour. For example, if teamwork is one of your values, don’t ask if they are a good team player. Instead say: “Tell me about a time when you were part of a team that was not performing – or winning. It could be a school team, a business team or a sports team. What did you do or say to your teammates? To your teacher or the coach?” The candidate’s response will provide insights into their personal values, and you can then determine whether those values match yours. And remember when doing reference checks to ask questions around the candidate’s values to determine whether they are a good fit with your company values.

Be explicit about communicating company values to employees during orientations, during their performance reviews, when acknowledging high performance, when discussing lower than expected performance, in e-mail kudos, and in private “tune-up” conversations. Posting values on the walls or over the copy machine is not enough. Values need to be lived and reinforced, in different ways, every day.

  1. Be prepared to defend your culture

As the leader, you need to “walk the talk”. You and your executive team need to understand that you are responsible and accountable for the culture that is created.  Everyone is watching you, all the time.  There must be one set of values, and everyone in the company must abide by them. There is no special dispensation for you the owner, the CEO, or for the owner’s spouse or children. Requiring everyone to work, talk, and behave in accordance with the values eliminates any confusion among employees about what’s expected, allowed or not allowed, and avoids resentment if there’s “one rule for the rulers, and another rule for the rest”.

Maintaining the culture is not enough. There are times when you will need to defend it. I once worked with a company that paid a lot of money to recruit and relocate a very successful sales executive. The recruiters assured the CEO the new hire was a good fit with the company’s values. But during his first team meeting, the new executive commented, “That’s a dumb idea, but what do you expect from a woman?” The company’s CTO, Head of HR and Head of Risk, all accomplished female executives, were at the meeting, and the CEO said, “Why did you say that when we have three accomplished women sitting at this table and many more in our company? You need to apologise.” The new hire said he was just joking, but two weeks later he made another disparaging remark about women in executive roles. This time the CEO took him into his office, and said “We value all the women in this company. We’re putting you on three days of unpaid leave. Here is a list of counsellors and psychologists we’re making available for you to work with who may be able to help you understand why you’re making these kinds of comments. I really hope you figure this out, because we need you, but if this ever happens again, you’re fired.” The next time it happened, the CEO fired him on the spot.

Although the company had already invested in recruiting and relocation fees, had to pay severance, and really needed his sales skills, the CEO was not willing to further damage the company’s culture by keeping on an obvious bad fit. Defending his company’s culture had a positive outcome; two years later the company sold for US $1.6B on its way to going public.

In 2013, Lt. General David Morrison, Chief of Army for the Australian Defence Force said: “Every one of us is responsible for the culture and reputation of our army and the environment in which we work. If you become aware of any individual degrading another, then show moral courage and take a stand against it. No one has ever explained to me how the exploitation or degradation of others enhances capability or honours the traditions of the Australian Army”.

He went on to say: “I will be ruthless in ridding the army of people who cannot live up to its values. And I need every one of you to support me in achieving this.”

Business owners, CEOs, Managing Directors, and their executive team members, need to understand that culture is the central core of a high performing company. Hiring people who match your company’s values (and parting ways with those who don’t) has a bigger impact on the bottom line than you might think. People who share the same values get more done in less time. They enjoy working with each other – which leads to higher staff retention, more productivity, more innovation, more efficiency, and more profitability. In short, creating, building and defending your culture significantly increases the probability of high performance and growth – and that’s an outcome that every business owner wants!

Dr Jana Matthews, 3rd September, 2021, Companies Digest