As the legendary consultant Peter Drucker once said, “Culture eats strategy for business.” This implies that effective leaders will make their business cultures explicit. There's just one problem. The idea of a business culture can be notoriously ambiguous.
Indeed, business culture is a topic that some people may prefer stays ambiguous because this lack of clarity works for them. It leaves room to renegotiate topics like product and service quality, fair compensation, access to resources and exposure to downside risks.
This article describes a framework and practical steps for leaders and teams to get a handle on slippery business culture conversations. These steps include:
- Clarifying how current cornerstone values impact your business’s culture and performance.
- Understanding why the value of personal accountability is the business culture cornerstone that experienced change leaders choose above all others.
- Choosing "accountability" as the future cornerstone for your culture and reinforcing this choice with recognition and rewards.
Benefits of applying these steps can include:
- Leaders leading more and managing less, which will reduce complexity.
- Accelerating innovation and leadership development.
- Upgrading strategic thinking and focus.
How Do Business Cultures Work?
The place to begin is to understand how culture impacts business performance. Here is the logic:
A business culture is a values-system that distinguishes how people in a company learn and adapt together. It is transmitted from the mindset and behaviors of top leaders.
Cornerstone values are the key values in this system. They include those few values that supersede all others and are recognized and rewarded.
Culture is important to business performance because it limits the types of businesses leaders and teams are willing and able to engage in. Culture fundamentally both creates and limits future business possibilities.
For businesses to change, culture must be adaptable. And culture change happens only when leaders at the top shift their leadership styles. The big implication here - businesses can never sustain performance at a level higher than the capacity of top leaders to drive transformational change.
A Warning To You, The Reader
I'll share two examples of cornerstone values, one for a company where “accountability” is not the cornerstone value and one where “accountability” is the cornerstone value.
As you read the first of these two examples, don't be surprised if you find yourself thinking thoughts like, “this example seems to imply that values like 'compassion,' 'loyalty' and 'social harmony' are bad but how can that be?”
Read on. It will be explained.
Identifying Cornerstone Values With Two Questions
It is possible to deduce the cornerstone values for a business culture with two questions to top leaders:
1. What about your business’s culture makes you most proud?
2. What do you wish people would do differently?
A Company Where The “Accountability” Is Not The Cornerstone Value
Imagine getting the following responses from a top leader to the two questions above:
“The values in our business culture that make me most proud include:
- People like and care about each other.
- Disagreements and complaints are rare.
- And people get their work done.
There are some things however, I wish people would do differently:
- I wish they would think more strategically, focusing on the big picture.
- I wish they would be more innovative and open to new ways of doing things.”
What do these responses imply?
They imply that this is a business culture where “social harmony” and “life balance” are cornerstone values. These values are more important than other values including “innovation,” “learning,” “personal development,” “telling the truth” or “business returns."
In this culture, conflicts that make people uncomfortable are likely to go unresolved. What people call strategies are likely to be high-level plans missing sharp definitions of what - and who - is inside and outside of the box.
Were you to ask the top leader about their own personal values, you would likely hear terms like “loyalty to friends,” “work-family balance” and “compassion for others.”
Were you to ask team members to describe the top leader, you would likely hear terms like “nice,” “a little conflict-averse,” and “trustworthy.”
This means that this is a company where the people are likely to tolerate mediocre business performance as long as they are personally comfortable and like each other.
A Company Where “Accountability” Is The Cornerstone Value
Now imagine getting different responses from a top leader to the questions above:
“The values in our business culture that make me most proud include:
In our organization people are constantly challenging each other, including me, the boss. Every employee seems to have a strong opinion for what we should change to succeed. And we are always trying out new ways of doing things.
People watch out for each other and for the team. However, our culture does have an edge:
- Tolerance in general is low for anyone who is not seen as serious or who doesn’t put his or her heart into it.
- A player who negatively impacts others will get an earful of feedback from all sides.
- We expect everyone to manage their own energy level and personal experience and to stay positive and engaged.”
“There are some things however, I sometimes wish people would do differently but I am often conflicted:
Things typically move so fast around here that our operations can feel a little chaotic. On one hand, I wish we would take more time to plan and communicate. On the other hand, I wish we had fewer meetings and few plans.
I guess it boils down to that in this culture we all sometimes feel pushed to pay attention and respond beyond our personal capabilities. This can and does push us outside of our comfort zones. Sometimes this makes me feel grumpy. But then again, I also wouldn't want the opposite kind of business culture."
What do these responses imply?
They imply this is a business culture where personal accountability is the cornerstone value. Everyone is expected to operate from an expanded sense of personal accountability. As a result, they are expected to constantly recalibrate their mindsets, strategies and actions in a shifting landscape for the good of the whole, which is why the top leader sometimes feels conflicted.
Probe a little deeper and you will discover in this organization that practicing "accountability" is indeed more important than other values including the “perception of fairness,” “promises of stability,” “the certainty of the status quo,” “protecting people’s feelings” and "individual comfort."
In this kind of culture, the top leader’s own personal values likely include “serving greater causes for the good for the whole,” “constantly learning and self-improving,” "not always seeking perfection" and “authentically connecting with other people.”
Feedback about the styles of the top leaders will likely include statements like “hard but fair,” “driven but present,” “challenging but also inspiring” and "trustworthy."
Why Is “Accountability” The One Value Above All Others That Change Leaders Seek To Instill As The Cornerstone Value In Business Cultures?
Different kinds of business cultures will have different cornerstone values. For example, pure meritocracies, egalitarian cultures and action-oriented cultures are each built on very different cornerstones. And these cornerstone values impact the kinds of change people are willing and able to engage in.
The first example above describes the kinds of loyalty and compassion-centric cultures that are typical among mid-sized companies with average or below average performance. These are the kinds of companies that are imploding everywhere due to global competition. They often suffer overhead like their bigger brethren but without the financial safety nets, making their risk tolerance for mismanaged change low.
The second example described a business culture of accountability, which is the kind of business culture required to win in a rapidly changing, complex global business environment. This is a business culture in which everyone is "awake, responsive and perhaps a little on edge."
But aren’t the kinds of cornerstone values in the first example, like compassion and loyalty, noble? Yes, but that is not the question. The salient question is: should they be the cornerstone values, placed above all others when decisions around rewards and recognition are made? From a change leadership perspective, values that place individual feelings above the needs of the whole will undermine the willingness and ability of people to change and adapt. So the answer is no.
What sets the value of personal accountability apart as a cornerstone is it places the good of the whole above personal power and comfort. The diagram on the right shows expanding levels of personal accountability: from self, to role, to customer experience, to team, to business, to organization.
A fundamental belief in a culture of accountability is that “compassion” should be reserved for those situations where people are impacted by circumstances beyond their ability to influence and improve. In a culture of accountability “appropriately showing empathy with how others are feeling” is recognized as different from “inappropriately solving problems for someone else out of a sense of compassion, which they could have solved themselves were they operating out of a sense of accountability.”
In a culture of accountability, people don't want to rescue each other. They want to develop each other to become stronger leaders.
These distinctions have a profound impact on how people use their power to dominate or their weakness to manipulate, how they embrace or evade responsibility, and how they learn, innovate and adapt.
What Can You And Your Team Do With These Insights?
You might choose an easy option: to decide that these ideas are too philosophical and instead go for the more straight-forward tactic of pushing harder for results. This tactic will probably work for a while but it is unlikely that anything significant will change. And then when something inevitably blows up, your business might not have the culture of accountability required for people to engage in cleaning up the mess and innovating a better way forward.
Or you might choose a better option, which would be to invest a little time and implement three steps with your top team:
- Clarify with your team how your current cornerstone values impact your business’s culture and performance.
- Explore together why personal accountability is the business culture cornerstone value that experienced change leaders choose above all other values.
- Choose "accountability" as the future cornerstone value for you business culture, reinforcing this choice with recognition and rewards.
If you would like to discuss how to apply these ideas to build a culture of accountability in your organization, send us an email.