80% Of Companies Don't Care About Company Culture—Do You?

Design Executive Officers certainly do. And the authors of the new book, Rise of the DEO: Leadership by Design, believe they're the future of business.

Some believe company culture can be mandated from the top down. Some believe it emerges on its own from the bottom up. A Design Executive Officer, or DEO, sidesteps this debate. He knows it must be built—iteratively, collaboratively, and over time—from the inside out.

Culture is the unique collection of beliefs and practices that communicates a company’s values, whether or not they’ve been formalized or articulated. A well-designed culture unites stakeholders in a shared understanding of "the right thing to do." It becomes the unseen but firmly rooted infrastructure that coaches new hires and comforts old-timers. It’s the force that attracts like-minded talent and repels those with different attitudes or behaviors. A positive company culture can boost growth, while a negative or mediocre one can speed failure.

A DEO recognizes the power of company culture, but that’s not the primary reason he embraces and builds it. For a DEO, crafting an effective, authentic, and meaningful company culture is neither a choice nor a checklist item. It’s a straightforward reflection of who he is and why he wants to lead. A strong company culture reflects the DEO’s own beliefs and behavior.

Company culture is highly subjective in its origin and evolutionary development; no template exists. In fact, copied or commanded culture is inherently dysfunctional. A culture must emerge from and accurately embody a company’s people and processes. There is, however, a progression that DEOs initiate.

Purpose

Ask a DEO to build her ideal company culture, and she’ll almost always start with its purpose. She’ll want to make it clear not only what the company does, but also what higher commitment it serves. If this purpose is captured in a mission statement it won’t be a bland functional promise like "Lead in customer satisfaction, product quality, and employee happiness," but rather a more daring, sincere, and consequential statement like that from shoe and eyewear maker, Toms:

With every product you purchase, Toms will help a person in need. One for One.

This mission doesn’t spell out exactly how the company’s culture operates, but it provides distinct guidance and a clear ethic for making decisions. It’s scaffolding on which the company can layer operations, marketing, sales, or financial directives. It’s source code that can be carefully edited as the company grows and changes.

Pace and Drive

In shaping company culture, a DEO strives to support creativity and curiosity. He wants a philosophy that encourages collaboration and rewards useful risk-taking, not as attributes of selected people or departments but as characteristics of the entire company. He knows these attributes need to be baked into the culture from the top down and from the bottom up. He knows these attributes thrive in an environment that feels open, approachable, transparent, and genuine.

A DEO can’t completely control every detail of a healthy company culture, but he’ll set the company in motion, determining whether development is "fast and furious" or "slow and steady." He’ll bolster admired activities and work to eliminate undesired ones. He’ll model how he expects others to deal with deadlines, stress, and setbacks.

People

As a company grows and matures, its culture becomes more independent and more shared. Defining characteristics of collaborators and partners may be spelled out explicitly, but they are confirmed and elaborated through the company’s actions. The company’s "ideal" employee takes shape through daily interactions and becomes more recognized as an important component of the culture. As Ayah Bdeir, founder of littleBits explains:

We’re a culture of people driven by a passion for our mission and for what we do. Because we’re driven by our passion to help others be creative, we accept that a solution can come from anyone—it can come from me or an intern or from user feedback. It doesn’t matter. We only care about finding the best solution to the problem.

Of course, some behaviors or qualities that are valued initially lose favor over time. A startup can honestly say, "We will share all job responsibilities." A company of 10,000 employees cannot. On the other hand, some people-centered practices that seem unusual at first can become increasingly important over time. Companies that promoted work-life balance used to be considered naive or New Age, but in this "always on" era, work and home life blend. This once-ridiculed consideration now enjoys much wider acceptance.

Ambiance

A DEO will obsess over the physical environment and office ambiance because she sees them as proxies for cultural values. She knows that the office space influences everyone’s mood and mindset on a daily basis. She knows that the lobby makes a first impression on visitors and that conference rooms communicate the company’s attitude toward collaboration. She knows that the company’s brand isn’t limited to its logo, website, or packaging; it can be communicated in the office layout, in the whiteboard pen colors, in the noise level.

Because of this, a DEO may spend months searching for the right office space. She may fret over the food or restroom supplies. She may lie awake rethinking the company email signature—not to get it perfect, but to ensure that it accurately communicates the company’s core attributes.

Evolution

As the culture becomes ingrained and widely embraced, the truckload of details that shapes it will no longer need a DEO’s constant oversight. An employee handbook may document the ideals, but the culture is reinforced without a rulebook. Over time, stakeholders can sense if something is out of sync with the company’s norms. They’ll point out discrepancies and add complementary elements. They’ll become the keepers of the culture.

Strong company cultures evolve and change over time. DEOs know that a company culture can’t stay fixed, but instead must respond to external changes as well as internal pressures. Each crisis, each opportunity is a chance to examine the company culture. Perhaps it can provide immediate and clear guidance. Perhaps it fuels heated debates. Perhaps it is silent. If it’s been thoughtfully articulated and widely shared, the corporate culture finds a seat at every meeting.

Excerpted with permission from Rise of the DEO: Leadership by Design.

Maria Giudice has pursued a vision of intelligent, elegant, people-centered design throughout her professional life. Hot Studio, the experience design firm she founded in 1997, grew into a full service creative agency with offices in San Francisco and New York City. The firm was acquired by Facebook in 2013, where Maria now works as Director of Product Design.

Christopher Ireland was co-founder and CEO of Cheskin, a firm that pioneered design research in Silicon Valley. Beginning in the 1990s, she led teams exploring broad questions like how trends move through the teen population, how music relates to mood, the power of play, and the development of trust online. She and her partners sold Cheskin to WPP in 2007, and walked away with their sanity mostly intact.

[Image: Flickr user Tamaki Sono]

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19 Comments

  • Paul Browning

    What many CEOs/DEOs or leaders fail to realise is the profound impact they have on organisational culture or climate. Daniel Goleman (2000) professes that leadership styles account for 70% of organizational climate or culture, which in turn leads to a 30% impact on organizational performance. Key to any positive culture, be it a culture of innovation or creativity, is the cultivation and maintenance of leadership trust http://bit.ly/1bLhgPH .

  • deandeguara

    The best post I read in the last few weeks! Never heard the concept of the DEO...love it!

  • drmeaningful

    DEO or CEO? Does it matter? No. What matters is that employees feel they are doing work that matters to themselves, to their customers, to the company, and to society. They want an empathetic culture that respects and recognizes their needs, values, interests and ambitions. They want a purpose-driven culture that helps them create new meaning through their daily work experience. All this depends on a culture that supports, enables and rewards employees. And that depends on the policies, processes, procedures of the organization as well as the intent, attitudes and behavior of the leadership. Here's an article that shows how DEOs, CEOs or WhateverO's can create a more meaningful workplace culture: http://www.emotivebrand.com/th...

  • Debbie Ruston

    I agree the DEO is the future of business. Developing a culture of like minded people that match the vision of the companies founder is necessary for engagement, job satisfaction, growth and profitability. The definition of a DEO reveals the authenticity of who they are and why they are doing what they do. Authenticity is something people gravitate to and want to be a part of, not because they have to, because they want to. That is the difference between great culture and engaged employees, and disengaged employees that could care less about the companies mission statement.

  • Ashley Konson

    This is a sad statement on the state of business today. When the culture of an organization is coherent with the brand’s purpose and values it becomes the “glue” for unifying the efforts of the organization behind the brand to win in the marketplace. I build on this thinking in a recent post on my blog if you are interested: http://ashleykonson.com/2013/0...

  • Mark Rome, zEthics

    Well stated, "A culture must emerge from and accurately embody a company’s
    people and processes."

    "This mission doesn’t spell out exactly how the company’s culture operates, but it
    provides distinct guidance and a clear ethic for making decisions."

    Within every organization, decision making drives performance. Every employee comes to work every day and makes decisions that impact performance.

    The workplace has many temptations that employees must resist, from the petty
    impulse to claim credit for someone else's work, to the unscrupulous lapse of
    lying in a negotiation, to the criminal act of misrepresenting financial
    numbers.

    These decisions, at every level of the organization, define the corporate culture and
    drive performance.

    In 2008, Harvard Business School Professor Robert S. Kaplan and his Palladium Group colleague David P. Norton wrote The Execution Premium: Linking Strategy to
    Operations for Competitive Advantage. Kaplan and Norton identify ten process (10) steps to strategy execution:

    Step 1: Visualize the strategy.
    Step 2: Communicate strategy.
    Step 3: Identify strategic projects.
    Step 4: Align projects with strategy.
    Step 5: Align individual roles and provide incentives.
    Step 6: Manage projects.
    Step 7: Make decisions aligned with strategy.
    Step 8: Measure the strategy.
    Step 9: Report progress.
    Step 10: Reward performance.

    "Ask a DEO to build her ideal company culture, and she’ll almost always start with
    its purpose."

    With the right tools and the right data, leadership can better understand its workforce to align the culture (decision making) with corporate goals and drive
    performance.

  • Chelsea Souter

    I agree with the sentiments of this article but the statistic is from 1990. Does that 80% number hold up 23 years later?

  • Luiz Arnaldo Stevanato

    The field of organizational culture is established and has many controversies and disputes.

    One can sustain that culture evolves from collective experience and is deeply ingrained in organizational life and manifest itself through practiced values. Or, alternatively, culture can be viewed as a company’s part, feature or component that can be crafted. In this last case, let face it, culture would be a so superficial phenomenon that no one should spent too much time on it.

    Long ago Drucker said: Culture eats strategy for breakfast, implying that the very power of culture come from its deep nature, a phenomenon persistent and unchangeable. The more deeply rooted and pervasive the values, more persistent and unchangeable the culture. (Gagliardi, 1986, p. 119). This is true mostly for culture core values and basic assumptions.

    Of course, there are others more superficial cultural elements that are affected by environment changes, but even these changes occur in synchrony with culture’s core. When this basic knowledge is ignored severe problems happen. That explains, at least in part, because more than 70% of change and innovations efforts fail (see: KATZENBACH, STEFFEN and KRONLEY, 2012; KELLER & AIKEN, 2008).

    GAGLIARDI, P. The creation and change of organizational cultures: a conceptual framework. Organizational Studies, Vol. 7 (2), 1986.

    KATZENBACH, J. R., STEFFEN, I., and KRONLEY, C. Cultural Change That Sticks - Start with what’s already working. Harvard Business Review. July–August 2012

    KELLER, S. & AIKEN, C. The Inconvenient Truth About Change Management - Why it isn’t working and what to do about it. McKinsey Report, 2008

  • Roger Hitchcock

    Company culture is the result of an organisations governance framework - by governance framework we don't just mean the formal but also the informal, simply because both exist, by design or not - I wrote about this a few weeks back...http://governancesa.wordpress.com/201...

  • David Cabrera

    Encuentro el articulo muy enriquecedor, pero yo siempre he cuestionado el hecho de que las compañias presumen que tienen una cultura constituida, con base en los años de permanencia en el mercado y una expansion aparentemente exitosa; cuando lo que en realidad hacen es juntar las empresas como piezas de rompecabezas que por forma encajan pero en el fondo no combinan. Ademas de esto las condiciones en las que se mueven nuestro mercado globalizado limitan el sentido de pertenencia; ya que el personal que hace el trabajo esta mas preocupado por mantener su asiento y mostrar resultados que demostrar una sinergia entre todos los procesos en la empresa.

    Por otro lado cuestiono los procesos de OCM (area que me gusta mucho) ya que solo son forzados a implementar las decisiones gerenciales donde la norma en algunas ocaciones es la adopcion mas no la integracion. Cualquier transformacion dentro de las organizaciones deberia de tener en cuenta la cultura como la plataforma para garantizar la integracion de las iniciativas con el ambiente laboral previamente constituido, a traves de exitosas practicas de motivacion al personal, de transmision del conocimiento y planes de sucesion en la linea de liderazgo.

    Las grandes empresas que han sobrevivido todas estas olas de cambios economicos han garantizado su sobrevivencia gracias a que han sabido integrar sus estrategias con la cultura de la empresa teniendo en cuentas las diferentes identidades culturales y aspectos geopoliticos de los paises donde tienen presencia.

  • David Cabrera

    I find the article very rewarding, but I've always questioned the fact that companies that have a culture presumed made, based on the years in the market and a seemingly successful expansion, when what they actually do is to join companies like puzzle pieces that fit shape but basically do not mix. Besides this, the conditions in our market moving globalized ownership limit, as the staff that does the work is more concerned about keeping his seat and show results that demonstrate a synergy between all processes in the company.

    On the other hand questioned OCM processes (area that I like a lot) because they are only forced to implement management decisions where the norm in some occasions is the adoption but not integration. Any transformation within organizations should take into account the culture as the platform to ensure the integration of the initiatives previously constituted within the workplace, through successful staff motivation practices, knowledge transmission and succession plans in the line leadership.

    Large companies that have survived all these waves of economic changes have ensured their survival because they have managed to integrate their strategies with the culture of the company, taking into account the cultural differency and geopolitical aspects of the countries where they operate.

  • Gabriel Offermann

    From the way the article is written, a DEO is more or less a role or mindset rather than a new position within an organization. Shaping a firm's culture is not the the DEO's strategy; rather he or she would believe that allowing the collective aspects of a businesses' participants collaborate and play out how the 'Culture' of the firm will grow. While I get the point of the article, I believe the reality is that someone from the head of a firm or a segment of a firm's influencers will guide the culture no matter how free you try to make the press. If no one within an organization steps up to set a standard, to set a bar to be reached then the organization will fall and that will be the firm's culture - defeat. If you see something within your place of employment's culture you disagree with, seek to change it; if that's not the direction of the organization's you'll either 'see the light' and 'join the team' or be exhorted to seek another culture to join. Again, the most important thing for a firm/business is that its members enjoy their culture. If there's something that needs to change; those who care about it need to seek to influence others and win them toward the change for the sake of the Culture.

  • dbrem

    What I've seen too often is that while company Executive want a specific company culture, they a) can't articulate it in a way that actually shapes culture or behavior; and b) don't want to make the "investment" in time, commitment or delegation of authority to actually foster the culture they claim to want.

    And I say this as "part of the problem".

  • steve

    Nice. But the idea of a DEO is feeds into the same bubble mindset of the first web revolution. This is a leadership team role and the DEO concept is not needed. This is also an issue of engaging all staff in the dialogue. The concepts are basic and obvious btw.

  • Lisa - Good.Co

    As someone with limited experience inside a traditionally structured corporate environment, I find this article tremendously interesting. Since culture in any human collaboration is an unavoidable fact, not to mention one that contributes significantly to the success or failure of that collaboration, it seems obvious to me that a company would want to exert some measure of influence in its development. Without a clear understanding of the company's prime directive, how can one ensure that everyone is on the same page, working toward the same ultimate goal? To my mind, to invest nothing whatever (money, talent, time) in company culture, or to pretend it doesn't exist, is to finish before you've begun.
    Thanks for the great read!

  • FluxAppeal

    I completely agree with Ian and Clint, but maybe the distinction of DEO itself points to the notion that corp. culture and its by-product benefits: happier employees, stronger branding, visibility and public admiration isn't something to be left to HR or worse, non-existent. Driving culture is as essential as any executive or managerial function, and the benefits should be the buy-in, but for many execs. understanding of how it impacts their bottom line is elusive.

  • Ian Buckingham

    Talk of the need for "culture change" is virtually a daily occurence. Sadly most of it is PR and lip-service sadly. I'm not sure how coming up with another title for a senior executive role is going to switch the prolonged focus from quarterly incremental results to medium term investement and strategy, the type of commitment required to meaningfully manage culture, but the article talks a lot of sense in the main.

  • Clint Waltman

    10 out of 10. Couldn't agree more. Challenging it is...getting the commitment and buy-in from other stakeholders to passionately drive and live by the culture...well - there's the real challenge! :-)

  • Lisa Kuhn Phillips

    This article is so well-written and describes the essence of the most honorable and necessary role in any company. Businesses that have this individual's commitment, drive and resilience create lifetime value and return. The return generated is not a line item on financials; it's the story woven in the financials. Is it a job? For those of us who have had the privilege of doing it, it's actually a calling.