Culture is the single most important ingredient in any company’s success. I live and lead by this motto. But ask me what culture is and I will fumble. I can’t categorically define it. I can’t add this precious asset to my balance sheet or easily measure it. But I realize, if I want to succeed, I have to get culture right.
I work in manufacturing which, contrary to popular opinion, runs on people—not machines. As in technology or finance or law, an A player in manufacturing can be 10 times more productive than a B player. A players only work at companies with top-notch cultures. This simple truth, in order to get and keep good people you need to provide a place they want to work; it’s the foundation of every high-performing company I know.
So, how do we build something we can’t easily define and measure? As leaders we make decisions everyday with incomplete information. We analyze what we know, trust our gut, place our bets and ultimately lead through the ambiguity. Culture is no different: we know it when we see it. And the good news is, there are many leaders and companies we can learn from: those people and places who consistently get this right. Looking at these examples, I believe there are six guiding principles to building good culture—no matter your size, industry, or geographical location.
Measure it so you can manage it
Although it is not easily done, that doesn’t mean we shouldn’t try to measure the health of our culture. Gather qualitative and quantitative input at all levels through surveys, one-on-one conversations, and regularly scheduled feedback. Ask how people are feeling and what can be improved. Without this data to guide your gut instincts you will be flailing in the dark.
For example, just last week I found out there was a group meeting where someone said, “Ethan just told me to do it.” I had no idea I was forcing someone to do something they didn’t want to do. I don’t want that to be our culture—just doing things you think are stupid because your boss said so. So, after asking for feedback from this meeting, I was able to quickly act to fix the problem.
Create a safe environment for feedback
Rewarding people for speaking truth to power is critical. The biggest hurdle to getting good data arises when your managers have ignored, shutdown or reacted negatively to—or worse, punished people for—honest feedback. All it takes is one mistake to instill a fear of speaking up that will permanently inhibit your ability to get honest input you can act on to improve your culture.
I remember one day I was upset with an employee for doing a bad job. I gave them tough, honest feedback, and they chose that moment to tell me everything I was doing wrong. I shut them down because I felt like they were deflecting their poor performance. In that moment, I permanently damaged the relationship with that person. I missed out on valuable data and in the end, they left the organization.
Don’t ignore signs of trouble
If it feels awkward or off, figure out why, no matter what. We are finely tuned to notice when things are off. A meeting that was just too quiet. A person who just isn’t interacting. A side comment that seemed a little harsh. Granted, sometimes you can’t tell whether it is a personal or a work matter bothering somebody. But if it feels odd it’s often a culture issue that should be probed and learned from.
For three years, I ignored the feeling that one of my team members had two faces—the nice one they showed me and the mean one for many others. I had glimpses of this behavior when I came into rooms and felt quiet tension and exchanged glances after this person spoke. I ignored the signs and almost lost critical employees over it until I investigated, made the tough decision and fixed it.
Raise up values as aspirations
Values are the bedrock of your culture, often synonymous with good culture. Every single person should know your values by heart and be able to connect them to what they do at work. Embed stories of values in daily work to show that your values are practical and integrated into all aspects of your company. Always lead by example by living your values and, most importantly, apologizing when you fail to. We don’t ask new employees to memorize our values, but after they have been at the company a few weeks, we ask them what they think our values are, based on what they’ve seen. Then I have them share examples of what they’ve seen. This shows me whether we are truly living our values even without speaking them.
Stay accountable to your values
Knowing and understanding values is critical, but so is ensuring that you measure, advance, and reward based on adherence to values. Companies often fail to bake values into their performance management system. And it’s a fatal mistake. Identify the behaviors associated with each value and get formal feedback during all reviews on each behavior. This sends a strong message that values are never negotiable. That values fuel individual and collective success—no exceptions.
When I finally started letting people go who were good performers but bad at behaving in accordance with our values, our culture started dramatically improving.
Culture is never finished. It takes years to build and moments to destroy. One bad apple can spoil a good culture and different moments require different cultures (like a pandemic for instance). It requires constant vigilance. Ultimately, there is no single winning formula. But hard work and incremental improvements will eventually get you the culture you want. Last week, our leadership spent all day discussing strategy; we shared more successes in an hour than we would have the whole day five years ago. We covered difficult topics ranging from vaccines to diversity and it was smooth and fun and relaxing. We were all energized after four hours of Zoom. It took seven years of hard culture change, but it felt great.
At the end of the day, culture is a bit like love. Soft, mushy, hard to define, but ultimately critical to a happy (work) life. And just like love, maybe we don’t need to agree on a textbook definition to believe in it, nurture it and let it enrich us. We know it connects us. We know it helps us succeed. And we know that it is up to each of us, especially leaders, to foster and protect it.
So let’s not get caught up in pursuing the “right” culture, or finding the perfect words to succinctly describe it. Let’s trust our gut, embrace honest feedback, hold ourselves accountable to living our values, and work every day to be the kind of leaders who build companies where people want to come to work.
Dr. Ethan Karp is an expert in transforming companies and communities. As CEO and president of nonprofit consulting group MAGNET, the Manufacturing Advocacy and Growth Network, he has helped hundreds of companies grow through technology, innovation, and talent. Prior to MAGNET, Ethan worked with Fortune 500 companies at McKinsey & Company.