Does this story sound familiar?
How does it feel when you are finally ready with your business idea? You are bristling with excitement and raring to go.
Your core team has assembled, the capital has been secured, and plans are in place.
You hit the ground running as you and your team start the execution of your plans.
The plans bear fruit, and results start to materialize. You decide to hire employees to take the growth to the next phase.
Just when all seems to be going great, you face unexpected challenges.
The productivity of your new teams takes a nosedive. You start struggle to retain the talent you had recruited with great expectations.
Does all of this sound familiar?
A lot of organizations go through this rough phase where they struggle to maintain the balance they had created before they scaled up their teams.
In many cases, founders find themselves in this situation because they had ignored one very crucial part of business: work culture.
Stop thinking of culture as something ‘secondary’
A lot of founders and CXOs often make the mistake of not taking culture as seriously as they should. Everything seems fine in the initial period. However, the moment they scale up and the headcount grows, they suddenly find themselves in a siege-like situation. Improper communication, absence of company values, seeping negativity in the work environment, micromanagement, and more such things crop up, ultimately driving away good talent.
The reason? The founders didn’t take their culture seriously.
An often-overlooked fact about culture is that it fills the gaps that HR policies and regulations cannot fill. It is a positive driving force that gives life to your workforce. If strategy helps you build and maintain organizational viability, culture helps you establish effectiveness.
What is culture?
It isn’t easy to summarize culture into a single definition. Harvard Business Review has explained it in an interesting way. It states, “Strategy offers a formal logic for the company’s goals and orients people around them. Culture expresses goals through values and beliefs and guides activity through shared assumptions and group norms.”
Culture determines how your employees communicate with each other, yet, it is much more than communication guidelines. Your organization’s core values are closely tied to the culture.
Therefore, it’s imperative that you define your work culture right at the very inception of your company. This will set the right expectations and ensure your organization doesn’t become a rudderless ship after its growth.
Culture eats strategy for breakfast
When you hear the terms ‘culture’ and ‘strategy’ mentioned in the same breath, which of them will evoke your interest more?
An extensive study conducted by Harvard professors Kotter and Heskett found out that over a period of 11 years, strong organizational culture increased the net income of 200 businesses by 756%. The findings were published in a book called ‘Corporate Culture and Performance’.
In The Culture Code, Daniel Coyle underlines the importance of culture through an important point. He writes, “Culture is a set of living relationships working toward a shared goal. It’s not something you are. It’s something you do.”
There is no substitute for good culture. In the words of the legendary management expert Peter Drucker, “Culture eats strategy for breakfast.” It defines what is accepted and encouraged and gives clarity to employees about what is not accepted and encouraged in your organization.
As a founder or a CXO, you must define your culture right from day one, much before your team has expanded. The sooner you set the tone and direction for your culture, the lesser the chances of chaos erupting when you scale up.
The 2 core cultural dimensions – Which one will be yours?
In an extensive guide about corporate culture, experts Boris Groysberg, Jeremiah Lee, Jesse Price, and J. Yo-Jud Cheng have noted eight distinct culture styles. The guide, authored by four experts, states that regardless of the type of an organization, its size, the industry it operates in, and where its located; there are two primary dimensions with regards to corporate culture.
- People interactions
- Response to change
Ask yourself the following questions:
- In terms of people of interactions, will you term your company as highly independent or highly interdependent?
- Will you place greater value on autonomy, individual action, and competition?
- Or would you encourage integration, building relationships, and coordination?
Depending on the nature of your business, you would either have an independent or interdependent workforce.
An independent workforce will emphasize more on autonomy and competition, while an interdependent one will work towards integration and coordination.
Response to change
Now that you are clear which bracket you fall into from the perspective of people interactions, let’s dive into the second dimension, response to change. Once again, ask yourself the following:
What would be more important to you, stability or flexibility?
If you had to choose from the following two sets of organizational traits, which one would you find more suitable for your business?
- Consistency, predictability, maintaining the status quo
- Flexibility, adaptability, and receptiveness to change
If consistency and stability are the defining traits of your organization, then you would build your culture around the importance of following rules, establishing control structures and reinforcing hierarchy for efficiency.
If flexibility and adaptability would be the core traits of your company, then you would encourage a culture of openness, innovation, and diversity.
Great transformations begin from our own selves
Charity begins at home. Dreams are important, but equally important is not getting carried away with illusions of grandeur. Great founders never miss regular self-reflections that help them stay grounded in reality. Jennifer Porter, a global executive coach, has written extensively about the importance of self-improvement. “To improve your team, first work on self.” she writes.
Similarly, when you are preparing to build a core team and align them with the culture you want to develop, you need to ask yourself the following:
- Are you, yourself, aligned with the cultural ethos and traits that you want to foster in your organization?
- Is your understanding of these cultural traits complete and aligned with the general expectations that your team would have with them?
Porter further writes, “Teams are complex systems of individuals with different preferences, skills, experiences, perspectives, and habits. The odds of improving that complex system in a meaningful and sustainable way are higher if every team member — including the leader — learns to master these three foundational capabilities: internal self-awareness, external self-awareness, and personal accountability.”
Internal self-awareness – it can be learnt by pausing to reflect in challenging or emotionally charged situations and asking yourself about:
- The emotions you are experiencing
- The assumptions you are making about the other person or the situation
- The facts and your own interpretations
- Your core values and how your reactions are being impacted by them
External self-awareness – this can be learnt by staying conscious about how your words and actions could impact others. You can do this by asking your teammates:
- If the things you are doing in team meetings are helpful
- What are the things you are doing that are not helpful
- If they could change one part of how you interact with them, what would it be?
Personal accountability – this can be learnt by accepting your role as a leader and being ready to take extreme ownership. You can do this by:
- Recognizing and accepting that there is a problem when there is a problem
- Understanding that you are part of the problem and not someone who is an outsider
- Taking personal responsibility to find and implement a solution
Embrace T-shaped leadership
What is T-shaped leadership? A T-shaped leader has a depth of skill in a particular area (represented by the vertical line in ‘T’) while also possessing the ability to work cross-functionally across other connected disciplines (represented by the horizontal line in ‘T’).
For example, a product engineer who excels in product development may be quite adept in UI/UX design, well versed in handling customer queries, and could also have a working knowledge of how the sales function works.
Although their core expertise lies in product development, the product engineer would be well-placed to work with the UI/UX team, the customer success team, as well as the sales team.
When it comes to establishing the right culture, it’s critical that, as a founder, you possess T-shaped leadership qualities and have all the core leadership traits with some of them being dominant in your personality.
Who coined the term ‘T-shaped professional’?
The credit of coining this term is disputed. For some, it is Tim Brown, CEO of IDEO, while for others, it’s McKinsey and Company. When we dug deeper, we found that the idea of a T-shaped professional did originate at McKinsey & Company in the 1980s. It came to be known in the business world in a 1991 talk about engineers by David Guest. However, it was an interview of Tim Brown that made the term famous in modern times.
8 styles of organizational culture
Based on their decades of experience in conducting in-depth analyses of different organizations, executives, and their employees, HBR has come up with a comprehensive model that outlines eight styles of cultures.
Let’s explore each one of them in the following
- Focuses on building relationships and mutual trust
- Work environments are warm, with collaborative and welcoming people ready to support and help
- Employees are loyal, and the management emphasizes nurturing positive relationships
- Work environments are known for tolerance with compassionate people
- Employees have a long-term perspective to do good and are united with a sense of building global communities and sustainability
- The management encourages and emphasizes contributing to a greater cause through shared ideals.
- Organizations with this type of culture encourage exploration and creativity
- Workplaces are inventive places where people are open-minded and free to explore new ideas
- Employees have a sense of curiosity, and the leaders focus on innovation, knowledge, and adventure
- Fun and excitement are the primary elements of this culture
- Lighthearted workplaces where work is centered around happiness is its hallmark
- Employees work with a sense of playfulness and stimulation
- Leaders encourage spontaneity and have a great sense of humor
- Achievement and winning are the main characteristics of this culture
- Work environments are outcome-oriented and merit-based places
- Employees have a strong drive to achieve top performance and success, while leaders focus on goal accomplishment
- Defined by strength, decisiveness and boldness
- Workplaces are competitive, where people strive to gain personal advantage
- The uniting factor for employees is strong control.
- The management focus on confidence and dominance
- Planning, caution, and preparation are the notable characteristics of this cultural style
- Work environments are predictable places where things are thought out carefully
- Employees have the desire to feel protected, are risk-conscious and anticipate change
- Leaders emphasize being realistic in goals and focus on planning ahead
- Respect, structure, and shared norms define this style
- Workplaces are methodical, where rules are given importance
- Employees are united by cooperation, and the leaders focus on procedures, time-tested practices, and customs
Understanding the integrated culture matrix
Based on the styles mentioned above, this integrated culture matrix helps us understand each style better. The X and Y axis of the matrix depict the two core cultural dimensions that are people interactions and their response to change.
It’s important to remember that no style is inherently better than the other. Any style an organization chooses depends on multiple factors such as the business it is into, the type of workforce it has hired, the place where it’s based out of, the industry, strategy, and organizational design.
While one particular style of culture could be dominant in your organization, there could be other styles that you could seek to imbibe. However, if you seek to imbibe styles that are far apart in the matrix, it may confuse the employees. For example, if you want to build a purpose-driven culture, it would be confusing for employees if you wish to imbibe the authoritative style as well.
In other words, each style in the same quadrant or in the same line is likely to be easily embraced. Those in different quadrants and very far apart may not be compatible with each other.
This is why it’s important that your core team is on the same page when it comes to the primary and secondary cultural attributes of the culture you want in your organization. If that happens, you would be able to hire employees who are the best fit for your culture, resulting in great employee engagement and customer orientation.
3 cultural fundamentals your core team should be united upon
Daniel Coyle has identified three fundamentals of culture in The Culture Code. It’s critical that your core team is united on all of them. They are:
- Build safety
- Share Vulnerability
- Establish Purpose
Many times, founders tend to prioritize core business aspects when it comes to choosing core team members. This won’t end well if any member of the core team doesn’t have the same cultural values. There should be unifying factors from the cultural perspective among all of them so that it helps you stick together and sail through storms.
What is the link between culture and outcomes?
Culture has a heavy influence and a strong link with outcomes. However, the context in which an organization operates also matters. Additionally, the strength of the culture also plays a huge part if you want to get an unbiased and clear knowledge of the impact. In this context, these points hold great significance.
- A strong culture is sure to drive positive outcomes if aligned with strategy and leadership
- Succession planning requires a forward-looking strategy and culture
- In a merger, a great way to speed up integration is designing a culture based on complementary strengths. This will also create more value over time
- Learning would be of high importance in a constantly-changing and uncertain environment where businesses need to be agile
- If not aligned with strategy, a strong culture will end up becoming a liability
Keka’s tryst with culture
As an organization, Keka has always given importance to culture. Our retention levels among employees have been high even when many other organizations faced attrition, all because our leaders understood the significance of culture.
When our own core team set out to build the best HRMS, they did it to empower founders and HR leaders with the right set of tools and processes that would help them sustain a great culture.
For example, you cannot build a culture of self-accountability unless it is ingrained in the mindset of your entire workforce. Self-accountability is not something that could be forced down the throats of your employees.
Taking this into consideration, Keka modeled its Leave and Attendance module in such a way that it encourages employees to be transparent and mindful of their attendance. Any employee can view which member of their team is on leave or would be working from home. Keka also shows the average number of hours an employee spent and helps them compare it with the time their whole team spent. The same goes for daily attendance and login. Keka’s dashboard would show an employee what is their login time in comparison with their team’s login time. All of this will provide a nudge towards self-accountability.
We are proud to say that we have implemented these and many other initiatives to drive positive culture and behaviors across all our teams, with amazing results.
We would love to connect with you to share insights about culture and what you may need in building or sustaining it.