Why Culture Matters More Than Your Bottom Line

The culture of your business will determine your long term success.

BY PHIL EYRE

On Sunday, April 9th 2017, Dr David Dao boarded United Express Flight 3411 at Chicago’s O’Hare International Airport destined for Louisville, a 1-hour 20-minute flight. It was a full flight but, unperturbed, Dr. Dao boarded and settled into his seat.

 

United Airlines had a problem. They needed to get four of their crew to Louisville and, as is common practice in the industry, sought to coax passengers off the flight for limited compensation. Not enough people took up the offer, and the flight boarded. Dr. Dao was selected as a passenger to be ‘bumped’ to make the space. He was not keen to leave the flight and after an exchange of views, United Airlines staff enacted procedures and called security to forcibly remove Dr. Dao, who was injured in the process.

Other passengers filmed the incident, which quickly went viral on the Internet. CEO Oscar Munoz initially praised staff for following procedure, which added impetus to the growing sense of anger expressed on social media channels. Long-term customers filmed themselves cutting up their loyalty cards, United’s parent company’s share value plunged by US$750million, and Mr. Munoz subsequently lost his anticipated promotion as chairman of the company.

Cultural Factors at Work

This one brief incident has had a significant impact on the business (and on Dr Dao). While some may apportion blame on the crew, social media, airline overbooking practices (over 500,000 passengers are compensated for overbooking every year), the root cause is company culture. A culture that encourages its employees to blindly follow policy over common sense, or that discourages doing the right thing with fear of recrimination, is not healthy.

An incident like this was predictable and likely. Just days before, two teenage girls had been prevented from boarding a flight to Minneapolis for wearing leggings, deemed inappropriate by United Airlines staff, and a family with young girls had to change their leggings for a dress as the gate agent told them, ‘I don’t make the rules, I just enforce them.’

Cultural factors within any organization determine how things get done. Culture sets the basis for what it takes to fit in and the actions and attitudes that will cause rewards and recriminations from peers and people in authority.

Culture is expressed in symbolism: where the CEO parks her car, workplace uniforms, who gets the nice office, who is given an expense account. Cast your mind back to your first few weeks of joining your employer; you will have quickly observed and assimilated what needs to be done to fit in, whether it’s the clothes you wear, your approach to timeliness or the way that you communicate with colleagues and clients. You might even have been told ‘that is not how we do things around here.’

As human beings, we need a flourishing culture to thrive. If we are to be at our best, the conditions in which we live and work need to be nourishing, not noxious. A nourishing working environment enables us to:

-    be creative;

-    achieve faster and better solutions;

-    anticipate problems and take preemptive action.

A positive, safe working culture will ensure that people are working far more effectively together, identifying how their strengths can be applied to support colleagues whilst recognizing their own needs and engaging sources of support from within the team.

Better decisions, higher employee engagement and greater creativity all flow to the bottom line of any business.

How Can a Nourishing Culture be Fostered?

Leaders have a critical role in shaping company culture. Any community - workplace or otherwise - will look to its leadership to determine and demonstrate acceptable practices and attitudes. The expectations, attitudes, and behaviors of those people with influence are significant in establishing cultural norms.

What Does a Positive Culture Look Like?

The research shows that companies that foster a caring, nurturing, ‘safe’ culture will achieve extraordinary results. Simon Sinek (‘Leaders Eat Last’) describes two types of company. Those that create safety within their organizations and those that don’t. We all face the external danger that is outside of our control, for example, Brexit, stock-market gyrations, new legislation and environmental conditions. However, there are threats within our companies that we can control. The all too common approach is to allow these internal dangers to take hold. If the numbers start to falter, jobs are slashed. If results are not achieved, employees suffer immediate recrimination. Rather than support one another, people seek to climb over each other and perceive that their colleagues might want to stab them in the back to get ahead. The result is that people feel intimidated, humiliated, isolated and useless.

In our work, we recently visited an organization that had suffered such a culture. We heard how the senior managers had been taken into a room, the CEO had pointed at them all with an aggressive wave of the hand and told them that half would lose their jobs within 12 months unless their financial targets were met. The impact on morale and teamwork was devastating. Thankfully they are now under new leadership and we are working with them to change the culture of the business to be more nurturing, trusting and, in turn, effective. At our most recent group check-in, one senior manager reported that he now ‘feels safe’ to volunteer new ideas, to trust his colleagues and to report problems - great for the businesses - and good news for his health, too, as he feels significantly less stressed.

Business leaders who want their company to flourish will actively create a sense of belonging, fostering a safe culture and ensuring that the people take priority over the numbers. Establishing core human values and beliefs, the business will be marked by a sense of ‘got your back’ (rather than ‘stab your back’), both in terms of support and challenge. There is freedom to try out new ideas and if they don’t work, that’s not career-ending. If mistakes are made, there is assurance that the community will work together to deal with them. The result is high levels of trust and empathy, mutual support and accountability, which ensure excellent outcomes, with people who are committed, work more effectively and are happier and healthier as a result.

Research at Google has drawn the same conclusion (‘The five keys to a successful Google team’, Julia Rozovsky, 17/11/15). Having conducted extensive research into what makes a Google team effective, they discovered that psychological safety was by far the most important factor. More important even than technical talent, skills mix and blend of personal styles. How the team members interact is far more import than who is on that team. Psychological safety allows team members to feel safe to take risks and be vulnerable in front of each other. This, in turn, underpins the other four keys to success (dependability, clarity, meaning, and impact).

The ability to be vulnerable, to take a risk, to ask a question that needs to be asked and risk looking foolish, to suggest an idea that might go nowhere, to ask for help, to volunteer to help a colleague, to try new roles: these are all demonstrations of what flows from psychological safety. Echoing Simon Sinek’s work, Google also discovered that employees who feel psychologically safe ‘are less likely to leave Google, they’re more likely to harness the power of diverse ideas for their teammates, they bring in more revenue, and they’re rated as effective twice as often by executives.’

Great leadership will identify the desired culture of the company - one that creates a sense of belonging and, as for any objective, will review the current state with the desired state. Great leaders will begin by modelling the culture that they want to foster, killing rumour and gossip and instead speaking well of colleagues and stakeholders in the business. They will invest in their relationships, spending quality time listening to each other, growing in empathy, supporting and challenging with a genuine sense of desire to see others achieve great things. As leaders, you can’t demand trust, big ideas or cooperation; these are qualities that flow naturally from a sense of feeling safe and trusted among the people with whom we work.

How are you creating and contributing to a flourishing culture in your business?