Misplaced Logic: Why Some CEOs Fail to Prioritize Workplace Culture
Once a secondary topic in boardrooms, workplace culture has risen to prominence in the business world over the past several decades. Now it’s hard to find a CEO who doesn’t recognize the vital role their company’s culture plays in organizational success.
For example, in an extensive study led by a Duke University research team, 92 percent of the executives surveyed believed a company that improves its culture would increase its value. Yet only 16 percent thought that their culture measured up. The statistics seem incongruous, but there are several reasons why more CEOs aren’t prioritizing culture improvement.
The Rationale Behind Culture Inertia
Good business leaders understand how to forecast budgets, develop effective processes, and create competitive offerings. But many are stumped when it comes to shaping their company’s culture and maximizing its impact. Three primary reasons prevent them from taking the first step:
- The project seems too complex to accomplish effectively.
- The perception that the effort would take too long to see any measurable impact.
- They have too many other pressing needs and no extra time to devote to this project.
While these explanations may sound reasonable, the logic behind them is misplaced.
Business leaders are often stymied by the perceived complexity of molding their culture. As James Heskett writes in Harvard Business Review:
“An organization’s culture touches every functional department, affects assumptions about the nature of needed controls, influences the way people organize to work, and is often perceived as critical to its strategic direction.”
Because culture is so pervasive and influential, yet intangible, CEOs often don’t know where to start with such a project. And since they aren’t sure what they should do to change the culture or make it better—they often punt the whole concept to their HR teams and hope for the best. This is a mistake.
While HR professionals are integral to the execution of a culture program, the CEO must lead the charge for it to be effective. Heskett notes:
“Studies have shown that the single most important element in determining success in changing an organization’s culture is the interest, support, and even passion displayed by its leader. The quality of leadership is strongly linked to the level of employee engagement, and employee engagement (based in large part on trust) is a critical factor in achieving any kind of change.”
But CEOs don’t have to be experts in organizational culture to make such an initiative work. As amorphous as company culture seems, it’s simply the compilation of the staff’s everyday behaviors.
Most leaders can envision how their team would need to operate to maximize their potential. So to mold a high-performance culture, they just need to identify, model, and communicate the behaviors that will strengthen the organ
Once they establish the behavioral goals, they should make achieving them a team effort. Building culture isn’t an unsurmountable task; it is a “brick-by-brick” process.
As venture capitalist John Doerr wrote in Measure What Matters, “Time is the enemy of transformation.” Beyond complexity, CEOs are often daunted by how long they think a culture initiative will take before it has an effect.
James Heskett explains further:
“There is a perception that organizational culture change takes a long time, longer than the tenure of a leader, longer than the attention span of the organization—so long that other high priority initiatives by necessity will distract the organization from completing the effort.”
Consequently, many leaders decide that culture building is such a long-haul activity that it’s not worth starting. But such thinking is counterproductive. That’s because culture improvement isn’t a finite project; it’s an ongoing process. And while they won’t transform their culture overnight, they’ll see incremental gains week after week once they commit to improving it.
And even though a culture initiative will be a work in progress, leaders who demonstrate that it is a priority will get an immediate positive response. Their pledge to build a stronger team will boost morale, promote buy-in, and inspire employees to up their game.
Most business leaders don’t have an abundance of extra time on their hands. Even with carefully planned schedules, many spend hours dealing with unexpected urgent matters—from crises to time-sensitive interruptions. And the tasks they’ve budgeted time for are often core business operations that can’t be delayed.
Busy CEOs know they should also be focusing on their company culture. But with everything else on their plate, many feel there aren’t enough hours in the day to add another responsibility. While this sounds practical, those with this mindset are missing a crucial point: culture is the axis of everything else in their business.
As CultureWise founder David J. Friedman explains:
“Working on our culture is the very foundation for how we do everything else we want to accomplish. Every other initiative we want and need to make happen is directly influenced by the effectiveness of the culture of our organization.”
In The Advantage: Why Organizational Health Trumps Everything Else in Business, Patrick Lencioni writes that a company’s “health” refers to its culture and how effectively people work together. Strengthening culture may not seem as urgent as many other responsibilities, but it lays the groundwork for long-term success.
Lencioni concludes that an organization’s health has a “multiplier effect.” For every level of strategy or operational capability, an organization will go many times further with a highly functioning team than with a dysfunctional workforce.
“Our Culture is Already Good”
A fourth reason that some CEOs don’t make an effort to work on their culture is their perception that it doesn’t need improvement. They see their people operating relatively smoothly, so they feel like they’ve already checked the box for culture development.
But companies competing in the marketplace don’t create a product or service and never consider making it better. And teams don’t develop a process and never refine it as conditions evolve. Correspondingly, leaders should view their workplace culture with an eye toward continuous improvement.
The best leaders never consider “good” in any business area good enough. They know, as noted business consultant and speaker Jim Collins points out, that “good is the enemy of great.” And they view building an exceptional workplace culture as a key business strategy. As David Friedman explains in his book, Culture by Design:
“Not only is it the last remaining opportunity for a competitive advantage in a commoditized world, but it’s the most sustainable competitive advantage you can create because it’s so hard to copy.”
Rival companies can always roll out newer or better products and services, and they can engage in endless price wars. Yet these advantages are fleeting. However, an organization with an outstanding culture has created the ultimate differentiator and will consistently stand out and attract more business.