Why Culture eats Strategy for Breakfast

Culture, values, hiring the right people, motivating your employees, developing your employees, all these areas are hard to define and address within a company. To start of these processes it can be helpful to look how other companies have done it. So why not learn directly from the best? In this blog we will take a closer look at 7 essential HR lessons from Google set out in Laszlo Block’s book Work Rules! We will look at their successes and, maybe even more importantly, their failures. We will set apart these lessons and show you how they can help you into developing the right HR processes.

Lesson number 1: Vision, mission, transparency and voice are key to culture.

We keep repeating it and Laszlo confirms it, if you want to build a strong company culture, you need to start at the beginning. You need a clear vision, mission and connected values which describe why your company even exists. These need to be easy to identify with, ambitious and meaningful. The second aspect of their strong culture is their transparency and voice. Laszlo describes a corporate culture where everybody has access to everything in their internal systems from day one. Their CEO gives weekly Q&A sessions about what is going in in the company and they are even regularly running programs where employees can express complaints about internal policies, regulations and way of doing business (like the one in 2009 called ‘Bureaucracy Busters’).

Main takeaway: if you want to turn your departments with employees into teams with colleagues then you need a clear vision and mission, transparency and to let their voices be heard.

Lesson number 2: Hiring the best takes time, resources, (team) effort and high standards.

Within the recruitment department they’ve gone through many phases of what they perceived as the best way of hiring. First, they only admitted the candidates with the best qualifications, then they focussed more on mediocre candidates with better potential for development, in the end they are focussing now on a healthy mixture of both. Above all, they keep their standards high, which is key to the standards of their employees. Only 0,25% of all applicants gets the job. Laszlo compares that with the prestigious university of Harvard, which admits around 6,1% of all its applicants. Just so you understand how few candidates actually get the job. What’s more is that Google interviews new candidates in teams of four. These teams often consist of colleagues, managers, subordinates and one “cross functional interviewer” from an entire different department. He or she should ensure that the candidate is not solely being hired out of mere desperation.

Main takeaway: if you want to have the best teams, never lower your standard to speed up a hiring process. Hiring takes time, effort, resources and high standards. Start to improve your hiring process tomorrow by setting up hiring teams for function instead of ‘just a hiring manager and a recruiter’.

Lesson number 3: Promote autonomy and initiative by encouraging data usage and discouraging politics.

Google has a very flat internal hierarchical structure, in fact there are roughly four levels of hierarchy across all Google employees. Laszlo describes an internal culture where data trumps politics and promotion can only be made if the data shows that you are worthy of the promotion. So, for instance, you want more autonomy or you would like a promotion up the hierarchical ladder, then the data of your past performance must justify this. You must have shown in your work experience that you have a recorded history of making good decisions or leading teams/projects. Only then are you entitled to move up, the internal politics play less of a role. This also creates understanding amongst the rest of the employees why somebody is entitled to a better (paid) position within the company.

Main takeaway: hierarchical decisions need to made based upon transparent data. This has to be done in order to make the right decision, but also to gain support and understanding for the decision being made.

Lesson number 4: Study the top to improve the bottom.

Many companies look at their employees through a performance ranking system called the Bell Curve method (you can read more on that here). They use this system to decide who gets a bonus and who should be let go. Google uses this method too, but uses its results differently. They study their top performers and see what makes their performance so great. They use these results to create similar environments for their bottom performers in order to increase their performance. Project Oxygen showed that an exceptional manager is essential for a top performer. Engineers under an exceptional manager performed 5 to 18 times better than their peers. Google often evaluates the bottom 5% and offers them support to increase their performance.

Main takeaway: try and understand what makes your top performers so good and try and create similar environments for your bottom performers to improve them. Exceptional managers create top performers.

Lesson number 5: Stop looking for external teachers, use your own internal teachers.

Whenever companies feel the need to develop their employees, they often refer to external training agencies. They provide lengthy training sessions and workshops in all forms and ways. Even though this is a billion-dollar industry, the effects are often underwhelming. Laszlo notes that this is often due to ill design, lack of specific information, incorrect teachers or even that the trainings are not analysed for their effectiveness. Within Google they therefore mostly stopped with external development agencies, but are now looking inwards for qualified teachers. That means that if they need to increase sales, or address bugs faster, or find better candidates, they will look for their best sales person, bug squasher or recruiter to teach the rest of the department their tips and tricks. This reduces the training costs and brings their employees closer together in a common goal.

Main takeaway: if you want to develop your employees, look for internal teachers first before reaching out to external teachers.

Lesson number 6: Pay unequal based upon performance, award victories with experiences and encourage failures.

In a world where there are still big discrepancies in pay between gender and race, Google still chooses to pay different people in a similar position different salaries. So how do they justify this? Simple, their solution is to pay fair. If an employee out-performs their colleague by an extra 20%, then this employee will be often entitled to more benefits (in terms of stock options, bonusses and salaries). Although this in and of its own sounds fair, it does not mean that Google handles each situation as well as it ought to, which leads to the occasional salary scandal. Google often tries to increase happiness and performance as well, one of the ways of doing so is to hand out bonusses to well-performing employees. However, an internal survey showed that the employees did not necessarily became happier because if it. To address this Google started to award well-performing teams with experiences instead of individuals with money. This created a stronger sense of team and belonging amongst employees.

Finally, Google also tries to encourage all calculated risks. Google Wave in 2009 failed, but Google rewarded the team working on it anyway. Why? Because Google wants to encourage calculated risks and innovation. Even if the innovation might not turn out to be the next award-winning functionality this time, it could be just that the next time, so you need to keep your team motivated towards innovation.

Main takeaway(s): pay unequally based upon performance supported by data. Celebrate team performance instead of individual performance with experiences. Encourage calculated risks and innovation, even if the possibility exists that it could fail.

Lesson number 7: Face cultural problems, altering behaviour and the power of nudging.

Google has a company culture of transparency, as discussed under lesson number one, and even if that sounds great and has a lot of benefits, it can also backfire. One of the ways it backfires is that Google suffers one significant leak almost every year. When that happens Google announces in the entire company what has been leaked and what has happened to the employee that has caused the leak. Even though this might sounds devastating, Laszlo argues that the benefits of transparency outweigh these disadvantages. The same can be said for when Google tried to decrease some perks and benefits which was met by entitled behaviour such as scolding of and throwing food at cafeteria staff. Google published the entitled behaviour via surveys which led to staff-wide embarrassment and a drop in the level of entitlement. Google also had to deal with the fact that they wanted to change certain behaviours, such as keeping doors open for strangers, eating unhealthy food on lunchbreaks and leaving unlocked computers unattended. From their experiments it shows that restrictions and information about a better choice do not work. It is often met with anger and frustration. Their solution is to keep the freedom of choice, but nudge towards the right behaviour. For example, keep healthy and unhealthy food in the cafeteria, but keep the healthy food widely on display and easily to access while unhealthy food is more hidden and harder to access.

Main takeaway: the only way of facing cultural problems is head on and if you want to change behaviour then you should keep the freedom of choice but nudge towards the right choice.

In conclusion

The biggest insight of ‘Work Rules!’ is that data is key to many HR problems. It should be the key driver behind decision making, culture and many other aspects of HR, not only to do the right thing, but also to create understanding for why you do things. In this blog we have given you a very small taste of a must-read for any HR employee. We therefore strongly recommend that you read Laszlo’s full book, make your own analysis of what might work for your organisation and start making implementation plans to improve your business. Or you can get in touch with us and we can help you to with skipping the first two steps and directly move towards solutions to improve your organization.

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“Quiet quitting” – it seems to be the latest within HR fashion. What is it and why are we talking about it?

First off all, I think the term “quiet quitting” is wrong and bad. People are not silently leaving office buildings to stop working or quitting their jobs in complete silence – that is not at all what this is about. Quiet quitting is the idea that people are not going “above and beyond” their paygrade anymore and just do the work they are paid for.

Let’s be real. Why should an employee do more than they are paid for? An employee agreement is just that: you pay somebody to do their job. Nothing more, nothing less. That means: not answering emails on a holiday, not working outside office hours, and not staying late to finish that project.

So, if there is anything I want you to take away from this post, then this is it: let’s stop talking about “quiet quitting” and start talking about “disengaging”, because that is what it is. People are still doing their jobs, but they are slowly become disengaged and unmotivated to “go above and beyond”.

Why more and more people start to quit quietly?

Now you might ask: Why? Why is this happening? The internet seems to be split up between two reasons: 1) Employees are drastically re-evaluating their work-life balance, or 2) bad leadership has undervalued and demotivated employees. Whatever the reasoning behind it, its implications are truly important. Disengaged employees will perform less than engaged employees, impacting the performance of your company overall.

Before we jump into solutions for a “problem” we do need to consider whether somebody became disengaged because of re-evaluating the balance in their worklife, or because of bad leadership and demotivation. If somebody wants to revaluate the balance in their worklife, there is maybe nothing you could (or should) do. Your employee will do their job, but according to the parameters that you have set in the contract – and that is it.

If somebody became disengaged because of bad leadership or demotivation, then there are opportunities to re-engage your employees. So, let’s move on to the interesting stuff: how to re-engage employees!

What can we do?

At this point, if you still expect your employees to go above and beyond without them getting anything in return you should not be surprised that your employees get disengaged or unmotivated. And why should they? You are offering nothing in return. The good news is there are solutions. The bad news is that those solutions will require effort.

If you are a boss, manager, or leader whose employees are slowly disengaging, there are ways to turn this process around. How? By re-engaging with your disengaged employees. Here are 5 ways to do that:

1. Asking the tough questions

On a daily basis, walk around the office and stop by or call one colleague and blatantly ask them: “What are we not talking about here at work? What can we improve?” This is a powerful way of directly asking somebody to vent some frustrations and let them be a key part of an improvement process that they see as problematic.

You might discover some unique opportunities while engaging one employee at a time. There are ways to make this into a scalable process as well for larger companies.

2. Inspiration and daily work

Remind people of your vision, your mission, your morning-star. Connect meetings to the abstract level of your purpose. We are here to make money, yes, but there is more to it. “Today we are doing A, B, C, which will allow our clients to do D, E, and F – which will improve the lives of/the world/the environment” – you get the drill. People need inspiration to stay engaged. Continuously.

3. Allowing engagement

A lot of managers expect a top-down management structure where employees simply accept the strategy, take on their tasks as instructed, and are fully engaged into everything they do. Now this is a prime example of having you cake and eating it. You can’t have it both. You’ll have to choose. Either you choose a management structure where you want to impose your will, strategy, structure, and tasks – but also accept disengaged employees, OR you involve your employees with decision making processes around structure, strategy, and their tasks to get them engaged.

4. Development, perspective, and incentive

One way of engaging disengaged employees is by giving them a clear-cut “carrot” to re-engage. You can do this by giving them the perspective of development. That either may be a promotion, an education or training (paid for by the company), or a wider set of responsibilities.

Now I know that this is a bit of a sensitive topic, but you can do that through a bit of good-old performance management. Does that mean measuring every datapoint you have from when somebody clocks in to how fast they type emails? No of course not, this is not the 20th century anymore. But you can set up a couple of KPI’s that reflect a concrete goal and subsequent reward.

5. Improve leadership

Sometimes it is hard to admit, but if you can’t point out the problem in the room – then maybe you are the problem in the room. During your times you meet 1-to-1 with your employees, try to ask what you can improve about your leadership style. Ask your employees what you can improve or what they miss in your leadership today. Sometimes your employees require different ways of leadership than what you are offering today – maybe more directive, maybe more guidance, or maybe more freedom and individual responsibility.

In conclusion

“Quite quitting” is a bogus term that is simply incorrect. People are reconsidering what they want in life and can become disengaged at work because of a multitude of reasons. If they are simply reconsidering their work life balance, then there is little you could (or should) do. If they are becoming disengaged because of bad leadership or demotivation, then there are things you can do. If you need help:

1. asking the tough questions
2. connecting your vision and mission to your daily work
3. identifying where you can involve your employees more
4. developing incentive programs
5. improving your leadership capacity

Then get in touch with us and see what we can do for you!

When we think about culture, we think about HR departments who coordinate culture related projects and value determining group activities. However, culture adds more value than it is often credited for, also for the marketing department.

Let’s say you believe that there is some value in culture, but that it is not that important for your company. Let’s even say that you do not care about internal atmosphere or how productive your employees are. Let’s even go so far to say that you believe that, as long as everybody just does their job, there is no need to really worry about culture. Even then, even if you do not care about these internal factors, then there is another reason why you should worry about your culture: it directly affects your branding as a company, and could either be beneficial or detrimental.

Wait, what?

Yes, you’ve read it correctly. Culture, an internal challenge, will determined how you will be perceived externally. Let’s do a thought exercise. Think about a random company you’ve ever been in touch with. How did you perceive your interaction with that company? Positive? Negative? And what shaped that interaction? Was it the designed marketing message on their website? Their advertisements? Or was it the interaction with their customer service-, helpdesk-, or sales representative? More often than not, our opinions of companies are shaped with how we interacted with individual employees. How those respective individuals interacted with us is heavily dependent on how the internal culture and values are set up. For example, a company whose culture is shaped around serving customers will most likely have employees who are more pleasant to interact with, as consumer, as opposed to a company whose culture is shaped around following rules. This is, in a nutshell, why culture also matters for your branding.

But how does this work in practice? How can you set it up and what do you need to do to improve your branding?

The foundation

In core culture is a mixture of individual behaviours and values. These behaviours and values get translated into how people act and the sum of all these actions is what we call culture: how people behave and interact with each other. It seems therefore that culture is pretty much determined and that there is little that you can change. This is partly true; you cannot fully control culture and it sometimes grows organically. However, good behaviours and values can be stimulated and bad behaviours and values can be discouraged. So, you cannot steer culture as much, but you can nudge it in the right direction (Do you want to read more about the power of nudging? Read this article). This means that you can mould your culture towards the desired internal driver which aligns with your external message. For example, the marketing message: “we are service champions” should align with the internal value “being service minded”. Easy right? Wrong. Adjusting culture is hard. It is a time-consuming process and the people involved are often stubborn and hard to convince.

Turning the idea upside down, you can also see how internal culture will affect your marketing message. If you have toxic values within your culture, this will also translate in how your image will be conducted outwards. For example, if rules come first and customers always come second, then your customers will notice this when they interact with the people within your company. So, although culture and marketing seem worlds apart from each other, they are actually closely related and interconnected.

If you still believe that this is all ridiculous, then think back about the thought exercise. Think about how your perception was shaped, who was involved and what they did. You can deduct their actions back to motivations which are shaped by behaviours and values. That is culture.

Getting it right

What happens when your culture is actually aligned with your marketing message? Well when culture and marketing interlock and supplement each other, that is when you utilize culture to its fullest extent. The result is often noticeable in increased customer satisfaction. Depending on your culture, marketing and goals, it can either: drive sales and/or improve service and/or expand operations and much more. Culture can motivate your employees to go above and beyond and to reach goals which seem unachievable. As your employees feel part of something that is bigger than themselves and the message that your brand displays, they can create something bigger than just the sum of their efforts. Does this still sound a bit vague and fuzzy? Forbes has ranked 50 companies with a great culture (read more here). What do we see? In the top 4 there are 3 companies (Microsoft, Zoom & Google) which are extremely successful in their industry. This is, in large respect, thanks to their outstanding culture which motivates their employees in a positive way. Their stimulating culture increases collaboration, customer satisfaction, service, but most importantly: the growth of the company they are working for.  

In conclusion

So where do we stand? Well, firstly it is important to repeat the mantra: culture eats strategy for breakfast. The importance of culture cannot be overstated enough, not only for your internal atmosphere but also for your external brand. HR herein has to play a more central and steering role within a company and not just “that office where they do the administration and stuff”. CEO’s and directors have to be made aware of this as they need to give HR a more central role. You see that this already happened at companies with a thriving culture. Now how to set it up is more difficult to explain, mainly because it is entirely dependent on the situation and environment of your company.

If you want more information on how to unlock the power of culture for your company, then get in touch with us and see what we can do for you!

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