Simply put, organizational culture is the collective result of how people on the team think and behave, their shared values and how they react to internal and external stimuli. A company culture is either decisively created and nurtured from the very beginning or - more typically - it develops haphazardly over time through the beliefs and experiences of those on the team.
But when an organization is facing the need for some kind of change to remain competitive, cut costs, develop new products, become more efficient or improve quality, often times the culture is going to have to transform as well. Almost always. Because a new way of doing things requires a new way of thinking, especially from the leaders at all levels.
Leaders must lean on the values of the organization to drive performance, especially during times of change. An organization's values should be the bedrock of why the company exists, how it makes decisions and its true purpose. They must be authentic and relatively specific so they actually resonate with the team.
So what is values-based leadership? Essentially, this just means leading the team and evaluating performance - both your own and the team's - based more so on the organization's set of values rather than specific metrics and milestones. Don't get me wrong, managers still have to oversee their team member's ability to execute and be accountable for their role in mission success, but values-based evaluations can't be an afterthought.
Many organizations will charge ahead for years with relative success while not having ever truly defined - and written down - their mission, vision, values and purpose for existence. At some point however, all great organizations have to define these things if they want to maintain that positive trajectory.
As former Navy SEAL, I can assure you that we have a well-defined mission and culture, but it wasn't until 2005 that the senior leadership team within the Naval Special Warfare community came together to develop what is now the Navy SEAL Ethos. Our guiding statement that defines our culture, who we are, why we exist and what we expect of ourselves and each other.
We were over four years into two different wars and realized that things were changing and changing rapidly. Our "way of doing things" hadn't evolved enough to continue moving at the speed of war. There was no time for complacency nor ambiguous ways of thinking and acting. It was time to define who we are.
Our ethos clearly articulates our values and culture. Everything we do is guided by our ethos. It is a part of us. It always had been really, but once an ethos becomes memorialized on paper, it takes on a whole new meaning. Why? Because it means that senior visionary leaders have come together to ensure alignment on what the organization stands for. What the long term vision is. It guides decision making, recruiting and selection, how we train, how we fight and the overall expectations.
Once an organization's values are clearly defined, they should also be the guiding light for how performance is evaluated - at the team and individual level. This is especially true when organizations are facing change. Usual performance metrics shouldn't be tossed out the window but when new behaviors must be learned, values-based leadership is required. And values-based performance evaluation systems need to be put in place. If the team is being asked to learn new things and adjust to organizational and cultural transformation, their criteria for "great performance" needs to be adjusted. New HR mechanism and performance review systems can be a powerful supporting tool for improving or changing a company culture. If major changes are being made but the team is still measured against old metrics, problems will occur.
Values-based leadership also requires the need for constantly communicating those values at every opportunity possible. In every company meeting, every time a person is publicly recognized and in every coaching moment when mistakes are made.
Values-based recruiting is also imperative for protecting a company culture. This is the cornerstone of the Navy SEAL selection process. Evaluating new candidates purely based on technical ability can backfire in a big way. And it will cost the company two times that person's salary to replace them when things don't work out.
The bottom line is that through values-based leadership, alignment on the company's mission and vision is more likely and helps the details more readily fall into place.