For decades, business leaders looked to the latest methodology or technology to solve every type of organizational issue--like Six Sigma, Agile, or enterprise resource planning. Mergers and acquisitions were justified by promises of synergy and growth. By implementing these tools or transformational initiatives, you could sit back and watch errors disappear, speed increase, and money roll in.
But statistics tell a different story. Over 90 percent of business executives said their past mergers would have "substantially benefited from greater cultural understanding prior to the merger," reported a McKinsey & Company survey. Forrester Research reported that 70 percent of change management projects fail.
Despite your greatest efforts, what actually happens in your company is determined largely by your company's culture.
Let us first clearly define what "culture" is. Culture is the line a group draws that separates the behaviors they stand for, advocate, and tolerate from the behaviors they will not tolerate. This line is always present and is being drawn and enforced at all times.
Culture is one of the three 'shapers' of behavior. Here is how to shape yours:
1. Get to know potential new hires.
The first and most powerful way walks in the door with each new hire. Human Resources, hiring managers, and interviewers should be able to identify critical attributes that mesh well with the existing culture. Ask probing questions to get to know candidates, not just their skill set. Embedded in all of us is our personal moral compass. It's that little voice inside us that says, "I ought to do this," and, "I ought not to do that." Screening for powerful personal moral compasses is the most cost effective way to ensure peak performance.
2. Organically create your desired culture.
As individuals form groups, the group takes on a collective moral compass that says, "We ought to do this," and "we ought not to do that." This is called culture. Creating a peak performance culture starts with leadership. Leadership should define their desired culture, making clear what behaviors, values, and beliefs they want to see and model them for the organization. Leaders should also be explicit about how the desired behaviors, values, and beliefs will be measured and incentivized.
3. Create culture through hierarchy.
The organization can attempt to control and shape behavior through rules, policies, and laws, which often isn't effective. Mandated culture changes rarely succeed, regardless of the intent of those mandating the change or the legitimacy of their grounds for doing so.
Individuals within organizations experience mandated culture change as forced conformity. It may produce temporary adherence to the "new culture behaviors," but as time passes, people will revert to previous behaviors. In other cases, they will comply superficially, but passively delay actual change and wait for the next round of leadership to show up when the whole process will start over.
Where the first two are intrinsic and enforced by all, rules are extrinsic and enforced through hierarchy.
Culture is vitally important to your organization's performance and your capacity to leverage technology, implement change, or enact plans. What you say your culture is or what you claim to aspire to is of little importance. Recent headlines have been peppered with examples of companies whose intended culture was very different than the actual culture - most notably United Airlines, Wells Fargo, and Uber. What matters is the culture your people are experiencing in this moment.
Go out into your organization later today and actively observe your culture. You will see it. Ask yourself to what degree you are actively shaping it. If it's so vitally important, and it is, are you spending the time and energy to shape it? Do you have a point of view on how to shape a peak performance culture?
The good news is that you are extremely powerful in shaping your organization's culture. Peak performance cultures have common attributes that you can encourage in your organization. For now, notice and experience your current culture.