PUBLISHED ARTICLES

Cultured Pearl: After a quarter century, we discovered the perfect gem: a firm that lives and breathes a culture of success, surpassing every measurable benchmark.

Leader's Edge, March 2008

Fast Focus

• Companies can reap long-term rewards when they engrave a core culture into their bedrock.
• To be more than a trendy exercise, a company's culture must translate into specific actions that influence events in the company, the industry and the marketplace.

It has been said that the only thing we take to our grave is our reputation. Money, success, these sorts of things must be left behind. But in the minds of our former associates, friends and family, how we're remembered is the defining element of our lives, and we can only hope our reputation is recalled in terms of our values, our beliefs and our integrity.

The same principle holds true for a company, but substitute the term "culture" for reputation. A company might make a ton of money and make a number of people rich, but it won't be discussed outside Wall Street or considered by potential customers in terms of its moneymaking ability. Rather, how people relate to a company is by its values. And, just as with a single human, the way values are expressed is in the way a person (or a company) lives. The everyday actions and activities performed, and interpersonal relationships created, are what define the entity.

Think for a moment about the best old-school and next-generation companies: Hewlett-Packard, IBM, GE, Microsoft, Google. Consider the way they engendered a culture that brought them to the top of their industries by living every day the values that support their reputations. That type of work takes discipline and focus, but it is within the reach of every organization.

The most important ingredient that triggers all of the steps to improve your business is your firm's culture. What is "culture," why is it so critical to success and how can a leader build and keep a culture?

What Is Culture?

"People's behavior follows their strongly held values," says my favorite strategic planning author, C. Davis Fogg, in his best-selling book Team-Based Strategic Planning (AMACOM 1999). "An organization's behavior follows, more or less, its shared values. Culture is the sum of the organization's values."

He explains that a strong culture is an effective "gating mechanism" because it engenders cultural norms that serve to guide individual behavior without supervision. He goes on to say that, if company culture and behaviors are aligned with its competitive strategies, "high performance will result."

"Values can be taught, changed, reinforced and rewarded," he says. Values are also useful in identifying and removing employees who aren't playing by those rules. With good "value penetration," he says, strategic change will happen much faster than with a "business-as-usual" culture.

Sounds great, but get real, you might say. Most brokers have seen plenty of companies, and perhaps been in situations themselves, where attempts were made to embrace culture with varying degrees of success. So it must be admitted that developing a core culture does not, in and of itself, guarantee success. A range of individual variations in beliefs and values exists, and two companies that embrace a corporate culture—perhaps even a similar style—might do so with varying degrees of success.

Why are some companies fundamentally much better than others? The reason is some engrave the culture into the very bedrock upon which the company is built. Other firms treat value-setting and culture-creation as trendy exercises that end with the CEO espousing the mission, vision and values at the annual meeting. When I cite culture as the differentiator between a good company and a great company, I am talking about the actions that convert a stated culture into specific actions that influence events in the company, the industry and the marketplace.

Simple As ABC

I could go on about management theory and other MBA BS, but it's more effective to learn from a great company how its culture made it great. So here's a real-life story.

I've been consulting nearly 25 years and worked with hundreds of companies. Often, I have seen ways that I could help them become better. But in the last 18 months, I've worked with an employee benefits firm that I found I could not make better. I believe I've helped this agency, but making it better was not on my task list simply because it is by far the best—public or private, large or small—that I have ever come across.

In fact, I'll include my first 13 years in the public accounting arena and say this is the best company with which I have ever had the privilege of working. Why? After much deliberation and extremely detailed scrutiny, I have concluded that it's the pervasion of culture and how it is enacted that sets them apart. Its culture defines not only the work of its leader, but the efforts of every employee and the interactions with every client and vendor. It's simply evident at every stage.

Here, in its own words, is how the firm defines itself:

"…An intentionally designed, aligned, high-performance, organizational culture driven for success. At the cornerstone…is its unique company culture—the shared beliefs, attitudes and values that characterize its people. It is a culture based on the relentless pursuit of excellence in everything the agency does…Nothing is left to chance…

"The 'intentionality' of the culture begins with the clear communication of behavioral expectations. It is further supported by a rigorous hiring process that selects only certain types of people. The culture is then taught through an extensive, award-winning 'integration' program for new hires. Finally, the culture is reinforced through the daily teaching and coaching of leadership."

The clearest embodiment of this culture is found in the company's fundamentals—a list of 30 values and behaviors that are taught to all employees. The company is so committed to these that it surveys all customers annually to check on the degree of consistency between the stated values and the behavior the customers say they observe.

Another key to the culture is the practice of "open book management." The firm teaches all employees about its finances, shares and reviews monthly financial statements with all staff, and then distributes a portion of the profits to all employees. This transparency helps employees understand their contribution to organizational success and keeps everyone working together toward common goals.

Effective communication is key to any aligned culture. My client teaches and practices a series of communication tools known as "The Collaborative Way" that creates the environment and the skill set for people to communicate in powerful ways, enhancing organizational speed and agility.

Here, straight from its playbook, is the company's list of fundamental values, habits and practices that are the building blocks upon which its culture stands:

The Fundamentals: Keys to Our Collective Success

We must never lose sight of the fundamentals. Success does not come from fancy business buzzwords or the latest management fads. Success comes from an unwavering daily commitment to getting the basics right. These basics are:

• A sound business strategy
• Fanaticism around culture, values and principles
• Rigorous attention to detail and execution.

CORE VALUES—
These values have been a cornerstone of our success for more than 20 years.

1. Do what's best for the client. In all situations, act in the best interests of our client, even if it's to our own detriment. Our reputation for integrity is one of our greatest assets.
2. Check the ego at the door. Our own egos and personal agendas must never take precedence over doing what's best for the team. Being concerned with who gets credit, who looks good and who looks bad is counterproductive. Making the best decision for the good of the enterprise must always be paramount.
3. Practice A+ness as a way of life. Regard everything you touch as a personal statement bearing your signature. Take pride in the quality of what you produce, for excellence matters as a deeply personal value in and of itself, well beyond the probable business result of such excellence.
4. Take the extra time to do things right the first time. Don't take short-cuts. The goal is to get things "right," not simply to get things "done."
5. Seek to create win-win solutions. Learn to think from others' perspectives. Discover what others need and find solutions that meet their needs while still fulfilling our own. Win-win solutions are always longer lasting and more satisfying than win-lose solutions.
6. Practice blameless problem solving. Treat mistakes as learning opportunities. Focus on the following questions: What are our best options to solve the problem? What have we learned that can help keep us from repeating the mistake? How will we integrate that learning into new behaviors or practices?
7. Make decisions that reflect a reverence for long-term relationships. Our primary goal is the long-term success of the enterprise. We must view all of our decisions and actions from this light.
8. Maintain a solution orientation rather than a problem orientation. Focusing on problems drains energy. Apply your creativity, spirit and enthusiasm toward the development of solutions.
9. Work with the assumption that people are good, fair and honest. Kindness begets more kindness. Trust begets more trust. We believe that most people genuinely want to do the right thing. Act out of this belief.
10. Keep things fun. The world has much larger problems than our own. Keep perspective. Be light-hearted and smile.

FOCUS ON SERVICE—
These habits help create extraordinary service experiences.

11. Create a feeling of warmth and friendliness in every client interaction. Every time you touch a client you're on stage. This includes calls, visits, voicemail, letters, e-mails and other communications. Make dealing with you an extraordinary and memorable experience.
12. Practice the "Human Touch." Treat people as individuals and show them you care. Look for opportunities to acknowledge their uniqueness and their humanness (calls, cards, notes, gifts, etc.).
13. Communicate to be understood. Know your audience. Write and speak in a way that they can understand. Use the simplest possible explanations.
14. Set and ask for expectations. We judge situations not by what happens, but by how they compare to what we expected to happen. Learn to create mutually understood expectations in every situation.
15. Make voicemail a valuable tool. Your voicemail greeting is an important opportunity to set expectations and create a mood. Update voicemail daily and create a warm, friendly style that makes callers want to speak with you.
16. Follow-up everything. Internal and external clients rely on us and we rely on others. Record a follow-up date for every action and take responsibility for its completion.
17. Be punctual. Be on time for all appointments, phone calls, meetings and promises. How you relate to time sends a message about how you relate to other commitments. Punctuality is a reflection of respect for others.

THE COLLABORATIVE WAY—
These practices enable us to work powerfully together as a team.

18. Listen generously. Learn to listen without prejudice to exactly what is being said as opposed to listening from our own assessments, opinions and judgments.
19. Speak straight. Speak honestly in a way that forwards what we are up to. Make clear and direct requests. Be willing to surface ideas or take positions that may result in conflict when it's necessary to reach our objectives.
20. Be for each other. Support each other's success. Operate from the point of view that we're all in this together and that any one of us cannot win at the expense of someone else or the enterprise. Look for each other's greatness and provide rigorous support when needed.
21. Honor commitments. Do what you say you're going to do when you say you're going to do it. If a commitment cannot be fulfilled, notify others early and agree upon a new commitment to be honored.
22. Be a source for acknowledgement and appreciation. Positive feedback is a tremendous energy source. Regularly give, receive and ask for meaningful appreciation and acknowledgement.

PERSONAL EFFECTIVENESS—
These behaviors help us achieve greater personal, and by extension, organizational success.

23. Take responsibility. Don't be a "victim." Ask for what you need and take full responsibility for your success.
24. Appearance counts. Your personal appearance makes a strong statement about the pride you take in your performance. Dress neatly and professionally. The appearance of our office makes a similar statement about the quality of our work. Take responsibility to see that our office environment is clean, neat and professional.
25. Being organized makes a difference. Maintain a clean and orderly work area. Use an effective task management system to keep track of outstanding issues and responsibilities. Maintain an orderly filing system.
26. Double-check all work. Proofread all letters, e-mails, spreadsheets, etc. for accuracy and correctness. Accuracy is a reflection of A+ness.
27. Look ahead and anticipate. Be better prepared by anticipating future needs and addressing them today. Avoid the mistakes that come with last minute actions.
28. Have a bias for structure and rebar. Look to create systems and processes that support our ability to perform with consistency.
29. The quality of your answers is directly related to the quality of your questions. Learn to ask yourself, "What information is missing, that if I knew this, the best course of action would become self-evident?"
30. Be quick to ask and slow to judge. Learn to gather the facts before making judgments. Be curious about additional information that may yield a more complete picture.

When reviewing this list, what is amazing to me is the simplicity of any one of these items. While many of these rules might require training and practice, none of them is beyond reach of individuals at any level of the organization. Just imagine the power of all company employees seeking ways to enact these guidelines at every opportunity. That is what I saw in this agency that makes it a benchmark for all others. But the company has taken it beyond the realm of possibility.

Here are some examples of what culture has done for the firm:

• Consistent, high-quality work
• Enormous satisfaction results from clients (measured annually via surveys)
• Higher retention rates than the best of the best in the industry
• Ability to recruit top talent (How many agencies can say their producers all average $300,000 to $500,000 in new business each year?)
• Minimal staff turnover
• Organizational speed and agility
• Last but not least, the highest organic growth rates related to revenue and profits in the industry over the past 10 years.

Those results have made me a believer. Assess your own organizational culture and see how many commonsense fundamentals define your firm. Then consider how, perhaps through small steps and continual effort, you can create a culture that can begin to approach the achievements of this industry leader.