By Cedar Pruitt, Charlesbank Consulting
Executives often attribute success to people, but, done right, it’s actually the culture that can be a company’s #1 asset. That was evident at athenahealth, a high-tech healthcare company, during my decade there. Then-CEO Jonathan Bush often reminded the employees, as athena took steps toward going public, that the company’s teaching and learning culture was irreplaceable.
It was clear that he and the visionary executive team (including co-founder Todd Park, People powerhouse Amy Pooser, and others) were deeply committed to building a strategic and intentional culture.
But as the company grew from 300 to 4,000 employees and thrived, it became obvious to me that their methods worked. In the years since, as I’ve seen companies struggle to achieve success, I’ve realized just how effective this team was – and why culture needs to be every company’s #1 asset.
Researchers at Columbia Business School* interviewed 1300+ executives in North America and found:
- 91% believe culture is important to their firms
- 79% place culture among the top value drivers of their company
- 54% would walk away from an acquisition target that is a poor cultural fit
- 85% believe an ineffective culture increases the chances that an employee might act unethically or even illegally
- ….and only 16% believe their culture is where it needs to be!
As impossible as it seems at times, there IS a way to change culture. And it comes down to three levers: Goals, Roles and Alignment.
Goals: Does your company have a vision and a mission? Those two statements must be related but differentiated to be effective. Look again at that mission statement. Is it sticky, resonant, and easy for everyone to understand? One sentence is best. Clients often tell me that they have a mission and vision—but NO ONE can remember what they are! Even when I can find them on a wall or webpage, I often quickly spot contradictions, repetition and jargon that cloud the real meaning. These statements must be clear and memorable, or they are NOT effective.
Roles: Does everyone at the company know how their role connects to the vision and mission? At athenahealth, we developed a competency model with clearly defined expectations at every level along with key behaviors so that employees understood how that particular skill, attribute or trait might look and feel in action. The competencies tied directly to the mission and vision.
I’ve since created many such competency models, each one tailored directly to the mission and vision of that company. The competencies must ALSO be sticky, resonant, and easy for everyone to understand.
Pro tip: If your competencies are in a binder, they are going to get lost. They must be concise enough to be pinned up on a bulletin board.
Alignment: Competencies only matter if they remain relevant.
Let’s repeat that: Competencies only matter if they remain relevant.
Too many clients have told me that they went to the effort to create competencies but…they don’t use them. To be effective, the competency model should be tied directly to compensation. The bonus structure for everyone, from executives to entry-level, should rest in large part on the competency model, with 50% of each individual’s cash bonus based on meeting or exceeding their competency expectations. (The other 50% should respond to achievement against business goals.) This practice ensures that the model is part of every major performance feedback conversation.
That’s not, of course, where the alignment ends. The company’s annual and quarterly goals and prioritization process must relate directly to the mission and vision, too.
And alignment must be continually re-assessed.
Edgar Schein, the late MIT professor and brilliant cultural theorist, laid out the structure of company culture in three layers:
1.) Artifacts: The things in an environment that we can feel, touch, taste, smell, and hear (such as people laughing, or not; natural light, or lack of it; etcetera).
2.) Espoused Values: The things that leaders say about what the organization stands for – values, goals and approach.
3.) Underlying Assumptions: The things everyone actually believes about what the organization stands for and how it functions – and these fluctuate all the time.
When alignment between these three elements is off, there is a cultural disconnect that directly impacts the success of the organization.
How do we find out if they align? Simple: Ask! I use a mix of focus groups, workshops and interviews, but there are many approaches to getting the answers…as long as the dialogue is in a trusted space and those in a wide range of roles are part of it.
What do we do if these elements don’t align? Not so simple, but it starts with intentionally uncovering, and then taking a hard look at, the real problem.
This is something we can do together. Contact me to start the conversation.
This conversation requires leadership skills like Building Trust, Adaptability, Dialogue, and more. But now we’re back to competencies.
Remember, every company has a culture, whether it’s intentional or organic – even if it’s two people and a bare light bulb.
Make yours intentional, and it can become your company’s #1 asset.
Rajgopal, Shivaram. “Corporate Culture: Evidence from the Field,”Columbia Business School, 2023
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