If you’re a business leader, you’re accustomed to asking how your organization is going to scale. This might include communication, leadership, systems, culture, or the company as a whole. In 2021, however, you’re probably asking how on earth you’re going to do any of these things with any success.
When leaders talk about scaling—and hiring accordingly—they usually talk about metrics. But placing too much emphasis on numbers and process can make leaders miss one of the most important factors in the healthy growth of an organization: culture. Company culture emerges when the raw materials of a company’s calling encounter the needs of business. Organization, metrics, processes, attention, synchronization, and scale together form the “fruitful land” of an entire company, and define its culture.
Culture is the true measure of organizational health. You can enjoy stellar revenue, minimal costs, and abundant cash flow, but without a strong culture your company won’t sustain its performance. And unless you’re hiring with culture in mind, you risk throwing your people for a loop every time you add someone new.
We wrote this article to help you understand and level up the company culture sustaining your success. Keep pen and paper handy, as we’re going to ask you some intermittent questions, and get you some clarity about yourself and your people. By leveling up your culture, you’ll prepare your company for better hires in 2021, and for long-term, sustainable growth that stays true to your calling.
Are You Growing or Aging?
Before we dig into the specifics of your company culture, it’s important we take a step back and think again about you are in terms of organizational life cycle.
When we look at companies still in their early stages, we often see growth. Products are being developed, markets penetrated, and systems developed to keep up with all the demands of doing business. Companies later in their life cycle may be growing numerically, but a better word to describe their organizational development would be aging. They’re not heading towards newer and better heights; they’re subtly working toward their own demise.
Growth is about vibrancy and energy. Motivated by mission, vision, and purpose, growing companies drive fast and take chances. They’re young, and they haven’t much to lose. So, why not throw caution to the wind in order to accomplish something big?
Aging companies, on the other hand, are like a middle-aged father; they know how hard it was to build what they’ve got, and there’s no way they’re about to put it all on the line. Slow and steady may not win the race, but at least it’ll keep the lights on.
How do you know whether you’re growing or aging? Ichak Adizes points out several of the qualities that make the difference. In a growing company:
- Success means taking risks and not avoiding them.
- Expectations lead results, not the other way around.
- Cash is invested, not stuffed beneath the proverbial mattress.
- Function follows form; form isn’t allowed to dictate function.
- People focus on what and why, not how and who.
- Employees are valued for their contributions above their personalities.
- Everything is permitted, and nothing is forbidden.
- Problems aren’t just hurdles; they’re opportunities.
In an aging company, all of that goes in reverse. Risk avoidance, cash-hoarding, dead formalism, suffocating bureaucracy, office politics, safety, and the status quo are all the hallmarks of a company that has stopped growing and is now just aging.
The same distinction applies to individuals. It’s entirely possible for us to keep aging in terms of calendar years but to stop growing somewhere along the way. The qualities listed above apply just as well to us as our companies: we stop taking risks, we don’t invest in ourselves, we no longer see problems as opportunities to learn and grow, etc.
The first step to scale is to know where we stand individually and organizationally. Are we growing or are we aging? If the latter, what can we do to move toward the former? And who can we bring onboard to help us make that happen?
The More You Know, The More You Grow
Using Adizes’ categories, we’ve designed a simple inventory to see where you are on the aging/growing spectrum. Answer the following questions twice—first for your company and second for yourself.
Rate yourself on a scale from 1 to 5 (1=disagree; 5=agree):
- We/I see risk-taking a necessary part of life and business.
- We/I believe we can achieve what seems impossible.
- We/I are willing to lay our cash on the line for the sake of growth.
- We/I care more about whether it works than what it looks like.
- We/I are more focused on passion than procedure.
- We/I value people for what they offer rather than whether we/I like them.
- Instead of asking “why,” we/I prefer to ask, “why not?”
- We/I embrace problems as opportunities to grow.
If you scored 8 – 16, you’re probably Aging
If you scored 17 – 28, you’re probably Transitioning
If you scored 29 – 40, you’re probably Growing
Now, depending on how you scored, you’re likely going to want to embrace some new habits. Here are what we believe to be the Five most important practices at every stage:
- Network and Collaborate: Create a web of people and work that propels individuals & teams forward
- Be Open-Minded: Open up to differences in thinking, behaving and working
- Nurture Innovation: Develop new & better ways to accomplish goals
- Become a Life-Long Learner: Regularly prioritize learning & growth opportunities
- Become More Self-Aware: Feedback and reflection bring compelling insights for improvement
- Cultivate Resilience: Learn to bounce back amidst change or hardship
- Embrace Ambiguity: Navigate uncertainty & move towards strategic opportunity
- Make Timely, Calculated Decisions: Makes decisions based on appropriate information in timely fashion, for the common good
- Synergize Key Voices: Weigh & harmonize opinions, goals and outcomes of all parties involved
- Resolve Conflict: Facilitate conflict effectively and efficiently
- Empower: Share power; facilitate & encourage self & others to bring & do their best
- Be Vision-Oriented: Craft a clear & compelling picture of the future
- Grasp the Micro and Macro Levels: Think globally; act locally
- Recruit “A” Players. Find highly skilled team members who bring diverse skill sets
- Be Customer-Oriented: Keenly focus on driving customer satisfaction & results
What’s Your Dominant Culture?
Now that we’ve determined the general thrust of your organization, we’ll focus on your dominant culture. While there are often many subcultures to be found in a company, dominant culture frames everything else. Dominant cultures arise from a company’s behavior and reflect its deeply held values.
For more than two decades, organizational theorists have researched and developed the “Competing Values Framework” (CVF). Often touted as one of the most important conceptual tools in the history of business, the CVF has been incredibly useful in helping leaders understand themselves and the organizations they helm:
Drawing on the CVF, we can identify a company’s dominant culture as one of four types:
- Creative – Your company gets things done. Change is the only true constant, and your focus on innovation drives you to keep pushing the envelope.
- Collaborative – Human development drives effectiveness as these cultures put people before results and foster environments where multiple voices contribute.
- Controlling – In these cultures, efficiency is the name of the game. Effectiveness is carefully ensured through consistency and uniformity.
- Competitive – Shipping units, increasing revenue, and dominating the market are a few of the primary goals in a competitive organization.
A company’s culture isn’t its fixed identity. Cultures shift over time depending on the organization’s current stage in life and the demands of its industry or market. In the early days, you may be more creative than you are controlling. As the company grows and efficiency becomes more important to you than disruption, that culture will shift.
The way you lead your company will look different depending on whether your culture can respond to the demands of the moment. During periods of stagnation (e.g., if your company is in the “Retirement” stage of its lifecycle), a controlling-culture will only make it harder to bring in healthy disruption. On the other hand, in periods of high creativity and rapid growth, a healthy dose of control may be what the company needs to keep it from spiraling out of control.
Now, do some discovery work. You can do this exercise on your own, but it works best if you grab 6 senior leaders and a white board. For each of the following 4 questions, have each leader pick the option that best describes your culture, leadership, etc. It’s entirely possible several options would apply but, for now, let’s focus on the answers that stand out ahead of all the others.
- Which of the following best describes your culture?
- “Ad-hoc”-racy: You figure things out as you go.
- Clan: You bind together and work as a collaborative team.
- Hierarchy: Power flows from the top down through well defined channels.
- Market: Employments battle for influence and authority based on performance.
- How would you describe your leadership?
- Innovative and Visionary
- Mentoring and Team Building
- Coordinating and Organizing
- Competitive and Productive
- Which of the following sets of values fit your company best?
- Innovation, Transformation, Disruption
- Dedication, Development, Communication
- Efficiency, Consistency, Uniformity
- Dominance, Achievement, Profitability
- What makes your company most effective?
- Captivating vision and constant change.
- Developing and deploying human resources.
- Predictable, replicable, and efficient processes.
- Aggressive competition for market share and customer loyalty.
Draw x- and y- axes on the white board.
For question #1, ask everyone which option they chose. For every A, place an X in Create. For every B, place an X in Collaborate. For every C, place an X in control. For every D, place an X in Compete. Repeat for questions 3-4.
Stand back and read your plot. Which quadrant has the most X’s? That’s your dominant culture.
- Do you agree or disagree with the results? Why?
- What about these results surprised you? What didn’t?
- How does your dominant culture align with the current needs of your business?
- What kind of culture do you need in order to fulfill your calling? What will it take to move from this culture to that one?
Do You Have a Handle On Your Subculture?
When it comes to company culture, the dominant whole is greater than the sum of its subcultural parts. Innovative companies like Google, to give just one example, can only sustain their creative cultures because there is a controlling subculture in accounting that makes sure funds go where they need to and competitive subculture in sales that brings home the bacon. If your dominant culture were to overrule those subcultures, you’d end up with a flaky accounting department and a flacid sales team.
This dynamic tension is a good thing in healthy organizations. On the one hand, everybody should know who you are and what it means to be a part of your company. On the other hand, those individual pockets of subculture need the freedom to be who they are if your company is going to get what it needs out of them.
Map Your Subculture
Repeat the exercises from step B above, at the departmental level. Plot each department’s culture on the larger CVF plot.
- How do your subcultures stack up against your dominant culture?
- Do you discern your dominant culture exerting more weight on a subculture than it should?
- How can you capitalize on the productive tension between dominant and sub-culture?
Who Are Your People?
In his book, Scaling Up, Verne Harnish offers his own take on the corporate lifecycle. According to Harnish, most companies follow an S-shaped path. They start small like mice. Some scale up quickly like gazelles. Then, if they’re not careful, they turn into slow-moving elephants.
Harnish’s book is focused on gazelle-like growth, which he says is built on 4 foundations: people, strategy, execution, cash. Right now, we want to focus on people. Specifically, how do your people and their contribution to your company culture either accelerate or decelerate growth?
Often, employers look to hire into their culture. They want someone who catches the vision, embraces the office dynamic, and fits in with the team. That makes sense, but it’s also dangerous. If your company has checked into a retirement home, the last thing you want is a crop of employees who agree with that vision.
What leaders need aren’t employees who will mindlessly buy into the corporate culture as it stands. They need contributors who will productively conflict with it. This, too, is dangerous. It takes self-awareness and careful discernment to determine who will productively conflict with the culture vs. who will try to tear it apart from the inside.
Why take that risk? Just as mature companies need prophetic disruption to keep from sliding down the lifecycle toward retirement and death, they also need grassroots disruption. They need people who aren’t afraid to challenge sacred cows and ask hard questions about what elements of our structure need to go and which need to stay.
As with all conflict, this can get messy. The pay-off, though, is a healthier dominant culture fed and maintained by a slate of subcultures where team members are allowed to diverge in ways that ultimately support vision, alignment, and execution rather than undermine it.
Though some leaders view them with suspicion, we’ve found that a solid personality assessment and profile can create a strong common vocabulary amongst teams. You don’t need to take the results as gospel truth to glean great insight from them. In our business and executive coaching, we find the DiSC assessment to be the most helpful and comprehensive, and so that’s what we’ll be referencing in the rest of this article.
For this exercise, have your Senior Leadership and Department Heads all complete a DiSC assessment. Use the plot from Step C above, but map individuals onto it according to their DiSC results.
- Where do you see your results concentrated?
- Do your leaders’ personalities align with your dominant culture?
- How can you leverage those personalities that don’t align to productively conflict with the organization’s dominant culture?
- Based on these data, what cultural needs can you anticipate when it comes to hiring someone new?
What Kind of Leader Do You Need Right Now?
If Marshall Goldsmith taught us anything in his classic What Got You Here Won’t Get You There, leadership is a dynamic reality. Every new stage in your company’s development is going to require a different mode of leadership. You can’t lead a 5-person startup in the same way you’d lead a 500-person organization.
Similarly, you can’t lead an adolescent company the same way you lead a mature company in its prime. This is what connects the company’s life cycle directly to your growth (or lack thereof) as a leader.
The primary question: are you prepared to stop being the leader you’ve always been and start being the leader your company needs right now?
To get at an answer to that question, let’s look again at your personal DiSC results. According to DiSC, leaders gravitate towards eight different styles of leadership. The DiSC assessment itself unpacks this at length, but for now here’s a summary:
- Pioneering (Di, iD) – Pioneers are bold and passionate. They’re best at inspiring action but worst at impulse control.
- Energizing (i) – Energizing leaders give people the energy they need to do their best. Without the right constraints, they can be all over the place.
- Affirming (iS, Si) – An affirming leader is laid back and supportive. They’re great at building morale, but not so good at offering incisive feedback or handling conflict.
- Inclusive (S) – These leaders affirm and accommodate, trying to bring every voice to the table. If they’re not careful, others take advantage of their patience.
- Humble (SC, CS) – Humble leaders are fair and steady, but their consistent focus can easily morph into tunnel vision if they’re not careful.
- Deliberate (C) – Conscientiousness is the deliberate leader’s watchword, but too much analysis can lead to paralysis in the face of urgent decisions.
- Resolute (CD, DC) – Resolute leaders aren’t afraid to go their own way if it means better results, but they can also be unnecessarily negative and critical.
- Commanding (D) – Like a strong general, commanding leaders deploy their people well. If they push too hard, however, the troops lose their morale.
Each style of leadership has its own advantages and disadvantages. The secret to leading your company well isn’t to create a Frankenstein hybrid of all 8 styles (good luck with that). Rather, you need to recognize where your natural tendencies lie and reconcile them with the demands of the moment.
When you take a look at your own DiSC results and plot yourself on the chart, ask yourself:
- If your company is growing, what can you do as a leader to facilitate that growth? If it’s aging, what can you do to disrupt that downward trend?
- How does your leadership style relate to your dominant culture?
- How does your leadership style relate to your subcultures?
- Are there ways you can productively conflict with both to affect change and growth?
- Again, if you’re planning on making new hires, what opportunities for productive conflict can you see when you consider bringing someone new onboard?
We hope you’ve found these questions helpful, and we believe they’re enough to get you started. But you’ve got a lot to think about in 2021. If ever you need additional clarity regarding your leadership and your people, we encourage you to reach out to us at Leadership Reality for a chance to air your plans, talk through your strategy, set aside your worst anxieties and find a new source of hope for the new year.