3 Steps for Building a Company Culture of Performance

Your organizational culture tells a story about what your company stands for, how the leadership is perceived and what your employees believe to be true. Does your culture paint an accurate picture of your company? Is it a culture of performance?

How culture can impact your company’s bottom line?

Up to 50 percent of profit variances can be attributed to some having more effective cultures than others, says Harvard Business School Professor Emeritus James L. Heskett. This is because culture affects who is hired as well as how productive and loyal they are. Creating a successful culture doesn't happen by accident, it’s a deliberate collection of decisions and actions. Here are three steps to help you develop a company culture of performance.


Step 1: Identify core values

First identify, develop and document core values by answering these questions:

  • What’s most important to the company and why?
  • What is the desired internal environment the company wants to create for employees?
  • What is the company trying to portray to customers?
  • How will the core values support the company’s vision and purpose?

The answers to these questions help create a list of possible core values.

Take Google and GE. Google runs a highly successful operation built on a core value that “depends on constant development and innovation,” Jason Wingard of the Huffington Post reports. How? "Employees are encouraged to avoid processes, invest their time in 'moonshot' projects and continuously work together to always improve the product." GE’s former CEO Jack Welch fostered a culture based on agility that is still in practice today. GE believes customers ultimately decide the company’s success, requiring its employees to “... stay lean to go fast, learn and adapt to win, empower and inspire each other and deliver results in an uncertain world,” Wingard writes. To demonstrate this, GE is constantly re-engineering its business portfolios and operating model.

This crucial step of identifying core values will shadow all future decisions and subsequent actions. It’s also important to determine how this step fits within the overall strategy and vision of the company. In Google’s case, the vision “to provide access to the world’s information in one click” is supported by the core value of constant development and innovation. It has resulted in continual improvements to web page crawling, global accessibility and Google’s easy one-click search engine navigation.

Step 2: Develop a plan and implement it

Come up with an actionable plan to implement, infuse and communicate your core values in all of your business’ initiatives and interactions. Ensure the plan and adherence to your core values can be continually and easily monitored, tracked and measured. For instance, if your goal is to have your company’s culture centered around innovation, you can both support and drive a culture of innovation as well as create a measurable goal for innovation. Here's how:

  • Identify what innovation looks like in your company and how you would measure if it was happening. You may come up with a KPI like new ideas submitted or new improvements implemented.
  • Identify methods, behaviors, mechanisms and people to lead innovation. Create a positive internal environment that encourages and recognizes employees that are dreamers and innovators.
  • Put all relevant identified items into action. Your organization can gather innovative ideas periodically, evaluate them and, if in alignment with strategy, choose to implement them in a timely manner.
  • Regularly communicate the innovation plan and goals, and how they will be measured. Innovation should be a consistent theme throughout all written, verbal and visual communications. Your performance management system should include opportunities for employees to regularly share and discuss how they are contributing to innovation.
  • Continually reinforce innovation through on-going training and education, internal processes, company policies and procedures, communications, meetings, use of technology and any other means. You can invest in your people by establishing mentoring programs, offering internal training or paying for certifications to increase individual value.

As most employees use computers, software and other tools in their daily jobs, the opportunity to reinforce culture, strengthen core values and improve performance is presented. You can do this by using individual employee dashboards for displaying and communicating how you are performing on your goals as well as how you are living the company vision, mission, core values or other relevant alignment tools that are used to drive behavior.


Step 3: Track and measure what’s important

Determine and use KPIs that accurately measure results at all levels. To determine which KPIs to use, it’s important to know what the objective is and then decide the type of KPI needed based on what is being measured (eg., financial, customer, operational, marketing or employee performance).

For KPIs to be used effectively, they need to be associated with a goal that is, measurable, realistic and timely. Some KPIs measure the result and are called “Lag Indicators” while others measure the activities that drive the result called “Lead Indicators”. For example, if a salesperson has a goal of selling $1 Million by the end of the year, then the KPI of sales is a good lag indicator to measure how sales are to plan. However, if your sales cycle takes 6 months then you should also measure and manage to lead indicators such as how many meetings you had, how many prospects you call each week, or the value of all sales that are currently in your sales pipeline.

If you want to drive a performance culture, it's important to remember to assign goals to employees that are measurable. If they are not measurable and there is no clear understanding of what winning looks like for that goal, then you are wasting your time because you cannot effectively manage to generalities. If you consider the impact a high-performance culture has had on an organization like ANZ Bank, the improvements are nothing less than incredible. For over a decade, ANZ Bank had made deliberate efforts to "recast their culture," and the results were staggering:

  • 60 percent increase in employees understanding and buying into the culture.
  • 30 percent increase in productivity levels.
  • 90 percent increase in revenue per employee.
  • 30 percent (approx.) increase in openness and honesty” and a “can-do” culture.

Other companies like Able Aerospace Services have also successfully connected their employee’s efforts back to core values and strategic goals.  As a result, Able improved its gross margin by 150% by focusing on the most important outcomes.

If an organization's brand is its culture, then its culture is also its brand and needs to be front and center as often and in as many places as possible. Building a culture of performance may take time, but is well worth the effort and resources needed to develop the desired brand your business needs for a sustainable competitive advantage.

ROI of An Intentional Culture

This entry was posted in Insights, Leadership