Your Most Important Competitive Advantage? Culture.

Culture is a business issue. It drives everything that happens in your organizations, for better or worse. Why don’t leaders make culture a priority? They don’t know how.

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S. Chris EdmondsS. Chris Edmonds

How healthy is your organizational culture? Do leaders and team members treat each other with trust, respect and dignity in every interaction? Are suppliers and customers treated with that same care?

If you’re like most manufacturing organizations, there are pockets of excellence — culture health wise — in your facilities that are surrounded by acres of mediocrity.

Gallup’s daily engagement data shows that only 33 percent of U.S. workers are actively engaged at work. TinyHR’s 2014 employee engagement and organizational culture report found that only 21 percent of employees feel strongly valued at work — and 64 percent of employees feel their company does not have a strong, healthy work culture.

Deloitte’s 2016 Global Human Capital Trends report found that “few factors contribute more to business success than culture.” Their research indicates that 87 percent of business leaders believe that culture is a potential competitive advantage. 54 percent believe culture is very important — nine percentage points higher than their 2015 study.

Culture is a business issue. It drives everything that happens in your organizations, for better or worse. Why don’t leaders make culture a priority? They don’t know how. They’ve never been asked to manage culture. Deloitte’s study found that only 28 percent of respondents believe they understand their current culture well. Only 19 percent believe they have the “right” culture!

The reality, though, is that leaders spend more time on processes and results than they do on their work culture, yet culture drives everything that happens in their organization, good or bad.

Why haven't leaders paid attention to culture? They’ve never been asked to do that. If they did dig in and discover issues — which most organizational cultures have — they wouldn’t know what to do to fix those issues. They’ve never been taught how.

The answer isn’t complicated; it’s actually simple. The pathway to a purposeful, positive, productive work culture is to make values — how people treat each other — as important as results.

The methodology? We’ll get to that in a moment.

Though the answer is simple, creating the foundation of a healthy work culture — then maintaining it every day — is a lot of work. The payoff is stunning - and worth the effort.

My culture clients have, after implementing a proven process, enjoyed 40 percent gains in employee engagement . . . 40 percent gains in customer service . . . and 35 percent gains in results and profits, all within 18 months of intentional culture refinement.

What would you do for 35 percent better results? If you’re willing to make values as important as results in your plant or organization, consider these three steps.

First, leaders must define their desired culture. Second, they must align all plans, decisions and actions to that desired culture. Third, over time, they’ll refine their desired culture as it evolves, matures and grows.

Leaders define their desired culture through an organizational constitution. An organizational constitution is a formal document that specifies four things: the organization’s servant purpose, its values and behaviors, its strategies and its goals.

Most organizations have some form of strategies and goals in place. Accountability may be inconsistent, but they usually have specific performance strategies and defined goals. Those may require some tweaking — but there is solid content there.

Most organizations don’t have a formalized, present day “reason for being” beyond making money. Yes, making money — creating revenues beyond budgeted nets — is a great thing. Revenues and profits allow the organization to sustain itself.

The problem is that “making money” isn’t meaningful or inspiring to 99 percent of your workforce. Profits are a good thing, but they’re not an inspiring thing.

A servant purpose formalizes what your organization does, for whom, and to what end besides making money. An effective servant purpose clearly describes how your product or service improves your customers’ quality of life.

Here’s an example. A catalog printing plant dug in and formalized this servant purpose: “We create marketing solutions that help our customers serve their customers and enjoy business success.” This statement shifted the focus from “making money” or “printing catalogs” to helping their customers succeed. That is a meaningful daily ‘reason for being.’

Values are the principles that will ensure everyone is treated with trust, respect, and dignity in every interaction across your business. To make values as important as results, those values must be observable, tangible and measurable — just like your performance metrics are.

Your organization may already have values defined. Very few organizations take the steps required to clearly define values in behavioral terms — then hold everyone accountable for those behaviors, every day.

Let’s take the “integrity” value, which is a very popular value for my culture clients. If you asked 10 people in your organization what “integrity” means, you’ll get at least 5 different answers (maybe 10). Defining values in behavioral terms means there is no question about how people are expected to behave.

One client recently defined their three valued behaviors for integrity with these statements:

  • I align my actions with our values.
  • I am honest and do what I say I will do.
  • I take responsibility for my actions and I learn from my mistakes.

When values are defined is such clear terms, players are much more likely to demonstrate those behaviors.

The trick? Leaders — throughout the organization — must model the values and behaviors first. Only when leaders are acting in alignment with your desired culture — with your organizational constitution — will the effort gain credibility and momentum.

Don’t leave your culture to chance. Be intentional with an organizational constitution.

S. Chris Edmonds is a speaker, author, executive consultant and founder of The Purposeful Culture Group

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