Dan Michelson is the CEO of InCommon and the author of “Holy Shift! Moving Your Company Forward to the Future of Work.”
Say the line “culture eats strategy for breakfast” to any CEO, and they’ll likely tell you they agree. It’s often at the top of the list of universal truths of what it takes to run a successful company. The challenge leaders are now facing is that over the last few years, culture didn’t just eat strategy for breakfast; it ate it for lunch and dinner, too.
Currently, many CEOs and their teams are struggling. There is a crisis of confidence when it comes to company culture. The twists and turns in the workplace have been hard to process as we’ve seen just how far the pendulum can swing. I felt it firsthand.
Shift Happens
In early 2022, I was running a top-tier company in terms of company culture—with Glassdoor employee engagement ratings to prove it. Then, things changed. With job opportunities and big raises just a mouse click away, everything swung to one extreme where employees felt their company was lucky to have them. The workplace became more transactional and transitional. It hit our company hard, but we weren’t alone. Many companies were struggling with identical issues.
I found this moment so confusing and compelling that I teamed up with YPO, the world’s largest CEO association, to conduct research with over 1,600 companies in nearly 100 countries and 50 industries on how they viewed the future of work. The key takeaway was there was a crisis of confidence in company culture.
Fast forward to one year later, in early 2023, and suddenly everything had swung to the other extreme. Major layoffs became the daily headline. Now, people felt lucky to keep their jobs, and employers were in the power position. The culture crisis continued, only now it was attributed to a different cause.
The lesson we’ve learned over time is that any extreme, along with the actions that accompany it, is only temporary. Shift happens. The pendulum will continue to swing and bring us back to somewhere in the middle. With that said, it is clear that going to those extremes took a toll on one thing more than anything: trust.
The existential question for every leader now is how to rebuild that trust. I believe the key for leaders is to come back to the table and make culture central to their overall strategy. With so many companies struggling, this is the perfect time to light up and leverage company culture. It’s the single hardest thing for competitors to copy, and research has shown it directly correlates with what matters most to every leader: employee productivity, engagement and retention. But a comprehensive strategy for culture is exactly what’s missing for most companies.
Turning Culture Into Your Strategy
One of the CEOs’ primary concerns in our research was related to the overall experience and long-term growth of their employees. They were worried their people weren’t getting the experiences they needed or building the relationships necessary to grow. CEOs were confident they could run their companies effectively in the short term, but they were very concerned that the crisis in company culture would significantly impact long-term performance. The initial reaction by many was to focus on one fix: how to bring people “back” to work. But what they’ve now discovered is that relying on a single tactic didn’t work.
While every leader recognizes that culture is mission-critical to their company, most are still stuck using yesterday’s tools and tactics. And they’re falling short in solving today’s new and incredibly complex problems. The bottom line is that culture will continue to eat your strategy—unless you turn it into a strategy. This is the first of five important major mindset shifts that leaders need to make.
Five Mindset Shifts To Make
Mindset is truly a choice and an incredibly important one because if we shift our thinking to embrace this moment as an opportunity to create momentum, our actions will follow. In that spirit, here are five mindset shifts to help move your company forward.
1. Shift from viewing culture as a tactic to a strategy.
The best companies are no longer looking at culture as a set of tactics; they are putting it at the center of the stage in their strategy. They have shifted away from the human resources department owning culture, with leaders as participants, to their leadership team owning culture, with HR as a partner.
2. Pivot from “bring back” to “bring together.”
The approach to bringing people back—and the way it was communicated—created conflict between leaders and their teams. Leaders now need to shift to a more positive, collaborative, long-term strategy to help bring people together.
3. Migrate from macro to micro.
Companies have often approached culture with the expectation that everything an employee will experience can be created and implemented centrally. That time has passed, and there is now a migration from macro to micro, a movement to focus on improving what people actually experience directly on a daily basis—and that includes the circle of people around them. With remote, hybrid and distributed workers, it’s more difficult than ever to strengthen and broaden that circle of connections, but managers can gain insight during one-on-one meetings. Ask employees about the people they interact with, both inside and outside their team, and discuss how they impact their enjoyment of their job and ways you can enhance connections.
4. Move from managing to coaching.
Many have found that the track record of managing with an authority-figure type of approach isn’t great, and it’s becoming increasingly ineffective. The best leaders have moved to a coaching-based approach that is more positive and collaborative, where a coach views the people on their team as working with them, not for them.
5. Evolve from evaluation to conversation.
The traditional approach of how people are evaluated has created a distance between those who lead and the folks on their team. Evaluations have a place, but their use is often misguided and misused. Companies are evolving from occasional evaluations that often lead to confrontation to continuous conversations that drive collaboration.
One of the secrets to creating a company built to last is an obsessive focus on company culture. Given the stress of the last few years and how much is at stake when it comes to their team, there has never been a better time for leaders to come back to the table and truly turn culture into a long-term, sustainable strategy for their company. The other option is to let it continue to eat up your strategy. The choice is yours.
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