A Healthy Company Culture Starts at the Top

“Every company has a culture and that culture is a direct reflection of the leader,” says Vistage speaker Jim Blackburn , head of A. James Fifth & Company in Chapel Hill, N.C.

The problem is that most company cultures are unhealthy and dysfunctional.

“One glaring symptom of an unhealthy culture is a tendency to find silos — where various departments compete and compare with each other, rather than work together. When things go wrong, you have managers blaming each other (‘If it wasn’t for shipping, the project could have been done in time’), resulting in an ‘us vs. them’ mentality. Blame is code for ‘I’m not responsible.'”

The reluctance to take responsibility comes from a fear of failure or not being good enough. In a fear-based environment, employees shy away from taking responsibility, since if something isn’t working, they feel the consequences could be severe.

“Fear, as a motivator, works well in a crisis,” Blackburn observes. “But as part of a long-term growth strategy, you’ll burn your people out very fast and the best, most talented, people will leave quickly.”

The relationship product

An unhealthy culture is one of the largest contributors to high employee turnover rates — leading to lower productivity, angry customers and ultimately, decreased revenues and cash flow issues.

“Keep in mind that the product or service you’re selling can be duplicated elsewhere. What’s different is therelationship product you have to offer — that is, the feeling customers have when they walk out the door. That can only be created by the people who work for you.”

What’s more, Blackburn adds, you can’t simply go in to work one day and declare, “This is how you have to behave from now on.” A healthy culture can’t be “legislated,” it has to start at the top.

Avoid “hot behavior”

Ask yourself this question: How do your employees feel when they leave at the end of the work day? Do you want them to feel valued and cared about, that they’re part of something exciting? If so, then why do so many leave feeling devalued and demeaned?

“When I ask chief executives these questions, they often look blank, with no idea of what I’m talking about. Sadly, many business leaders don’t have answers. But only the leader can fix what’s not working.”

Another important question for the leader is: How do you react when you’re disappointed or under pressure?

“Many leaders throw hissy fits,” Blackburn says. “What message does that send to people who come to you with disappointing news? Now you’ve set up a culture of tell-him-only-what-he-wants-to-hear, which prolongs the problem until it becomes a full-blown crisis.”

If you exhibit what Blackburn calls “hot behavior” — being hostile, blaming others — it only prevents effectiveness going forward, both for the leader and others involved.

The CEO needs to be “centered” — clear, self-aware, accepting, having faith and a distinct view of the future.

 Beyond the “arrival mind-set”

In the cycle of business growth, many leaders adopt what Blackburn calls “arrival mind-set,” after their company reaches a certain pinnacle of success.

“The first sign of arrival mind-set is when a leader thinks, ‘This is the job I’ve always wanted.’ Now it’s you against the world, everyone around you is a threat. Instead of planning to take the business to the next level, your focus is strictly on survival.”

That kind of thinking — and that kind of individual — “isn’t a lot of fun to be around.”

When Blackburn asks leaders, “Where are you and your company going?” a common answer is: “We’re going to get bigger.” Wrong! “That’s just a measurement. You have to discover the difference between what you do and how you go about it.”

So what should a leader concentrate on?

“The focus should be on the future and developing a highly interdependent mind-set.”

Open-door policies — with a focus on the person, not the problem — and a willingness to see and hear different perspectives are the signs of a healthy culture (and leader). Being an effective leader means being able to change how you solve problems. Take the information you have, process it through your belief system and make a decision. Then watch as the decision is played out and see if it’s working. If not, you change.

In an unhealthy culture, the leader defends to the end his original decision as the right one — because he made it. If something goes wrong, the response is: “It’s not me, it’s not the decision, it’s them.”

In a healthy culture, people take responsibility for making decisions because they have no fear of being ambushed.

 Clarify the definition of “success.”

What does success mean in your organization? What is success for the people who work for you?

If the answers are promotion and power, you’ll end up getting more silos. Instead, if it’s about impact and influence, success becomes more about how you’re feeling — wanting to be included, valued, etc. Effective leadership creates an environment where people are safe to express themselves without being “wrong,” where individuals are creative, decisive and adaptable.

Be aware of “blockers to growth.”

Blockers include perfection, righteousness, self-pity, casting blame. A leader has to recognize these tendencies and learn not to practice them.

“A healthy corporate culture results in people feeling energy and optimism around their work and a sense of complete job satisfaction,” Blackburn says. “There’s collaboration instead of competition, growth instead of merely surviving, a focus on growing people instead of only growing the business. These are the true signs of the impact of an effective leader.”

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