Culture is key 🎯 Wednesday Win

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Many first-time leaders focus on strategy: the whats, the whos, and the whens. But if you want to build successful teams for the long-term, the culture you set and encourage will have far more impact than all of the plans you've made.

Read on: blog.WednesdayWin.com

Read time: 4 minutes

What drives and determines culture? And, most critically, what can you do to improve an unhealthy one? Getting it right from the start is far easier, but don't lose hope if you've inherited a difficult situation. It is possible, but you'll have work to do to get it right.

Earlier in my career, I took several roles over the years where I was hired to make exactly those kind of culture overhauls although they were never described as such. More typically, the view was just that the teams needed new leadership or a fresh approach. The problem wasn't the tools being used or how the product road map was described. Always, at the core, the problem was bad culture. It was driven by command-and-control dictates, lack of innovation, distrust among peers, and avoidance of punishment and for keeping a low profile.

Text: Culture eats strategy for breakfast. - Steven Drucker

I was lucky, I had mentors growing up that taught me ways of leading that naturally supported collaboration and innovation (Scouting and other volunteer-led organizations are especially good at this). Over time though, I've learned there are three main incentives that drive positive workplace culture: financial, social, and moral.

Let's explore each:

1. Financial

The economic incentive is how you compensate and for what. Do you focus on equity and treat employees like fellow owners? Or do you pay per unit of work or customer transaction? How is your pay system encouraging your team to treat customers or one another?

If you desire long-term customer relationships, but you are compensating your team only for the first transaction, you might have trouble.

Or if you create team wide goals that drive up the rewards for collaborating, you'll have different outcomes than if everything is driven by individual contests.

First, understand your overall goals and then construct rewards, bonuses, and overall compensation to match
You may not have control over the entire compensation scheme, but you can still shape your team through promotions, awards, bonus recommendations and other financial rewards
Even where you can't control compensation, pay attention to what kind of behavior it encourages

Cover of The Culture Code: The Secrets of Highly Successful Groups by Daniel Coyle — *The Culture Code: The Secrets of Highly Successful Groups by Daniel Coyle*

2. Social

Social incentives are focused on the kind of reputation you have and the one you strive to achieve.

What is your identity as a leader? Commanding tyrant or servant-leader? What about your organization? Your team? Your products and services?

Especially when you have taken on a troubled team, own up to reputational failures. Acknowledge them and set a clear course of action to improve. Make it clear through your actions and both internal and external messaging what your vision is for your team or organization. Use the tools you have: praise good examples in public and be pointed in private with team members who are missing the mark.

Live up to your own reputation. Don't ask your team to come in early and work late if you won't do it yourself. Show your willingness to take personal responsibility for your team's shortcomings while praising them when success results.

Clearly communicate your reputation expectation and live up to it
Help each team member see how they support that priority mission
Don't ignore past failings, but make a clear break with that past
As a new leader, you only have one opportunity to reset the reputation of your team

Text: Culture is not the most important thing, it's the only thing – Costco's Jim Sinegal — Costco cofounder and former CEO, Jim Sinegal

3. Moral

This final category is often the hardest: what behaviors and actions will be accepted and allowed. This trips up many entrepreneurs who are naturally driven and bold.

Countless fast-growing start-up leaders allow that boldness to spill over into staff abuse or harassment. Output, revenue, sign-ups, or subscriptions or other metrics become the only standard that matters. That's a culture choice, but not a good one.

What kind of environment do you want to be in every day? How do you want to treat your customers, your coworkers, and your vendors?

This is one where your team will be watching your actions much more closely than listening to your words. Live up to the standards you've set even when it means making the hard choices to punish or even fire staff who don't meet the expectations. You must lead with care in this area to create the kind of workplace you want to see.

What is acceptable behavior?
Do you have problems you need to correct?
Your actions matter most
Set a high standard and keep it!

Cover of HBR’s 10 Must Reads on Building a Great Culture — *Harvard Business Review’s 10 Must Reads on Building a Great Culture*

Action Summary

Creating a positive workplace culture is hard, but fixing it later is even tougher.

Leverage the three categories of incentives: economic, reputational, and moral to redirect your team or company culture in the right direction.

Adjust both monetary and non-financial compensation to align with your primary goals
Build both an internal and external reputation of excellence
Set a high standard and then live up to it by your actions and the actions you permit from others

What do you think? What do you use to ensure a great culture in your organization? Reply to this email and let me know.

To your success,

Christopher

P.S. Like this one? You'll probably want to check out this earlier Wednesday Win essay on successfully facing the challenge of leadership, too.

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