Many high-profile companies have been in the news lately. And not for the reasons they hoped. While public companies like Facebook, IPO hopefuls like Uber and 150+ year old financial institutions like Wells Fargo all may look different from the outside, they share a common affliction...lack of Cultural Acuity® ("CA").
Organizational leadership spends countless hours analyzing financial metrics, industry and market data, operational efficiency and human capital strategies. In general, these analyses are performed by highly qualified specialists from different divisions within the organization. But do each of these divisions share the same vision? Do they operate from the same base values? And most importantly, do employees know what is expected from them and what behaviors that will bring them the greatest individual reward and make them feel like valued members of the team?
My guess is no....and the answer in simplest terms is because they lack CA. CA is not only the first step in understanding the "ethos" of your organization, but arguably the most important. CA is a top-down acknowledgment of the important role organizational culture plays in efficiency, effectiveness and ethics (e3®). CA is achieved by building all three of these central management systems on a foundation of values. Unfortunately, organizations don't often take the time to look at culture when things are going well. When leadership is faced with challenges that don't appear to be coming from the competitive landscape, they place a laser-focus on culture.
Let's use Uber as an example. Over the last 18 months, Uber has been in the news for all the wrong reasons. The organization has been rocked by scandal after scandal, all of which stem directly from its internal company culture. Accusations of sexual harassment, sexism and a hostile workplace were brought to light by an essay from former engineer Susan Fowler. This was followed by the exit of key executives (including Kalanick, CEO) and lawsuits claiming stolen intellectual property. The culture was described by many as a win at all costs environment focused solely on growth. From a cultural perspective, that means that the organizations focus was almost exclusively external; paying little mind about what was going on internally and about how the company was meeting or exceeding outrageous growth metrics...not until it was apparent there was a serious problem.
But do cultural issues like these really affect the core business and profit? YES! Let's stay with Uber for a bit longer. Uber was the first on the scene and has a substantial market share. Recode has shown that, including Uber Eats, Uber has had a 91% market share since 2014. Since the laundry list of scandals, Recode shows Uber's market share dropping to 74%. Lyft has benefited the most from these culture catastrophes by more than doubling its market share to 24%. This has also affected the ride-share race to an IPO. Rumors abound that Lyft may file before Uber has the chance to resolve its many internal culture issues and fill vital talent vacancies critically important to its valuation.
So what can be done to avert issues like the ones at Uber. The answer, build CA. Insight is critical understanding and managing these complicated operational issues. Organizations need to question EVERYTHING, not just the things that are not working. Yes this sounds onerous but let me give you some helpful ways to start managing this process:
- Start with success: Take some time to perform a "post-mortem" on all your projects, good and bad, in order to fully understand what is driving success. A little focused dissection will go a long way in creating a song system for success.
- Values, Values, Values: Take some time to revisit your value statement and how these have contributed to your organization's success. Use these values as a "litmus test" to make sure that projects, policies and procedure support these values.
- Get some feedback: Start making some time during your leadership/management meetings for an open discussion about "the state of YOUR union." Success, failure, unknowns...the more you learn the and the earlier you learn about any of these will only make things easier. And encourage your leadership/management team to do with with their teams as well. Creating an honest feedback loop provides realtime, unfiltered and actionable data that will improve your operational effectiveness.
The real issue is that before you can manage company culture, you have to gain some insight and embrace the the pivital role culture plays in your organization. If you want some help in your culture exploration, come visit your thought partner at Equil Consulting.