I started at Amdahl, an information technology company that specialized in IBM mainframe-compatible computer products. While I was there, the CEO left. The result was devastating. He’d focused on product research and development and having the sharpest possible sales organization. Customer satisfaction was a priority. It was a fantastic management team with a culture based on trust: we worked with great people, we were all proud of our superior products, and everybody was happy. By contrast, the new management team micromanaged and used a centralized decision-making process for setting sales priorities, pricing and reporting. It was devastating to see such a wonderful company crumble in such a short period of time. People left the sinking ship faster than I’d thought possible.
I left and joined 7N, an agency for high-end IT specialists that had been founded in 1965. When I arrived, it was my turn to lay out the strategy and culture of the company. I wanted to build the most wonderful company – one that anyone would want to work for. My company was going to focus on quality, and be staffed with people who trusted each other and who management in turn trusted. I stressed freedom and responsibility and I allowed decisions to be made at the local level.
To facilitate local authority and responsibility, I decided to apply “frame management.” By that I mean that I use descriptive job titles and leave it at that — no detailed job description is provided. Since we only hire people with ten years or more of practical experience and who have extraordinary references, I don’t have to tell them how to do their job. By leaving them alone to do their job, I force them to focus on the task at hand and on the people they serve.
To have our people work in the same direction, we put a strong vision in place: 7N is to be the best agent for high-end IT freelance specialists. Our customers are the largest enterprises and complex systems development is the main area of focus.
Our vision and values attracted people who connected with the kind of company we wanted to build. We built a strong and motivating culture in which individuals could take ownership and act strongly and locally in an autonomous way: they are swift, quality-oriented and have a strong focus on happy customers and freelancers. It has worked. We are the largest group of high-end IT specialists in the world, and we have never lost a dollar on a customer in 20 years.
Culture is inherently difficult to measure, as it is often considered an intangible phenomenon, like a spirit lurking within the walls, but many scholars and business professionals have created tools for assessing and measuring it. These include the Denison Organizational Culture Surveys (DOCS), the HBS Culture Profile and Vega Factors Total Motivation (TOMO).
Common to all of these is that rather than seeking to define the specific culture itself, they all look to its derived effects. In this way, some standardized measures of culture can be identified, and can then be analyzed according to performance impact. Two important patterns have emerged: cultural alignment accelerates positive culture, and positive cultures improve performance. Cultural alignment as measured by the share of employees and departments that have the same overall purpose is a great indicator of overall performance because it correlates with levels of employee engagement and customer orientation.
In Nucleon, I examine six empirically proven cultural performance indicators:
- Play – the feeling of having fun doing your job
- Purpose – when your work contributes towards something meaningful to you
- Potential – when the job is an active asset towards achieving your goals
- Emotional Pressure – when emotions are forcing you to work
- Economic Pressure – when you work solely for financial reasons
- Inertia – when there is no good reason why you work
These six drivers not only describe core motivational factors, but also the underlying performance cycle. Altogether these cultural assets have been shown to account for 17% of performance.
I don’t want to prescribe strict tenets about forming a specific company culture. You have your own company and you can build whatever culture you want. But if you don’t build a compatible culture that introduces agility, trust and participation, you will not get strong, purpose-driven employees who outperform your competition over the long run.
Photo by Dan Hadfield on Unsplash