The winners—the organizations that make good money and get on the “Best Places to Work” lists—they know what culture is and actively work it. More now than in recent years, culture is widely acknowledged as one of the most significant factors in an organization’s success and sustainability. Lou Gerstner, Jr., former IBM CEO said, “I came to see, in my time at IBM, that culture isn’t just one aspect of the game, it is the game.”
Culture is the pattern of responses discovered, invented or developed during a group of people’s history of handling problems and embracing opportunities. We’re talking business culture here not culture like the ballet. Culture attracts the right talent and brings the right customers to the organization.
If you serve on a board of directors, this blog is your crash course in culture. Before getting to super useful information, let’s make sure we are not assuming you know the following by heart and actually live it with every breath you take:
Most quotes, books and articles about how to have a great culture focus squarely on the CEO’s role. To a point, this is appropriate. The CEO is the leader of the staff team and his or her behavior has a huge impact. Why oh why, we have to rant, is there rarely any mention of the role of the board of directors in culture? We are Vicki Hawarden and Georgia Patrick and we have put in some hard time for 30 years with hundreds of boards of directors. We think this is a major oversight, given that the board is ultimately the boss’s boss and sets the tone for not only the CEO but for the entire organization.
So, how are boards doing in regards to culture? Well, if you’re on a board, this story may sound familiar. You meet maybe four times a year and before every meeting you get a big book of important stuff to review, which you dutifully do. At the meeting, the staff and CEO present more important stuff and you and your fellow board members vote “yea” or “nay” on all these staff ideas. You ask some good, insightful questions about the financial reports and some other key performance indicators. Then you go home a day later satisfied you’ve done your job.
First question on our pop quiz for the culture crash course: Did this board really make a difference? Did it do anything to advance the company’s culture? Did it ever see any information to help it understand what the culture even is?
If this sounds like your board, you aren’t alone. We’ve worked with boards for 30 years and many of them felt they weren’t truly making a difference. This is aweful. It makes our stomachs hurt. This is an unfortunate state of affairs, because board work matters…a lot.
John Battelle, a founder of NewCo, recently suggested in an article that we need new solutions to our systemic crises and adds, “These solutions won’t come from some magical, top-down governmental edict. They’ll come instead from hundreds of thousands of decisions taken, one by one, in board rooms around the world.” To refresh your knowledge on that point, look at our earlier blog, Boards Have the Ultimate Power to Win, Change the Game or Corrupt.
Especially if you are a board member (CEO—you too) let’s make this top priority: Devote time to step back and ask a few critical questions to focus on culture, before reading another board book cover to cover and calling it a day.
Here comes the biggest question in this crash course: The first, and biggest question for any board should be, who is OUR boss? Every organization has owners, and a board is simply a stand-in for those owners. You have to know who your owners are before you can decide what it is you should be doing. And you have to know who you are accountable to for organizational results.
Once you know who your owners are, do you know what results they expect in exchange for their investment of time, money and/or support? The board should be crystal clear about what the owners expect the organization to accomplish on their behalf, for whom and at what cost.
Once you are clear on who your owners are and what they want you to achieve, do you know what behaviors or actions they consider acceptable in order to achieve those results? This is where we really get to the heart of company values and culture.
A great question to ask yourselves is, what behaviors, even if they allowed you to achieve your expected results, would be off limits? Whatever the board decides those values are, it is critical that the board itself walks the walk. Seeing a board behave counter to its own stated values is deeply destructive to staff morale, most of all the CEO’s who, after all, is the board’s only employee.
Finally, how do you know the CEO is acting according to your stated values and therefore creating the company culture you expect? The newspapers are full of stories these days of corporate culture gone terribly wrong, followed by board members plaintively stating, “We had no idea.” Ignorance is not bliss, nor is it a defense. If culture is critical to your organization’s success, shouldn’t you know without a doubt what that culture truly is?
If boards are to change the world, it’s important they fulfill their true calling as leaders and the “deciders” of the organizational culture.
If you enjoyed this blog, let us know. That will tell us to write more on insights you find useful. Email either of us because we co-author and meet for morning coffee right here in DFW, TX, to talk about one thing—you and what you want us to do next. We do this for you and for the organization depending on you for inspiration and leadership. Email either of us: Vicki@thearcspark.com or Georgia@Communicators.com.