Three Ways To Repair A Broken Culture

Whether it's a scrappy start-up or a multinational behemoth, culture is one of the most difficult tasks for a manager to handle. It doesn't come with immediate, black and white numbers to examine and requires strategic effort and thought, so many decision-makers pay it little attention. Weak managers don't think of it at all; they're too busy dealing with tactical issues to work on something strategic like culture.

But when a manager is leading a turn-around effort, culture becomes a decisive variable in the organization's success. In most cases a weak culture helped to contribute to the poor results that the new manager was brought in to turn around. 

First, Understand What Culture Is

When asked what culture is most managers, especially at tech companies, will mention how they have provide employees with free lunches, have intra-office ping-pong tournaments, etc. Though these are great things to have, they aren’t part of culture. Culture is what behaviors are rewarded, whether through promotions, bonuses, or other forms of recognition. It also includes things that you don’t punish; unethical and/or bigoted actions that go ignored in the pursuit of profit or simple refusal to competently manage employees.

Fortunately there are three items that you can implement that will allow you to improve your organization’s culture.

Item #1 Change What You Measure

A culture is a set of behaviors, and one thing that drives behaviors is your set of KPIs. Many underperforming organizations have an issue identifying the right KPIs, and instead get caught up in mere vanity numbers. Placing emphasis on levers that actually drive revenue will change people’s behaviors; they’ll need to make changes in order to meet the new standards that are in place as a result of the KPIs.

The real driver of changing what you measure: it will drive revenue. Nothing improves morale like success.

Item #2 Change What You Reward

People want to be recognized and advance their careers, and will adjust their behavior to meet your promotion criteria. In underperforming organizations, where the wrong criteria are in place, this leads to the wrong people being consistently promoted, with their political value being the deciding factor in staffing decisions. Others receive recognition and bonuses for things that don’t move the needle while those who work hard to contribute to the organization’s success toil away in obscurity. When people realize that this is how things are done, they stop working hard and start brown-nosing. This creates a toxic environment where accountability is non-existent and operational excellence is a pipe-dream. “A” performers leave for a legitimate place to work; “C” and “D” performers stay and reign supreme in a menagerie of mediocrity.

This is easy to change. Create business-based, transparent promotion policies that allow your key performers to advance their careers, and recognize the victories that your staff members earn. As “A” performers not only stick around but move into increased roles of responsibility, you’ll start to see an uptick in revenue. 

Item #3 Change Your Managers (At Least Some of Them)

Good or bad, culture is created and supported by the organization’s managers. They decide what is and isn’t rewarded, who is and isn’t promoted, etc., based on their professional belief systems. In essence, they’ve either helped to create or have contributed to your culture. Some of them will both buy into your new way of doing things and have the skills to meet the new standards (remember those new KPIs?) that you’ve deployed; others will either resist or be unable to keep up with the new way of doing things. If you’re serious about making a culture change, then these people will be transitioned into new roles, whether it’s inside of your organization or released to join another company. Doing this accomplishes two things; it removes people who will drag down revenue, and shows your “A” performers that this it’s worth their time and talent to stick with you.

This aspect of culture is naturally the most difficult improvement to implement, as it’s the most human element of this trio. Difficult decisions, however, are part and parcel of leading a group; decision-makers who are unable or unwilling to take this step are not truly committed to improving the culture, and will unwittingly become part of the very problem that they’ve planned to fix.

Get Started

Culture changes don’t happen overnight, so it’s important not to delay these three steps. Once you implement the first two items, you’ll have guidance of how to execute the third.

Once you’d done all three, then the work truly begins.

Now you’ll have to maintain the improved culture. That means using these three items as a cycle, repeatedly improving KPIs, compensation, and staffing as needed in order to remain on top not only culture-wise, but more importantly, revenue-wise.