The Challenge of Scaling and Maintaining Strong Company Culture
Over the years you find yourself engrossed in certain topics of study, sometimes quite innocently and without intention, as it was with me and the subject of “culture”. I discovered in my late 20’s that I have always been curious about interpersonal dynamics inside an organization and what really makes people tick, which can be quite different than you may expect. How is it that some groups, some teams, seem to be light years ahead of other teams who share the same demographics, talent, and socioeconomic background? In my 15+ years of observing this phenomenan, I have found that culture is always the answer or at least part of the answer to this dilemma. Culture is often the “invisible force” that drives both the performance and satisfaction of team members. Culture is the X-factor for many successful companies. It is their secret sauce that binds them together, drives superhuman performance, and is the one thing that a competitor will never be able to rip off or copy. For generations, visionary leaders have built powerful companies around winning cultures: Steve Jobs at Apple, Alan Mulally at Ford, Herb Kelleher at Southwest, and hundreds of others.
Unfortunately, culture has also become a buzzword. I find that disturbing and more than a little disheartening. A concept that can be powerful enough to change lives and alter the course of history for a team, company, or even a nation, has been mightily eroded by our overuse and misunderstanding. It is all around us. Today I read an article from a local news organization that was talking about how Boise companies were building culture through flexible work hours and ping pong tables. Um, no.
For many organizations, the concept of culture has become an idea that is trotted out on display for team meetings or perhaps can be seen in the employee perks offered by management; however, it extends no deeper. You will find zero evidence of the written or spoken cultural standards espoused by the majority of organizations today when you take a close look at how people in the organization treat each other and how they treat their customers. How do they think and what do they choose to do when nobody is watching?
From a young age, I was a student of teams and what attitudes and behaviors set them apart. Nobody called it “culture” back then, and it certainly was not a corporate buzzword. Being involved in team sports from the age of five, I quickly became curious as to why some of my teams were so successful and some were not. By high school and certainly into my experiences as a collegiate athlete, this curiosity had blossomed into a steady but still quiet observation. I became more vocal about team unity, attention to detail, and dedication, as I gained experience and moved into leadership positions at Boise State University. Life and work after college revealed that the same group dynamics I had experienced in team sports and had observed in my personal life were dramatically impacting companies as well – from different construction crews I worked with in commercial concrete, to the dozens of fire houses at the Boise Fire Department, to the various real estate brokerages I worked with, and continuing today to the company I founded in 2013, Amherst Madison. In many ways, I think of it as the culture I founded in 2014, as opposed to the company. My experiences as both a follower and a leader in a variety of successful team environments taught me that culture would play a critical role in the success or failure of my new organization. I knew by that time what type of culture I wanted to create and a few of the strategies to make sure that happened, as well as some major pitfalls that would destroy my new team. This, also, came from experience. Although I had been on a lot of great teams, I was also on some that lost – a lot. These losses also came with lessons. Bitter lessons. The teams that lost taught me just as much if not more than the teams that won.
How does it feel?
In the cold, long days of the 2005/2006 winter, I was walking through the Boise State locker room after a physical therapy session when the thought flashed through my head, “we are going to be damn good this year.” The feeling stopped me in my tracks as I immediately began reflecting on what it was that caused me to have this thought, which was very premature considering it was not even time for spring ball much less fall camp or game day. We were months away from that point. The premonition was a gut feeling as much as anything else. The feeling registered because I had felt it before. It felt just like it had before my Sophomore year at Eagle High School when we went undefeated and won a state title, making our mark as one of the best teams in school history. It felt just like it did before my freshman year at Boise State when we would go on to a single-loss season and near-miss on perfection against Louisville in the Liberty Bowl. It felt just like it had on other winning teams in other sports. This feeling in the winter of 2005/2006 turned out to be 100% accurate as we went undefeated that season and won the Fiesta Bowl. That was a pivotal moment for me because it showed me that winning could be predicted with some accuracy based on the culture of the team. I began paying close attention to what those winning teams had that the losing squads did not. I noticed the feeling long before I could articulate what a healthy, winning culture was composed of or how to encourage the growth of one. This observation has continued today and of all the things I can say about Amherst Madison, I am probably most proud to say that our culture is marked by that same “winning feeling”. So, how does it feel, exactly?
A winning culture feels exciting, hopeful, connected, and purposeful. The members have a clear understanding that they are there for a purpose that is larger than themselves. This shared purpose, along with shared values and going through challenges together, helps to create bonds which enhance connectivity with one another as well as with the larger purpose (or mission as we will discuss). In a positive culture, the future is bright and optimistic. A winning culture understands that a rising tide lifts all ships. Contrast this with a negative or toxic culture that is marked by individual achievement placed above team objectives. Negative cultures feel closed off, with members sharing a general distrust of each other’s motives and objectives. There is a sense of fragmentation, if not outright rebellion, at the thought of any shared purpose. Each person is out to maximize their own benefit, regardless of the cost to other team members or team objectives. Politics and drama abound in negative culture environments as does the evolution of a “me vs. you” attitude instead of “us vs. them.” In business, you see negative cultural traits pop up in the form (sometimes obvious and sometimes not) of people making decisions that undermine others on the team, based solely on financial or political gain. This behavior will invariably be justified by some derivative of the statement “it is just business.” Yeah, “just business.” That is what you hear right before you are about to get screwed over by someone. There is no such thing as “just business” – for the same reason there is no such thing as a “work you” and a “personal you.” There is just a you, and you take yourself with you everywhere. I have been burned, and burned badly, by making the awful decision to get into business with these “just business” types. To the extent that it took an 18-month lawsuit, enduring ridiculous slander and defamation throughout, and over $75,000 in legal fees just to break away from the partnership and position a buyout. Lesson learned the hard way. I digress. That is a story for a different time. Back to culture.
Defining Culture
I want to begin by stating that in my opinion, culture cannot truly be “defined” in the sense of defining the solution to a math equation or a question of law. As a follower and huge fan of the spiritual teacher Eckhart Tolle, in addition to my own observations, I do believe that a human being can never be truly defined or understood. Just as the universe itself or a simple flower is limitless and beyond our true understanding, so are human beings. Culture is nothing more than what happens when human beings interact with one another. So, it would stand to reason that culture cannot be defined or understood any better than people themselves. I do think we may recognize positive vs. negative cultures, and we certainly have the ability to shape culture within our organizations. We can spot the differences as they appear in the results achieved by a team, how they treat one another, and the impact they make in the world.
If you Google around (yes, I used it as a verb) for some definitions of culture in organizations, be prepared for hundreds of results in the form of articles and blog posts which are about 75% false or misleading. Authors describe it as “beliefs and behaviors,” “values,” “attitudes,” or as “policies and procedures” or even “energy and vibes.” I just read an article published by a news organization that discussed how local companies were building “positive work culture” through flexible work hours, employee benefits, and ping-pong tables. This is painfully inaccurate and irresponsible.
While descriptors that reference “attitudes” and “behaviors” are getting closer to the mark, most definitions of culture are completely off base and irrelevant. I wish it were as easy as making a new policy about work hours or putting bean bag chairs in the office lounge. If it were, you would see a whole lot more dynamic and positive work environments in America. The proof that culture is not shaped by these quick-fix methods is easily found by studying the number of teams where the stated culture, the written values, are much different than what is practiced on a daily basis. Reading the mission statement and perhaps talking to management about their organization’s culture will often paint a much different picture than what is found in the back office, the lounge, or out in the field. The dissonance between what is said by management and what is experienced by team members or clients is extremely damaging. This erodes trust within the team and becomes a spiral of detachment and self-interest.
Actions speak louder than words. Cliché? Maybe. True in this case? Certainly. Words alone do not shape culture. Words backed by action shape culture. If you want to find out what the culture of an organization is really like, then go to a team meeting as a guest, shadow someone for the day, take a couple team members aside and have a conversation (better yet engage them as if you are a customer), all while observing their actions. Just observe. How do they treat each other? How often are there interactions? Do their actions match their words? Are they bringing positive or negative energy to the workplace? Are they kind or unkind to one another? I have always told real estate agents who are investigating brokerages that they are doing themselves a huge disservice if they do not go to an office meeting before they make their decision on a good fit. They will learn more about an organization’s culture from silent observation of that meeting than they would from even ten meetings with the brokers and management. I made this mistake myself as a new agent some ten years ago. The first brokerage I went to was a national franchise with a good reputation, nice presentation materials, and what I thought was solid leadership. I made my decision before I went to a meeting. The first office meeting I attended had zero organization, no value to attendees, and negative energy that culminated in an actual argument between two agents about Lord only knows what or who. Turns out, that meeting was a representation of the actual culture as opposed to what I had observed while being recruited. I was gone two weeks later, but I didn’t forget the lesson.
While I don’t think you can define “culture” precisely, I will say that from my observation, the number one place to look for it is in how people in the organization treat each other and how they show up every day. The sum total of team member beliefs and actions will determine the organizational culture. So, as a leader, how are you supposed to know what your people truly believe or what they are doing every day? You don’t, you can’t, and you won’t.
I guess we better make sure we are getting some good people and that we are doing a good job as leaders.
Shaping Culture
Culture is shaped by many things. In fact, once you have the foundation for a winning culture in place, it is absolutely fascinating how many things you can do that will push it a few degrees this way or that. Those details are outside this article’s scope. I want to focus in on the three primary drivers of culture that must be right, all the time, without exception: Leadership, The People, and The Mission.
Leadership – Leadership is the beginning, middle, and end of culture. Without impactful leaders who espouse the cultural values you wish to instill, you will fail.
This is not an article about leadership but leadership drives culture at all levels, in all industries, and it must be discussed. An organization that seeks to have a motivated, sharing, and professional culture must be led through motivation, sharing, and professionalism. The values, and more importantly the actions, of leadership must be a match with the goals of the organization. Nobody is perfect all the time. Yet, anything less than 100% authenticity and true leadership by example will lead to fragmentation and failure. Leaders are responsible for setting the tone of “how we behave” through their actions first and their words second. I have had the benefit and pleasure to work with some amazing leaders over the years. From football coaches to early mentors, to my company officers at the Boise Fire Department, and through to my mentors in business today, they taught me how to hold a high standard for myself, how to speak and act from a place of caring and that you are nothing without your people (team). These were (and are) great men who walk the walk. They worked so hard and showed how much they cared about you to such an extent that you would do anything to make them proud. Disappointing them was worse than death. Their actions set the tone for the entire organization, and it was always a high bar to clear.
I have also worked for some “not so amazing” leaders. One specific example comes to mind. I spent three years of my life working for one of the worst fire captains in the history of fire or captains. I could write a book about his exploits and a series of books about my feelings on his exploits. I learned much about what not to do as a leader, from… let’s call him “Larry.” “Larry” was a poor leader because he was a micromanager who did not trust his people. He was rude and obnoxious to be around, and he had huge blind spots in his professional skill set that would never be corrected due to his towering ego’s unwillingness to admit wrongdoing. The culture that resulted from his leadership was toxic. Morale in his firehouse was consistently low, with fractured team unity and much negativity surrounding his decisions (and general presence). A fire department often reveals so much about the impact of leadership on culture because every firehouse has different leadership and every firehouse has a slightly different culture, even though they are all under the umbrella of the same department issuing the same SOPs with the same training. This dynamic made my situation all the more painful, as the occasional shift worked at another firehouse (ANY other firehouse) only served as concrete validation for how shitty the environment was at mine, as well as the cause of the same. I watched “Larry” erode confidence and productivity to an extent that it drove good people who were positive workers to become distant and negative. I watched him destroy what could have been a winning culture.
Often, when it comes to leadership and behavior, we tend to think in terms of the positive things that leaders do. The good example they set for others to follow. As important as this is, it is only one-half of the coin that is held by exceptional leaders. The other half, just as critical but not as frequently discussed, is the behavior that they will not tolerate from their team. Personally, this standard is more difficult for me to uphold than is the standard of my own behavior I wish others to model. Put simply, I am more comfortable holding myself to task than someone else. I think many of you can resonate with that, although, many leaders are the opposite (including one of my significant influencers, Steve Jobs). That is ok. We all have strengths and weaknesses. Things that we need to improve upon as well as things which make us exceptional.
I had a big opportunity for improvement, AKA a huge leadership challenge, only recently. I had a conflict with an agent at my company that had been brewing for some time, probably a couple of years if I am honest. We were personal friends with her and her husband, had been over to their home for dinner, and I had (and still have) a great deal of respect for them. I would be lying if I said that this personal closeness did not have a significant impact on how long I let the situation at work carry on before finally bringing it to a head. The “symptom” of the problem was that the agent had an enormous amount of turnover on her team. In a two-year span, she had lost or cut ties with 10+ associates who had joined her team. The splits always seemed to be for slightly different reasons (stated reasons), but one thing they did have in common was their ferocity and disruption. In fact, as time went on, the breakups between her and associates became more and more dramatic, to the point that attorneys were being hired and lawsuits threatened. This constant turnover and these dramatic breakups typically resulted in her former team member leaving the company entirely because the relationship between them and her was untenable.
All of this was damaging to the brokerage as a whole and ran in direct conflict to our priorities of low turnover and agent retention. Other agents were asking what was happening with the turnover on the team and why it was not being corrected. Staff members were being disrupted and distracted with the conflicts and drama that accompanied the breakups. A divergence of priorities between the brokerage and her team had become apparent and was widening. For my part, I stepped in on multiple occasions to attempt to dissect what had happened, offering coaching and resources, and trying to help make sure it didn’t happen again. The problem was, it was never her problem. She rarely would admit wrongdoing of any kind, consistently placed blame on the departed team member, and was not taking corrective action to prevent recurrence. She refused to look in the mirror and was not making any progress. Ultimately, she was just not treating people very well. I don’t think it was intentional on her part. In fact, I know it was not intentional, but it became a pattern. After a particularly nasty breakup that was very disruptive, I knew the time had come to force the issue. I could no longer fail as a leader by sitting by and allowing her behavior to disrupt the remainder of the organization. I had felt this time was coming for a while, yet, I had hoped that it would self-correct or that something would change. I set a meeting for a week out and agonized over what I knew would transpire when I forced her to be accountable and take ownership of her actions. I knew that the conflict was very likely to end with her departure from the organization and a termination of a valued friendship.
Even up to the day of the meeting, I was waging an inner battle over the upcoming showdown, hoping that she would see the light and acknowledge her role in the conflicts and that we could course-correct at the last moment. Then, an hour before the meeting, a quote popped up on LinkedIN that hit me like a slap in the face: “The Culture of any organization is shaped by the worst behavior the leader is willing to tolerate.” – Gruenert and Witaker. Wow. In an instant I had clarity on two things. The first was my failure as a leader for allowing this situation to exist for as long as I had, and the second was that the meeting I had in an hour would result in an immediate change of her behavior or an immediate exit from the organization. She chose the latter.
Often, we think of leaders as role models for others to follow. Sometimes, leaders have to step up and make decisions about what their culture is not going to be and who will no longer be a member of the team. This must be the quote portion of the article, because I want to close out this section on leadership with one from Mr. Steve Jobs: “If you want to make everyone happy, don’t be a leader – sell ice cream.”
The People – Who you bring into your organization will do more to establish the Culture than anything else you do. Period.
The only reason I don’t have People listed as the number one driver of culture is that leadership makes the decisions about who gets in and who stays out. In fact, this is the most important function of leadership in any organization. Those leaders who learn how to find and recruit the best people, the right people, will be set up for success in the creation of a winning culture. Those who do not, will not. Every culture is a bit unique in terms of how much they emphasize group cohesion, competition, education, innovation, and other key factors of culture. However, you will find numerous similarities, across time and industries, of cultures that produce sustainable results with a sense of purpose and joy.
So, who are the “right people”? That depends on the type of culture you are trying to create. I like to keep it simple. So, I look for people who match the characteristics of our winning culture. When I was just getting started with Amherst Madison, and I had nobody with which to compare, I chose people who had the characteristics of the culture I wanted to create: sharing of their knowledge, motivated by learning, relationship and community driven, positive, and energetic. As we evolved and grew, we had working case studies of who thrived in our culture and who did not. I formalized this description of “Our People” by writing down the key characteristics and distributing it to my executive team. I spend a lot of time talking about who fits here, who does not fit here, and pushing this knowledge down throughout the organization. I probably don’t do it enough. I am not sure that a person can do it enough. It is that important. One evolution that I have taken is that I used to look for a good culture “fit.” That is, someone who fit the characteristics of our current culture (because we have a great one). I recently saw something that altered my perspective on this and jolted me into raising my own bar. I don’t remember where I saw it, but someone made the point that you should not simply look for a cultural “fit” but instead a cultural “enhancer.” I loved that! Why shoot for someone that would simply be the same when you can get the A Player who will take things up a notch!?
I could tell a lot of stories here about some of the “right” people and some of the “wrong” people. Suffice it to say that we have paid dearly in the form of wasted resources and wasted time by bringing on a few of the wrong people. The adage “Hire slow, Fire fast” is gospel. One of the biggest mistakes I see from entrepreneurs and leaders at all levels is they do not slow down enough up front to make sure they are getting an A Player. The only mistake that may be even more common is holding on to the wrong player for too long. I have made both of these mistakes. A positive, upbeat, and productive culture takes a long time to build and watchful eyes (emphasis on the plural) to continue nurturing. A single rotten apple can spoil the bunch quicker than you can say Jack Frost. I mean it can happen QUICK. You have to cut toxic people out immediately or face serious damage to your organization as their negativity will spread like a cancer. Hands down, the single best resource I have ever found on sourcing and hiring the right people is the book “Who” by Geoff Smart and Randy Street.
The Mission – Why are we here? A winning culture always has a collective goal, a mission, a purpose, which goes beyond their daily labor. It lays the foundation for why they are different and coincides with, or in some cases supersedes, individual achievement.
In addition to great leadership and great people, all the high-performance cultures in which I have participated have something else in common. All were (or are) focused on a collective goal, a collective vision, a collective mission that is placed at the very top of the priority list. I think it goes without saying, but I will say it anyway, that this mission has to be sincere. If it is not sincere, if it is not backed up with action and supported with love, then it is meaningless.
In a mission-driven culture, individual performance and achievement is celebrated but within the context of the team’s mission. Individual achievement is nourished and recognized with enthusiasm, so long as it is accomplished within the parameters of the team’s core values and as a part of the team’s overall mission. Leadership spends a significant amount of time keeping the mission in front of the team members and seeking out prospects to join the team who believe in the mission and “buy in” 100%. The Mission is always above and beyond the daily work of making widgets or selling services. There is something about humanity that we all have a deep desire to be engaged in important work for a greater purpose. We seek out groups who are engaged in a mission that sparks something inside us. We long to be alive with curiosity and a sense of adventure with purpose.
The Mission at Amherst Madison is to “redefine what it means to ‘Add Value’ to the real estate experience; before, during, and long after the transaction.” The belief that drives this mission of raising the bar is that “clients deserve more from their Realtor, Realtors deserve more from their brokerage, and the community deserves more from us all.” We despise the status quo; and quite frankly, we think that people deserve more from their real estate agents than what they have historically received. They deserve a Trusted Advisor, not a glorified taxi driver (nothing against taxi drivers) who happen to make as much per hour as an attorney. This is wrong. We reject the example set by other real estate brokerages who care not for the communities in which they operate except to see how much they may benefit from them. The agents who come to our team and thrive are very much engaged in our mission. They are passionate about offering professional services, forming lasting partnerships with their colleagues, and investing back into the Treasure Valley. These people, their passion, and the manner in which they conduct themselves, form the backbone of our culture. Our culture is driving results in the form of thousands of satisfied clients, hundreds of public 5-star reviews on our services, $250,000 invested/donated to the Treasure Valley in the last 12 months alone, and production gains that have placed us at #28 on the INC 500 list of the fastest-growing private companies in America.
At Boise State Football, our mission was always to go undefeated, win a conference championship, and ultimately to win a national title. While we never quite reached that final objective, at least in my time at the program, our unified vision, backed by shared values, enabled us to bring down the thunder on the competition. In my four years at Boise State University we had a combined record of 43 wins and 8 losses. As I noticed in my years at BSU, and as I have continued to watch that program evolve, the number one asset that has carried Boise State to prominence is a winning culture. Put simply, losing was not acceptable. The results of that culture speak for themselves. Since the year 2000, Boise State is the most winning college football team in America.
Here are a few powerful cultures which have revolutionized their industries and the missions which drive them:
Apple – “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App store and is defining the future of mobile media and computing devices with iPad.”
Nike – “Bring inspiration and innovation to every athlete in the world. If you have a body, you are an athlete.”
Southwest Airlines – “The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.”
Culture as Leverage – Be Warned
Why should you care about a winning culture or how it is nurtured? If it is not obvious by now, this is the “secret sauce” the “X-factor” which powers the finest teams in existence. People want to be a part of great organizations and great teams because it is a better way to live. A more skillful way to live. A happier way to live. A winning culture can be used as leverage to enact positive change on the organization in much the same way as financial leverage can be used to increase an investor’s ROI.
However, a word of warning. Just as with financial leverage and investments, there is such a thing as negative leverage in the cultures we shape. The scary thing (and exciting thing) about culture is that once it is entrenched within an organization, it takes on a life and a mind of its own. We have spent most of this article discussing how a positive culture will self-replicate and lead to winning. Well, the opposite holds true as well. A negative culture will self-replicate and lead to more losing. This is nothing more than the law of attraction. For coaches, owners, and leaders of all kinds, this should make them pause and take heed to the type of culture they truly want to shape in their organization. Many leaders do not understand the long-term implications of their actions when they make decisions which are harmful to culture. In many ways, and especially without a dramatic course-correction, a new organization has set the fate of their company long before the leadership is even considering the cultural impact of the precedence being established. A winning culture will attract positive, energetic, driven people who will step in and improve the culture. A negative or toxic culture will attract negative and toxic people. It doesn’t always have to be that extreme in order to be detrimental and in fact rarely is so extreme or obvious. What is most often seen, and what I see in my industry, is a cultural division based on how people want to do business and how they want to be perceived. There are real estate brokerages in our local market who will never attract a substantial share of top producers who wish to be seen as professionals by their clients and colleagues. Why? Because these companies have established cultures which repel those individuals.
This Smells Like Work…
In closing, building a winning culture is a bunch of damn work. The process of nurturing and shaping these teams is a grind marked by failure, missteps, and frustration. Players come on, players jump off (or are pushed off), and it takes years to get it right. Only those leaders and those teams who are authentic about their mission, their inner purpose, will thrive. The teams who set out to build good habits and have the discipline to hold the line, especially when they start winning, will be rewarded. Ego and success are the two biggest enemies of an established winning culture. Yes, culture tends to self-replicate; however, just as with our personal habits, it is a lot easier to break a good habit than a bad one. The leaders who try to use cheap tactics to build culture are wasting their time and the time of those who depend upon them for guidance. This is a long game dominated by authentic leadership and teams driven by purpose. Stay hungry. Stay foolish. Stay on the path.