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Defining the Characteristics of a Healthy Culture

What should we value to develop a healthy culture?  Answering this question, though, requires we first answer another question: What is a healthy culture?

What is a Healthy Culture?

An organization’s culture is the collection of expectations and norms that determine how a group behaves.  Taking this a step further, I’m going to define a healthy culture as one in which the expectations and norms for behavior result in people doing the right things, the right way, every time, regardless of whether or not they are explicitly told to do so.  That may sound like a high bar to clear for a culture to meet the standard of “healthy,” and it necessarily is.  It’s not enough for people to know what the right things to do are – they must actually do them, and do them the right way.  It’s also not appropriate for good intentions to be allowed to supplant the behavior expectations.  Relying on good intentions to guide behaviors quickly devolves into an environment where the ends are used to justify the means.  Once you start down this slippery slope, pretty soon people are able to justify nearly any behavior as long as the results of their actions are acceptable. 

A recent example of this phenomenon is the massive and fraudulent opening of new customer accounts by Wells Fargo employees to meet their sales goals.  At this point, I’ll give company leadership the benefit of the doubt, and assume they never intended for a massive, multi-year, illegal, and unethical fraud to be perpetrated by the company’s employees against their customers in order for them to meet their sales goals.  If we allowed ourselves to simply be happy with the outcome (sales goals met), then the culture that tolerated the illegal behavior would necessarily have to be considered healthy, and it clearly wasn’t.  To develop the culture they want, companies need to state clearly what they value and define the behaviors they expect of their employees.

Characteristics of a Healthy Culture

We have studied the cultural characteristics of organizations around the world.  The groups we have studied range in size from small (a few dozen members) to large (tens of thousands).  They operate in diverse industries that include manufacturing, retail, oil & gas, finance, government, military, logistics, and energy.  And they range in age from relatively young (a few years in operations) to decades old.  Despite including such a broad and diverse set of companies, our research and data on the cultures of these organizations has revealed five cultural norms present in the high-performing groups.  In every one of these organizations that has a healthy culture, there is clear evidence of Integrity, Knowledge, a Questioning Attitude, Formality and Team Backup.  Here is what I mean by each of these healthy cultural norms:

Integrity

  • People can be relied on to do what they say they will do, and to do what is expected of them
  • They have the courage to do what is right and to hold everyone accountable, including themselves

Knowledge

  • People understand not only what they do, but why they do it
  • People are continually expanding their understanding of systems, processes, and hazards of their workplace

Questioning Attitude

  • People anticipate problems and are alert to unusual conditions
  • They don’t assume, they verify

Formality

  • People follow authorized procedures
  • They don’t tolerate shortcuts
  • They communicate information in a disciplined manner

Team Backup

  • People actively back each other up
  • They speak up when potential problems are recognized
  • They value other’s inputs

With these high-performing cultural norms identified, it’s now much easier to see how the definition of a healthy culture is not only appropriate, but also attainable.  When individual and group behaviors are based on integrity, knowledge, formality, having a questioning attitude, and backing each other up, it is absolutely reasonable to expect people will do the right thing every time, whether they are told to or not.  The organizational culture just simply expects them to – the train is leaving the station, they get onboard or they are left behind.  Now of course, nobody is perfect and mistakes will certainly be made.  But, with others anticipating problems and backing each other up, mistakes are caught before they turn into catastrophic incidents.  And, what’s more, when a mistake is made, the organization isn’t just thankful it dodged a bullet.  It invests the time and energy to understand how and why a mistake could have been made and it takes the necessary steps to prevent it from happening again.

So let’s return to the assumption I made a couple paragraphs ago...the one where I gave the benefit of the doubt to Wells Fargo’s leadership that they didn’t intend for their employees to behave illegally and take advantage of their customers.  Had the sales employees of Wells been operating with integrity, they would have had the courage to hold themselves and their colleagues accountable for doing the right thing when faced with the dilemma of having to meet their sales goals by fraudulently opening accounts or accepting the consequences of missing the targets.  Further, had the sales teams been operating with a questioning attitude they would have anticipated the outcome of their actions when the fraud was eventually uncovered and never gone down that path. 

If formality were imbued in their culture, their knowledge of the circumstances that were going on and the inappropriateness of the sales teams’ actions would have been formally communicated to the appropriate levels in Wells Fargo, and the organization would never have tolerated such shortcuts to meeting their goals.  Finally, if the members of Wells Fargo were forcefully backing each other up, they would have had the confidence to speak up when facing the undesirable choice of doing something illegal or having to deal with the consequences of missing their targets.  While it is not publicly known if the company directed its employees to take the actions they did, if it simply looked the other way, or if the illegal account openings were just the results of a group of rogue employees operating on their own, one conclusion is very apparent.  Given the scope of the illegal activities and the time-frame during which they were going on, the culture at Wells Fargo played a big role in enabling the failure.

It’s interesting that Wells Fargo defines culture “as understanding our vision and values so well that you instinctively know what you need to do when you come to work each day.”[1] That definition is very similar to the one used in this series of articles: the collection of expectations and norms that determine how a group behaves.  Yet it is also interesting that the company does not define the expected behaviors of its employees in its vision and values statement.  A company’s culture is much more than a statement to hang on the wall, yet that’s as far as many go in deliberately developing the culture they imagine.  If you want a healthy culture in your organization, you must clearly define your expectations for behavior and you must hold the members of the group accountable for meeting those expectations.  Broad-ranging, generic, and ill-defined terms will not get it done.

[1] The Vision and Values of Wells Fargo, https://www08.wellsfargomedia.com/pdf/invest_relations/VisionandValues04.pdf

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