Culture as a Problem Solver
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“Vulnerability is about trust, but not task-based trust. It's a trust to be open and honest without fear of retribution. Vulnerability is about having a safe place within the organization.”
— Mike Goldman
Defining Culture
Culture is defined as a set of beliefs and values that guide an organization.
Culture becomes the personality of the organization, for better or for worse.
The Three V's Of Culture
Values are non-negotiable behaviors that anchor a company's culture
Values are not just a marketing tool but an internal tool to guide behavior
Every company has a set of core values, even if they haven't been defined proactively
Core values can be negative if not proactively defined
Vision is about having a clear and compelling vision of the future.
Vulnerability is about being able to give and receive feedback in a safe place and having trust that people have positive intent and won't retaliate for honesty
Vulnerability creates a safe place within the organization
The vulnerability loop starts with you, and leadership teams should model vulnerability in meetings
Diagnosing Problems In Your Organization
Confusion and inconsistency of behavior within the organization is a problem
Toxic people within the organization can hurt the culture
Possible causes of a values problem include: not having an agreed-upon set of core values, having the wrong core values, not effectively communicating or living the core values
Stagnation refers to not growing from a financial and personal standpoint
Stagnation in people shows a problem with the vision of the future
People may not feel comfortable being truthful or vulnerable
Lack of trust can lead to private meetings and a lack of honesty
Steps Toward a Strong Company Culture
A clear, compelling, and inspirational vision of the future is necessary
A vision should start with the core purpose, which is almost never changing
The core purpose is like a North Star that guides you every day
A big, hairy, audacious goal (BHAG) is a 10 to 15-year goal that challenges you to greatness and is also part of the vision
BHAG is not something you achieve but rather a flag on top of the mountain that motivates and inspires you
BHAG should be something that is difficult to achieve but worth pursuing
3HAG refers to a three-year highly achievable goal. It is a three-dimensional view of a powerful, compelling, inspirational vision of the future
The Peer Accountability Exercise
The Peer Accountability Exercise
Go around the room, and everyone gets a chance to share about everyone else
Share one thing that a person does that you want to thank them for that helps the team.
Share one thing a person does that hurts the team and ask them to stop doing it.
Start with the CEO and go around the table, giving them input on what they're doing well and what they need to change.
Everyone takes notes on what they're doing great and what they need to change.
Share one or two behaviors that they commit to changing based on what they've heard.
Hold everyone accountable for changing their behaviors.
The Personal Lifeline Exercise
Go around the table and have everyone put on a piece of paper from birth to today what were the 8-10 to 12 highlights and lowlights of their life.
Share those highlights and lowlights with the team.
It's a great way to get everyone to open up and build trust.
It helps build people's muscles for giving and receiving feedback.
Three Ways To Measure Culture
1. ENPS
The first way is using an Employee Net Promoter Score (ENPS).
ENPS is a system where employees are asked how likely they are to refer someone to work at the company on a scale of 0-10.
2. Employee Retention
Employee retention is a way to measure culture
If retention is very low, it could indicate a culture issue on the team
3. Talent Density
Talent density is a calculation discussed in episode 13 about the quarterly talent assessment
It measures how well an organization is doing by way of talent
It's calculated as the percent of A players minus the percent of C players and toxic C players
Links to mentioned episodes:
Episode 9 - https://bit.ly/CreatingaCompellingVision
Episode 13 - https://www.mike-goldman.com/bltshow/quarterly-talent-assessment
Episode 17 - https://www.mike-goldman.com/bltshow/core-values
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In this episode, I want to talk about company culture, but I want to talk about it in a different way than we normally talk about it. Culture is normally talked about as this amorphous thing. It's about morale. What's going on with morale? Why aren't people happier? Do people really need to be happy at work, or do we just need, you know, more productivity out of them?
I wanna make it less amorphous and not only by defining what culture is, but in this episode, I wanna use culture in a pragmatic way. I wanna help you to understand when you have specific issues within your company, how can we actually use culture? To solve those problems. So instead of it being this amorphous thing, let's figure out specifically how we use it when we have a problem.
What part of culture may be at play? There. We're gonna talk about three pieces of culture. When there's a problem, which piece of culture may be at play, and what could we specifically do to use culture to resolve those problems. So let's start off and let's define culture.
Cause culture is one of those words that if you talk to 10 people, they'll each define it in a different way. And I simply define culture as a set of beliefs and values that guide everyone in your organization. And those beliefs and values are consistently followed. It becomes the personality for good or bad, it becomes the personality of your organization.
And we're gonna talk specifically, and I've mentioned this on other episodes, we're gonna talk about the three Vs of culture and how we can get pragmatic on each one.
The first V is values, and let me define it. So values is a small number of non-negotiable behaviors that anchor your company's culture.
Values are not things that look beautiful on a website, it's not a marketing tool. Values are an internal tool. That help people understand what is best, right, most noble about your culture. It boils that up to the top into a small number, three to six non-negotiable behaviors.
Now, if you're thinking, well, my company doesn't have a set of core values, you do, every company has a set of core values, you may not have been proactive in defining them.
They may not be a plaque on the wall, but every company has a set of non-negotiable behaviors that anchor the company's culture. If you are not careful, yours might be something like, don't admit you've made a mistake or you'll get your head chopped off. It might be the person who yells the loudest wins.
We all have core values. The question is, did you proactively create your set of core values? And I talk more about what core values are, how to create them, three tests of a core value, how to make sure you're keeping them alive. I talk about. You know all of that in episode 17 of the podcast.
The second V is vision. Vision I talk about in episode 9 of the podcast vision is, you know, how crystal clear are you with a compelling vision of the future? I'll talk more about that in a little bit, but vision is the second V.
The third V is vulnerability. And by the way, that second V vision I talk more about in episode nine of the podcast, vulnerability is about being able to for example, give and receive feedback and know it's a safe place.
Vulnerability is about trust, but not task-based trust. It's a trust that I could be open and honest without fear of retribution. It's a trust that the folks around me have positive intent that no one is looking to get me. If I am open and honest and saying something like, I screwed up, I don't know how to do that, I apologize.
Vulnerability is about having a safe place within the organization. So those are the three V's. Values, vision, vulnerability.
Let's dive into diagnosing problems within your organization and which core value may be at play and therefore, what should we do about it? So let's start by talking about the first problem.
And the first problem is if you have confusion and inconsistency of behavior within your organization. If there's a lot of anger at other people's behavior and why do we put up with that kind of behavior? If there's confusion as to what behaviors we're going to put up with, if we have toxic folks within our organization who may be very productive, but they're toxic, they're showing disrespect, they're hurting your culture, then you probably have a values problem.
And it could mean you don't have an agreed upon communicated, understood, set of core values. It could be you have core values, but they're the wrong ones. You have a set of core values, but it's things like creativity. And you say, well, it's important that some people are creative. But it's okay that others are not creative.
It could be you have respect as a core value, but if someone is productive enough, respect isn't so important. So either you're not living the core value, or maybe it's not really a core value. It could also be you have a great set of core values, but they haven't been effectively communicated. They're not effectively being lived, reinforced within the organization.
Again, I talk more about values within episode 17, but if you are having a problem of confusion and inconsistency of behavior. Behavior internally, or behavior in terms of how you're treating your clients, how you expect to be treated by your clients, that is a values issue. Check out episode 17 for specific ways to make sure you have the right values and you're living those values.
Let's go to the second problem. So while the first problem was confusion and inconsistent inconsistency of behavior. The second problem is stagnation. What if you are not growing from a dollars and cents standpoint or not growing consistently? What if your people aren't growing? Your people might not be motivated to grow.
That tells me in all likelihood, you've got a problem with the second V. You've got a problem with your vision. Your vision of the future. Three years out, five years out, fifteen years out, your core purpose almost never changing. Your vision of the future needs to be clear. It needs to be compelling. It needs to be inspirational.
And again, I talk about creating a compelling vision in episode 9, but just as a short review of that, your vision should start with your core purpose. You're almost never changing why? Why do we do what we do? Disney is not about theme parks or movies. Disney is about happiness. Starbucks is not about a cup of coffee.
Starbucks is about a third place where you could escape. What's your reason for being your core purpose? Something that would allow you or anyone on a tough day to look up and go, yeah, but remember why we're doing this. And it inspires you. So part of your vision is core purpose. Part of your vision is your 10 to 15 year big, hairy, audacious goal.
That flag on top of the mountain. If your core purpose is your North Star, and I say North Star because no matter how long you walk, In that direction towards the North Star, you're not getting there. And it's the same thing with your core purpose. You don't live your core purpose so you could achieve some goal.
Your core purpose is not a goal to be achieved. It's a way you live every day. But your big, hairy, audacious goal coined by Jim Collins is a 10 to 15 year flag on top of the mountain or man on the moon. It is a goal that's gonna challenge you to greatness. A goal that says, I don't know how we're getting there, but man, if we only could, that's your BHAG, your big hairy audacious goal.
Then you've got your 3HAG, your three year highly achievable goal. What's your vision? Three years out? From a dollars and cents standpoint, what sandbox are we playing in? What's our culture gonna look like? What's our vivid vision three years out? What are people saying about us? How does it feel to walk down the hallway?
Make it a three dimensional view of a powerful, compelling, inspirational vision of the future. So if you are stagnating from a dollars and cents standpoint, from a people standpoint, you need to create, communicate, and live a more compelling vision. So the first problem was confusion and in inconsistency in behavior that was about values. Second problem was stagnation. That was about vision.
The third problem is what if you have a level of distrust and fear within your organization, or maybe not as strong as that. Maybe it's not distrust and fear, but you feel like people don't feel as comfortable as you'd like them to be. Being truthful, being honest, creating that vulnerability loop.
The vulnerability loop says, if I am vulnerable with you and I share something that was uncomfortable for me to share like, hey I've gotta be honest with you. I'm not really good at networking. I need some help. If I say that to you, you automatically trust me a little bit more, and you now have a willingness.
To be vulnerable with me. And hey I know how that feels, you know, for a time I was just not very good at making decisions and here's how I solved it. And now I say, well, he was more vulnerable with me. I could be more vulnerable. And you get this loop, this vulnerability loop. That's what we want.
And if you have distrust and fear within your organization, if you don't have enough trust for people to be open and honest, to feel like it's a safe place where there are a lot of meetings after the meeting, people don't feel comfortable saying in the meeting, but they'll say it separately privately to one or two other people after the meeting.
If that's the challenge, I would coach you to say, vulnerability starts with you. Vulnerability. And I don't care whether you are the CEO of the organization, you're the VP of sales of the organization, you are an accounts payable clerk. Vulnerability always starts with you. You start that vulnerability loop.
As opposed to waiting until other people are vulnerable with you. There is a great story from Ford back in 2006 when Alan Mulally took over the reins of Ford. They were on their way to losing 12.6. Billion with a B, $12.6 billion dollars. And Alan started when he came on board having these BPR meetings, these business plan review meetings, and he would go around the table of all of his leaders and ask on their big initiatives, were they red, yellow, or green, failing in danger or successful?
And what do you think this company about to lose $12.6 billion dollars. What color do you think all of their initiatives were? If you're thinking green, you're right. Green company losing 12.6 billion. Everybody's saying we're in the green. Alan Mulally, no shock, was very frustrated by this until one day. A gentleman named Mark Fields, who is the president of Ford Americas.
And who was he thought the heir apparent to the CEO slot before Alan Mulally was hired. See, he's thinking, I didn't get the CEO job. I'm not long for this world anyway. Why don't I just be honest? And he raises his hand and says, on the Ford Edge project, were in the red. And instead of him getting his head chopped off, Alan starts clapping.
And says, Mark, thank you for your honesty. What can we all do to help Mark? That was the day Ford changed from losing 12.6 billion in 2006. Then becoming more of a team with that vulnerability based trust. Started with Alan's BPR meeting and Mark Fields, taking a chance and being honest. That's the moment Ford changed.
That's the moment that resulted in 2008, 2009, when all of the domestic car companies were getting bailouts from the government. Ford didn't need a bailout because they became a real team. So that vulnerability starts with you. And I would say if you're on the leadership team, it starts with the leadership team.
If the leadership team could be vulnerable with each other and with their direct reports, you'll see that vulnerability cascade its way throughout the organization. So it starts with you, then it's the leadership team. And as an individual, as a leadership team, you need to model the way it starts in meetings.
It starts with something like a weekly accountability meeting and being open and honest when things aren't going well, when you screwed up, when you missed a commitment.
There are also two exercises that I'll recommend, not as a substitute for doing and saying the right thing in meetings and creating a safe place in meetings, but a way to speed up the process.
It could take a team many months to create that safe environment. There are ways to speed up the process, and number one is something called the personal lifeline exercise. The personal lifeline exercise very simply is going around the table on your team. And having everybody put on a piece of paper from birth to today, what were the eight to 10 to 12 highlights and lowlights of their life.
It may be things like a highlight of getting into the high school I wanted to get into or getting into this great fraternity in college or getting my first job or getting my first promotion. Those can be getting married. Having children are all highlights. Some of the lowlights might, might be the time you got fired.
From a job, it may be when someone close to you passed away or about a divorce or what are the highlights and lowlights of your life, and you go around the table and you share those. Every time I've done that with a leadership team, there's been some tears shed in a good way. There has been a lot of, oh my God, I had, now that I hear that story about you, now I know why you act that way for good or for bad.
It's a great way to get everyone to open up. I've seen teams that are together 20 years, do a personal lifeline exercise and find out things they never knew about the people around the table.
Second exercise is something called the peer accountability exercise. In the peer accountability exercise, you go around the room and everybody gets a chance to share about everyone else.
What's one thing you do that I want to thank you for that helps this team and here's one thing you do that hurts the team, and I'd like you to stop doing it or I'd like you to work on it. And the way it works is you start with the CEO. And everybody goes around the table giving the CEO one thing they do, they want to thank them for that, helps the team.
So you go around and do that. And then the second thing you do is now you go around and everybody gives the CEO one thing they'd like to see that CEO change or stop doing that's hurting the team. It's a wonderful exercise that scares the crap out of everybody when I ask them to do it, cause it requires a level of trust and honesty that they've never had before.
And by the way, as the CEO is getting all this input, they're taking notes. And then the next person goes and gets that input and the next person, and by the end, everybody's got their notes on what they're doing great, what they need to change. And then you go around and everybody shares one or two behaviors that they commit to changing based on what they've heard.
And it's everybody else's job to hold them aaccountable for that. That peer accountability exercise is one of my favorite, favorite exercises, cause what it does is it takes a one time event and I like to do it once or twice a year, but it takes this exercise, this event, and what it really does is helps build people's muscles for giving and receiving feedback.
At any point, not just in a formal exercise, but informally after a meeting or after a discussion. So two ways to speed up that vulnerability. Personal lifeline exercise, peer accountability exercise.
I also wanna talk about some ways to measure culture. Culture's not an easy thing to measure, but three different ways of measuring it.
Number one is something called an employee net promoter score. An ENPS net promoter score or net promoter system is a simple system where there's one question with a follow up, and that one question is, and it should be anonymous. How likely are youon a scale of zero to 10, how likely are you to refer someone else to work here?
It's the same question you might ask your clients. For a client net promoter score, you might say, on a scale of zero to 10, how likely are you to refer us to someone you know, for an employing net promoter score? Same question, but it's how likely are you to refer someone you know to come work here?
And then there's a follow up question that says, what could we do to improve the score? And the score is your percent promoters. Your promoters are those people that score you in nine or a 10 minus your percent detractors. Those are the people that give you a score anywhere between zero and six. If you look at your percent promoters minus your percent detractors, you're gonna get a number between negative 100% and positive 100%.
You create that benchmark and your job is to improve over time, that employee and that promoter score that tells you how engaged, how passionate your workforce is about working there. So that's number one. Employee net promoter score.
A second simple way to measure culture is through employee retention.
Chances are if your retention is very low, you might have a culture issue on your team.
The third way is through talent density. Talent density is a calculation I talk about in episode 13 where I talk about the quarterly talent assessment. Talent density is a measure of how you're doing by way of talent within your organization.
It's your percent A players minus your percent C, and what I call toxic C players, like the employee net promoter score, the result of percent A players minus percent C players. It's gonna be anywhere from negative 100% to positive 100%. Living the core values is a big part of whether you're an A player or B player, C player, or toxic C player.
Again, I talk more about that in episode 13 of the podcast. I promise you, as your talent density goes up, Your culture is going up as well. If you've got a negative talent density, you probably have some culture issues that you need to work on. So some ways to measure employee net promoter score, employee retention, talent density.
In wrapping up, remember all of this starts with your leadership team. If you are on the leadership team, if you are the CEO, you're not gonna fix cult fix culture out there. Until you fix culture in here could be in your own head, in here also means around that leadership table, start there.
I have never seen an organization that has a poor leadership team culture, but somehow it's great everywhere else. Starts with the leadership team and cascades down. Now, which one of these should you work on? Values, vision, vulnerability, depends where your major problem is. If your major problem is confusion and inconsistency of behavior within the organization, start working on values.
If the problem is stagnation, you're not growing. Work on your vision. If the problem is distrust, fear, lack of the ability to be honest, lack of a safe place. Work on vulnerability. Now, you need to work on all of these all the time, but you need to decide which one you're gonna work on hardest and first, right now, which one is it for you?
Take action. When you're done, I'd love to hear how it went