…neither is it nap rooms, free beer Fridays, Sunday morning team hikes, corporate retreats, or free lunches. Culture is not working from home or unlimited avocados in the kitchen. Culture is not even a set of values or a corporate mission. All these are merely artifacts of culture, not the culture itself.
Let’s look at two seemingly similar companies — Uber and Lyft. As ride-hailing apps, their value proposition is to get you — the user — from point A to point B and to make that experience as pleasant and seamless as possible. So why would one choose Lyft over Uber?
Because of how they go about their work.
The culture at Uber became front-page news back in 2017 and significantly hurt their bottom line. Uber became known for their bad culture, and users became aware of the company’s issues, such as Uber’s “focus on aggressive growth and intense competition” and “failure to prioritize compliance”, as well less customer-facing issues, like “a lack of transparency internally” resulting in “siloed teams that lack coordination and knowledge sharing”. Their continuous issues with gender discrimination, sexual harassment allegations, and other legal issues certainly only made existing bad culture perception even worse. The result? Consumers’ fingers started to hit a different icon on their phone screens.
Moreover, Lyft is continuing to eat into Uber’s market dominance and has been reporting phenomenal revenue growth year over year.
The #1 problem with culture.
To most, culture is not tangible. To most, culture lives in the ephemeral moments of interactions between people or between a company and its employees. To most, the impact of culture cannot be measured.
We beg to differ.
Culture is 100% measurable. An ineffective culture strategy (or lack of) will most definitely have an impact on your company’s bottom line. It might not be the most obvious thing or something you will catch right away. It might be a few years until you get to the root cause of your company’s underperformance. Or, like in Uber’s case, it might give your competitors an advantage you can’t afford.
So how do we measure culture?
Some organizations look at retention rates or employee engagement scores or at how many employees turn up at their staff events. Some organizations look at their corporate mission and values — thinking that once they get their team to co-create them, their culture will be set. And although these can be partial indicators, they are not actionable data points nor do they provide a holistic and actionable picture of how culture shows up.
To measure culture and its impact on the bottom line, we need to change our mindset on culture and start seeing it from a different angle.
Culture is how people work.
Have you ever heard someone say to you “hey, these guys at company X are doing this cool thing Y, we should try it too”? Then you try it and it doesn’t do anything for your company. Why is that? You might blame it on the execution, the team, or the original author, but at the end of the day, it’s just simply that it wasn’t the right thing to do for your particular culture. One of the biggest mistakes we can make is to treat culture as a templated strategy where one size fits all.
When I worked at a tech school as a Design Director, I worked with the executive team to expand the business nationally and then globally. I remember how completely different the challenge was to set up our second school in Toronto. After all, how difficult can it be? It’s a school, same curriculum, same topic, same teaching method. Right? Wrong! This new school (despite being a part of the same company) was significantly different. It was run by a different team, in a different market, in a different space, with a different budget. The things that worked in school A did not work in school B. They didn’t work, because how the team went about their work was different. What I discovered is that the way people worked in the Toronto team was what created the culture there, and it was unique to this team.
Given that teams and people that compose them are unique, we should look at culture as a combination of dynamic and complex processes between people and teams, similar to how ecosystems are — ever-evolving and 100% unique.
By accepting that culture is an ecosystem, we can start shifting our mindset towards measuring culture by looking at how this ecosystem operates.
How to measure culture
To measure culture, we need to have a good framework for looking at how people work. We at Hyperminds call it “The 4 Ways of Working”.
By examining your company on these Ways of Working, you can start creating a map of your culture. Once you have your current ways of working mapped out, you can then get deliberate about designing your Ways of Working to close the gap between where you are and where you want to be.
Let’s take communication as an example.
How do your people talk to each other?
When we work with companies and start our assessment, we examine each way of working super closely. When it comes to communication, we observe teams in action to answer questions:
How does information flow?
How frequently do people find themselves repeating the same message?
How easily is information accessible by everyone in the company?
How effective are meetings, feedback, and coaching practices?
Are communication tools clearly defined and adopted?
Once you answer these questions, you can start:
Identifying the existing practices
Identifying whether the existing practices are aligned with your brand and what you stand for
Identify gaps and missed opportunities
Be intentional about your ways of working
Train your team on Ways of Working to close the gaps and improve performance
But most importantly, answering these questions, you will be able to start seeing the cost that your gaps in communication are causing. Once you bridge those gaps, you can watch those costs disappear, which ultimately impacts your company’s bottom line.
Culture = competitive advantage.
Unlike Uber, culture strategy at Lyft is deliberate and is quickly proven to have a direct financial impact. When Lyft successfully filed for IPO, one of the co-founders wrote in his letter “Focusing on purpose and people isn’t just the right thing to do, it provides a lasting competitive advantage”.
In fact, Lyft’s culture strategy isn’t just words; it permeates everything they do, from operations (creating “driver centers” that offer significant discounts on oil changes and fixes) to its external brand experience, as well as their marketing campaigns.
One of Lyft’s marketing campaigns in the pre-IPO period seizing an opportunity created by Uber’s widely known culture issues.
What’s in your blind spot?
One of the biggest issues with lack of culture strategy is that behind all the free beer Fridays, yoga lunches, and corporate benefit packages, the most significant aspect of your culture ends up in your blind spot. It’s time we bring culture into the spotlight to turn it into a competitive advantage, not an after-thought.