#5 |How to Build a Winning Corporate Culture

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Your company is a culture

Our dream at Quared is to make every employee feel like an owner. And we have a step-by-step framework for it.

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A company’s goal is to fulfil its purpose. And like with any goal or dream in life, it’s easier to achieve it if you Get Fit.
 

And there are two ways to get fit: by building skills (what we call capabilities) and by building healthy habits (what we call Culture and Values)
 

What few understand is that those invisible habits already exist (in you or) your organization. Herb Kelleher (CEO Southeast airlines) put it more eloquently “Culture is what people do when nobody is looking”
 

“Your company is a culture”. And as such, you need to learn to manage it.

In this Newsletter, we’ll talk about:
 

  • Why was Peter’s Thiel most important advice to Airbnb co-founder “Don’t f*** up your culture”?
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  • Why Facebook and Starbucks, when faced with business crisis, put their focus in turning around their culture?
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  • How has Amazon build a culture of frugality with a small yet powerful symbol?
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  • What is decentralization and why is so key to accelerate your cultural change?

How to build a winning Corporate Culture

In 2012, while Airbnb was scaling up and just got a 150Mn$ check from Peter Thiel, Bryan Chesky (Airbnb founder), asked Thiel what was the most important advice he could offer him.
 
Thiel replied:
 

“Don’t f*** up your culture”

 
Take a step back for a second. What makes your company successful? Is it big design decisions (what we call strategy) or the thousands of small, daily behaviours of your employees (what we call culture)?
 
Take Starbucks. Why is Starbucks so successful? Is it its fancy stores? Is it its unique supply chain model with partnership with coffee producers all around the globe?
 
Costa Coffee, Café Nero or even McDonald’s have already copied that. But Starbucks keeps on leading.
 
What these companies could not copy is that warm feeling when you get into a Starbucks store. Or that smile from the bartender. Or their constant innovation.
 

This is Starbucks culture.

 

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And, yes, in 2008 when Howard Schultz (Starbucks founder) was seeing competitors taking part of his market share, he decided to close up all stores and provide trainings to all of its baristas to improve the so-called “Starbucks Experience” (i.e., rebuild Starbucks culture)

Peter Drucker, the inventor of modern management once said: Culture eats strategy for breakfastAt Quared we believe “Culture *meets strategy for breakfast”.
 

Culture is your single most important strategic choice. And as such, the first step is to define it right.

Step 1: Define | “Values are what we Value”

Netflix culture deck is probably the most famous cultural piece ever. But its essence is much simpler than its 125 slides. One single truth better expressed through Reed Hastings words (Netflix founder):
 

“Values are what you value”

 
Take Pixar (the company behind movies like Shrek and Toy Story). In Ed Catmull’s words (Pixar CEO), “To create a movie you need 1000+ ideas”. In other words, Pixar as a company creates value through ideas, through creativity. And that is the cornerstone of their culture, Pixar’s most important valueEd , in fact, redesigned Pixar so as to create a system that fosters collective creativity (He even wrote a book called Creativity Inc.)
 
In a nutshell, you must understand the connection between why your customers buy your product or service (Your Purpose) and how your employees need to behave to fulfill your purpose (Your values and behaviours)
 

This is how Decathlon does it.

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  • Decathlon’s purpose is to “Make sport accessible to the many»
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  • To be able to do so, Decathlon sells low-price, technical, innovative, all-type of sports equipment. In essence, you buy at Decathlon because its cheap, good quality and you find everything you looking for

 

  • To become the best company in the world at doing so, Decathlon has built a culture based on:
     

    • Vitality: Imagine the innovative ideas that can come from an army of highly passionate and vital sports people
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    • Responsibility: Imagine the amount of cost savings you can achieve with an army of people extremely mindful and responsible on resources utilization

 
This is how culture and values should look like. This is how you connect purpose and culture. Linking consumer value with employees values.
 

The dark side of values: Values’ trade-offs

 
There is no such thing as a “bad” value. All values are good and is hard to argue against any of them: Agility, Care for detail, Results oriented, Belonging. I am sure you want all of them for your company.
 
That is, however, hardly possible. Values are like Star Wars: There’s a Dark Side behind each of them. A trade-off.
 
In 2014, Facebook understood this the hard way. Facebook, then, was riding on the sexy yet unconscious motto of “Move Fast and Break Things”. So cool.
 
Yet dangerous. Facebook didn’t realize that, moving fast could actually break things. And that, with their scale, that could have, well, high-scale consequences.
 
The story in short? Facebook screwed up an algorithm that inflated video viewership metrics, essentially telling the world «Don’t write articles anymore, do videos». And publishers started firing writers and editors and hired video producers instead.
 

With their massive scale, Facebook could not longer «Move Fast and Break Things». They had to «Move Fast With Stable Infra»

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Other examples: You can’t have agility and excellence at the same time. You can’t foster belonging and individual results-orientation.
 
Values are choices. And choices are trade-offs.

Step 2: Embed | “Make the values matter”

With your values strategically defined, time to build them throughout the organization. The key? Make them matter in the Moments that matter
 
And it’s not that hard. There are a handful of moments that matter:

     

  • Hiring: Getting the right cultural fits avoid mid-term hassles. It’s just tough to change peoples’ habits. Moving a perfectionist into an agile manager is no easy feat. Rather, hire “agile managers”. It’s simple. Ask indirect questions, real-life stories where values are showcased or just get creative during the interview process.
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  • On-Boarding: Regardless of a great fit, each culture has some specifics that ought to be quickly trained for. Train the new hires. Buddy them-up with your culture kings or queens (tip: not everyone is a good buddy). If you have a culture book they can devour, even better
     

  • Performance reviews: It’s obvious. Evaluate your people against your values. The most effective way? Don’t punish too much the ones that don’t perform well (that will lead to people lying on the evaluations). Follow-up with trainings and dedicated sessions instead. Reward, don’t punish.

 

“Make leaders matter”

 
Leaders will simply make or break your culture. It’s that simple. And if you do nothing, trust me, they will break it. Not making a choice is a choice with terrible consequences.
 
Pick your style as per your financial and time resources: Individual coaching > Group coaching (5-7 managers) > Webinars (20-40 managers) > Recorded videos > Offline materials. Whichever the format, make it fun and easy. Gamify it if possible.
 
Pro tips:
 

  • L2L (leader 2 leader) training: Get leaders to train other leaders. Easier said than done.
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  • Public accountability: Get leaders to talk openly about their commitments to live the values. No leader wants to fail on its promises.

Step 3: Accelerate | “1,000 things, 1,000 times”

 
The easiest way to do 1,000 things is by making sure every employee pitches in. Converting every employee into a Cultural Ambassador. CEO’s and HR community are far from enough.
 
Ambassadors program (or early adopters)
 
Building an Ambassadors program can really speed up your culture. Essentially, it’s a volunteer-based program where a set of employees are “pushed” and trained to launch cultural-related initiatives. 3 basic steps:
 

  • Inspire:
       

    • People follow leaders. Seek an inspiring leader/s to manage the program
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    • Build community: Find ways so that Ambassadors can connect with each other (e.g., regular webinars) and share experiences/ ideas
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    • Reward great initiatives
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  • Train:
     

    • Train them on your values. Go much deeper than with the rest of your company
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    • Train them on nudging theory (i.e., small actions that can alter people’s behaviours). Hold regular sessions to provide nudging ideas (see below an example of a powerful nudge)

 

 

  • Govern: Define a specific governance process (i.e., how they approve the initiatives, what budget they manage, how often do you meet…)

 
The process is not difficult, but, as always, the key is to be consistent.
 
Build symbols
 
Countries have flags, anthems, dances or dresses. You probably don’t need to go that far. But it’s clear that values and its definitions are far from enough.
 
You need to build cultural pieces that people can remember and relate to. People don’t remember theory. People remember stories.
 
One of Airbnb’s values is “Become a Cereal Entrepreneur”. In its early days, the 2 founders were running very low on cash, and in a very desperate effort, they decided to launch presidential-election inspired cereal boxes. The result? They made 25K$ and managed to keep the company afloat.
 

Becoming a “Serial entrepreneur” is a core value of Airbnb. But nobody would remember it. Instead, everybody remembers become a “Cereal entrepreneur”

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You can also build “physical symbols”.
 
Jeff Bezos was obsessed in building a culture of frugality to fulfill its vision of delivering low-cost items to its customers. One day, when refurbishing the offices, he realized that doors were cheaper than desks. And that he could build desks through doors and save money on it.
 

And that’s what he did. Jeff build a desk-door. Jeff build a culture symbol.

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Another great way to symbolize your culture is by creating shocking rules. Rules that will make people “wonder why”.
 
Amazon has a rule of “No PPT in meetings” – they use word memos instead. This rule symbolizes its value of “Dive Deep” (PPT are shallow, whereas memos require deep thinking). Imagine a new hire in Amazon getting told the first day that PPT are forbidden. His initial reaction will surely be: “But, why?”. And an explanation of the value will follow. And the culture will be reinforced in each Power-Point-less meeting.
 
Decentralize communication
 
Once you get people talking about your culture, you need to make sure you build the platform for that communication to happen and scale (especially in remote environments). Some companies use Slack, others use Workplace. Pick your platform, but avoid the communications department monopolizing cultural conversations.

Step 4 | “Don’t f***-up your culture”

 
We started this newsletter with Peter Thiel’s advice to Airbnb founder of “Don’t f*** up the culture”. And, if there is anything you should remember today, is this.
 

“Culture is build in drops, but lost in buckets”

 

Don’t f*** up your culture.

We discussed all of the above in our last Quared Masterclass!

“Make a life, not a living”
Alex, Miquel & Toni

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