There is a surge of C-Suite interest in understanding the secret of successful cultures in what we’re calling “Culture Forward” companies as varied as Apple, Facebook, Google, Southwest Airlines and Warby Parker. How do they do it? Are they just lucky enough to hire only highly talent people with a great work ethic? Or is something else driving their success?
In our experience, executives in companies with a positive work culture have a distinct and different leadership line of sight.
In most organizations, leaders focus primarily on strategy, technical expertise, products, marketing and shareholder value. Senior leaders in Culture Forward companies start with employee engagement, building trust, and actively supporting innovation and smart risk-taking. They see that execution on these key dynamics enhances performance, financial results and shareholder value.
The data bears this out
According to a recent Hay Group study, companies with cultures that build an engaged workforce have revenues 2.5x higher than companies with low engagement. Similarly, Gallup’s 2015 Annual Employee Engagement Study found that organizations with highly engaged employees have 147% higher earnings per share than their competitors. Gallup also found that engaged employees are 87% less likely to leave their company than non-engaged employees.
So that’s the good news about the power of an engaging culture. The bad news is that currently 70% of workers in the Gallup study reported they were either not engaged or actively disengaged.
If the engaged culture evidence is so overwhelming positive, why aren’t more companies working to create this positive environment?
What Goes Wrong
The breakdown comes back to leadership line of sight. Most senior executive rise to their positions based on their technical expertise — not their ability or experience in creating engaging work cultures. People are most comfortable with what they know they do well — not with what feels uncomfortable.
Shifting one’s leadership line of sight takes courage. There’s no foolproof recipe or model for success in this area. Leaders need to be willing to take the risk of playing outside their comfort zone in this critically important aspect of their work.
For things to change, it must be safe for executives to make mistakes and experiment with new ways of leading. The best way to accomplish this is to create a situation where the entire C-Suite takes the leap to shift the leadership line of sight together.
Easier said then done? Yes, because success requires sustained effort and commitment.
However, status quo in a fast changing business environment leaves a lot of opportunity and talent on the table. In a future post we will talk about the “how to’s” of translating the theory of a Culture Forward perspective into action.
Authors — Joe Collins, former Group Head of HR for Fidelity Investments and Gary Schuman, President of CDL Consulting work with organizations on practical approaches to Culture Change and Senior Executive Leadership