I’ve recently discussed how CEOs need to own the vision and provide the proper resources. Another key responsibility is to Build the Culture. The right culture is so important in maximizing business performance that it should be an area of focus for every CEO.
The standard definition of culture is the set of shared attitudes, values, goals and behaviors that characterize a group. Quite simply, it is how things get done in the company. Every organized group of individuals develops a culture, and as I’ve written about, the CEO must constantly manage for the culture he wants.
The challenge with culture is that while most CEOs recognize that it is critically important, they don’t have a model to understand it or a method for measuring it. I gauge culture by the engagement level of employees. Using a simple 12-question survey engagement such as Gallup’s can be quantified and tied directly to culture.
The model I use for culture is based upon a paper written by David Rock called SCARF: a brain-based model for collaborating with and influencing others. In the paper, Rock provides a model of the way humans interpret social interactions. The fundamental idea is that the same brain networks that seek to maximize reward and minimize threat for primary survival needs are also used in any situation where people interact. This means that when employees are working, they will constantly evaluate external stimulus through this filter, generating either a reward or threat response. If they encounter a reward response, they will tend to engage in the stimulus. If they experience a threat, they will disengage from the stimulus.
Now most work environments are not life and death struggles, so this response will not always be strong enough to determine a person’s behavior, but it will influence their engagement.
Why is employee engagement so important in driving a high-performance culture? It turns out that the more creative and intellectually challenging the work, the more employee engagement predicts performance of the workplace. Numerous studies have shown how the subtle effects of the reward/threat response can dramatically impact cognitive performance. Simply put, if an employee feels threatened in any way, he or she will be less effective in solving complex problems. If your business depends upon workers’ brains more than their brawn, you will want to focus on employee engagement to maximize productivity.
I’ll be writing a lot more about culture in future posts, including the elements of the SCARF model, how to build a high-performance culture, and how to measure culture.
The fourth CEO responsibility in this series will focus on making good decisions, which seems obvious but is a complex process.
Related articles:
HUBSPOT CEO: 99% Of Corporate Cultures Are Stuck In The Past (Business Insider)
Culture and the Chief Executive (strategy+business)
How Employee Engagement Drives Growth (Gallup Business Journal)
I often think of culture as “how employees operate and behave in the absence of rules and oversight”, much like Macaulay once described character. Culture is a company’s character. Some examples here… http://bit.ly/a4esHg