I was on a Disney Cruise for our Spring Break, and I'm happy to say it was terrific. Not just because of the warm weather and lovely ship, but because of the staff. Cleary, Disney is constantly working on a culture of staff service, and it is paying off. Nearly a decade ago, we took a cruise with Disney and did not recall the same level of service or attentiveness. Although, at the time, as cruise newbies, we thought it was great. Just like a supertanker, I suppose, it takes a little while to get things up to speed. We went this time with friends and neighbors who are cruise veterans. I imagine that Disney's customer acquisition costs are falling with every happy family, all because of the culture of service they have created on their expanding fleet of ships.
Culture seems to be coming up a lot in conversation, recently. When I was in the U.K. at a human resources convention, I even chanced upon a cultural transformation officer. Funny thing is most business types don't know exactly what makes up an organization's culture, and even fewer know how important it is to the bottom line. What they do know, however, is that it's part of their organization that could and should be better.
Simply put, culture is the sum of the beliefs, customs, rituals, ceremonies and symbols of an organization. Culture is the energy of your organization, and is responsible for productivity and innovation. Culture is what makes your firm more money. Culture is what attracts and retains people to your organization. Culture facilitates change. The reverse is also true. Failing companies typically feature a "sick" culture. Staff are unhappy and going through the motions -- either waiting things out, or actively looking to jump ship.
Companies who are involved in mergers and acquisitions are aware of the importance of culture and often try to change it. My close friend Mike, a senior executive at a Fortune 500 company, called me recently to tell me he was leaving his company. I was stunned. Mike is 30, young, bright, driven and a very talented engineer. He was part of a company that promoted volunteering in communities, operating in an environmentally friendly fashion and giving back to the cities they operated in.
After his company was purchased the new boss disregarded these initiatives as perks and cut them out. It turned out to be short-sighted thinking: 60 percent of his staff who were under 35 left the company. Imagine the long term costs! I did some quick research and found the firm advertising on LinkedIn and other networking sites for a number of jobs. What are the talent acquisitions costs? Did they account for this in the planning for the purchase of this firm? Likely not.
By 2025, three out of every four workers worldwide will be millennials, like Mike. Culture matters to them in the same way it mattered to their great grandparents. These great-grandparents are the people who changed the workforce by leaving the farm and working 40 hours a week at factory, or going to university. Times change, our view of culture needs to change.
General Motors once ran a campaign titled "Not your father's Oldsmobile." In the end, it was a famous failure and the Olds brand has disappeared. In so many ways, what we have today is an Oldsmobile workplace. Designed by and for baby boomers, the parents of the millennials. Things are going to have to change, and fast, to accommodate a generation that has very different expectations about work.
In soon to be published paper utilizing data gathered from our mentor-training program, I demonstrate how vibrant cultures can and will make this generational transformation happen. Just like our sun, a great culture provides the energy that renews your superstars and powers your stars. A good culture also identifies the bad: Those "black hole" employees that sap energy from the rest of your employees, your emerging or developing stars.
To build your culture into a profit machine like Disney's cruise ships you need to:
•Teach people how to be cultural luminaries, people who symbolize your culture's values and can pass these values on to others. To paraphrase the work of Peter Drucker, a leader's job is to develop people, and to build trust, not just focus on operations and results.
•Design a system that identifies your firm's black holes. Usually these are people who understand how to manipulate the rituals and rules in your organization to their benefit. These are the people who block change and worse, yet kill the emerging stars because they fear they will take their jobs. Jack Welch advocates firing the bottom 10 percent of your staff each year. It's better to have a system that identifies who are managing this 10 percent and fire them. It is those black hole managers who are impeding your growth and your productivity.
•Leverage your superstars' knowledge of your corporate ceremonies and customs and how to operate within them. This can be as simple as teaching new employees the code of how meetings work at your organization, or as complex as the unwritten rules about how to get things done within the organization. In the DMS, often mentees cite the mentors' corporate knowledge around change management as the most important lesson they learned during the 16 weeks.
•Create a system that is a self-sustaining energy source -- just like the sun. Many employees believe that organizations have no moral compass. They don't trust a company. In your system ensure that your rising stars and your superstars understand that someone at the firm has their back. As my friend Mike said, our new boss couldn't care less who he hurts as long as he makes his bonus. Why should I work for him?
My research demonstrates that creating and celebrating culture can cut your churn by 50 percent and increase self-assessed productivity by 15 percent in as little as 16 weeks, but this can't be done if you don't realize like Disney did that you have a problem or challenges. Culture can be changed, profits can be achieved, but first, you have to have a team that believes in what they are doing.