T’S UNCLEAR WHO first said culture eats strategy for breakfast, but it’s one of the great truths of running a business. Without the right culture, not much positive can get done. With the wrong culture, ruin awaits. Organizational cultures are powerful. They can raise standards, spur productivity, engagement and accountability, and boost employee loyalty. They can ensure a customer’s welfare is paramount, or that every worker is focused on the bottom line or looking for the next breakthrough idea. They can attract the right people and deter the wrong ones from applying. And when the culture is aligned with your own personality and beliefs in how a business should run, it makes coming to work a win instead of a battle.

As Howard Schultz, the former CEO of Starbucks, has acknowledged, without its culture, his $125-billion company would be nothing: “The only competitive advantage we have is the culture and values of the company. Anyone can open up a coffee store. We have no technology; we have no patent. All we have is the relationship around the values of the company and what we bring to the customer every day. And we all have to own it.”

The power of culture is something that clearly most business owners understand. More than 70 percent of the ECPs in our Brain Squad said they strongly agree that culture was critical to their company’s performance and success.

And yet culture is also something most small business owners don’t actively manage. This seems to be for two main reasons: The view of management that reflects the traditional theory that business is essentially contractual: Employees exchange their labor for money and are motivated by incentives and controlled by policies. But the second probably bigger reason is that culture is fiendishly hard to control. Unlike technology, inventory or physical environments, culture is “wet.” It’s human and involves emotions, social connections, ingrained behaviors, and psychology. And while culture is incredibly easy to spot — think of organizations like NASA, the U.S. Marines, the New York Ballet, Google or Trader Joe’s—it remains this nebulous, intangible thing that can be hard to corral.

It’s also one of the most difficult things to impose from the top down. This is partly because there is no one “best practice” model that can be implemented. Culture is organic. It is made up of the unsaid stuff—shared values, expectations, social norms … and pressures. It is the things people do when the boss is not around (which ultimately is probably the best definition of culture).

And annoyingly, it’s not like you can even ignore it. Even if you don’t try to manage it, a culture will take root. Every business has one.

Tiffany Firer, the optical manager at Lifetime Eyecare in Jenison, MI, says that’s the case at her practice. “Our current culture is something we couldn’t have cultivated on purpose. Even over the course of the last five years, the culture does shift with new hires — but only slightly — because the roots of our practice are to care for ourselves, each other and our patients with the same devotion and understanding as we do our loved ones.” It is something that she says gives her great personal pride and also engenders loyalty, mutual respect and hard work from the staff. Interestingly, Firer notes she had previously worked at LensCrafters, where she said the culture was much more corporate and money-driven, and while the company was very focused on empowering the staff to learn and improve their skills, she never felt “that I mattered all that much to LensCrafters.” And she left after a few years.

According to management theory, cultures can be plotted against two axes running from tight to loose and from permissive to ordered and hierarchical.

Writing in the Harvard Business Review (HBR), Harvard business professor Boris Groysberg and his team say cultures can be classified into eight types or styles:

• Caring work environments are warm and collaborative, with a focus on relationships and mutual trust. This family-like set-up is one a lot of ECPs identify with.
• Purpose is exemplified by shared ideals and contributing to a greater cause. Whole Foods before it was swallowed by Amazon was a good example.
• Learning is characterized by an emphasis on innovation and creativity. Work environments are open-minded places that spark new ideas and support the exploration of alternatives. Failure is not considered a bad thing. Think Tesla.
• Enjoyment is expressed through fun and excitement that is shared with customers. Zappos set the high bar for this kind of culture, again before it was consumed by Amazon. “Have fun. The game is a lot more enjoyable when you’re trying to do more than make money,” its late CEO Tony Hsieh said.
• Results is characterized by achievement, performance and winning. Wall Street investment banks typify this approach.
• Authority is defined by strength, often reflected by the leader, along with decisiveness, and boldness. Steve Jobs-era Apple is a great example.
• Safety is defined by planning, caution, and preparedness. Work environments are predictable places where people are risk-conscious and think things through carefully. Insurance companies and medical institutions often fit this model.
• Order is focused on respect, structure, and shared norms and traditions. The SEC would be an example of such a methodical place where people play by the rules and leaders emphasize procedures and time-honored customs.

“Whereas some cultures emphasize stability — prioritizing consistency, predictability, and maintenance of the status quo — others emphasize flexibility, adaptability, and receptiveness to change,” Groysberg writes in HBR. “Those that favor stability tend to follow rules, use control structures such as seniority-based staffing, reinforce hierarchy, and strive for efficiency. Those that favor flexibility tend to prioritize innovation, openness, diversity, and a longer-term orientation.”

Most organizations are typically a mix of more than one style. Nearly all businesses—as commercial enterprises—are results-oriented to some degree, but a healthcare provider will be more focused on caring and safety (“First, do no harm”) than, say, a Wall Street investment bank. For an ECP, trust and the patient’s welfare are paramount. This will lead to a more measured approach to business and making money.

Although business cultures seem to rise and fall like fashion (the Silicon Valley model of smart failure, anti-hierarchy, innovation seems to be all the rage at the moment), no one culture is inherently better or worse than another. For whatever problems the hyper competitive, money-focused Wall Street model may impose, it also drives a tremendous work ethic and does what it is supposed to — attracts bright young minds and brings in money.

The key thing is that the culture is aligned with what the organization is trying to achieve.

As our chart shows, our Brain Squad ECPs ranked Caring as their No. 1 cultural value with Authority the least desired style:

The other thing about cultures is that they prevent behaviors as much as they promote them.

As much as you may want to foster a cohesive culture, too much groupthink can be dangerous when times call for change. When “it’s the way we’ve always done things” dominates, that can spell disaster for a commercial enterprise in a fast-changing world.

Few business owners profess to being 100 percent satisfied with their company cultures. Indeed, our Brain Squadders rated their cultural satisfaction at a little over 7 out of 10.

But it is tough to turn a culture around, and it takes time. In the following pages we provide tips from ECPs on how to foster a driven, happy team whose goals and values are aligned with yours.

First: Listen

Founders obviously play a significant role in setting company culture, but before too long it starts taking on a life of its own and develops organically from the staff. Before you can change your store’s culture, you need to understand it and know how your staff views it. That requires spending time with them discussing the issue. Keep your groups small—no more than four employees at a time—and spend 60 to 90 minutes asking open-ended questions like:

• What 10 words would you use to describe our company?
• What advice would you give a friend if they came to work here?
• What do you think is considered really important around here?
• Who do you believe fits in and who doesn’t?
• What does it take to succeed here?
• What behaviors get rewarded?
• If you had a magic wand, what’s one thing you would change?

“Leaders tend to think employees won’t open up — but we’ve seen the opposite,” says Joseph Grenny, a social scientist and head of leadership training company VitalSmarts. “When an executive sits down and truly listens, employees will be surprisingly honest.”

Articulate Your Vision

In his book Delivering Happiness: A Path To Profits, Passion, And Purpose, which tells of shoe company Zappo’s growth into a billion-dollar company, late founder Tony Hsieh recounted how he resisted for years publishing formal core values—“essentially a definition of our culture”—because he had thought of it as a very “corporate” thing to do. The delay, he says, was one of his bigger mistakes, as the core values become central to hiring, the way staff interact with each other and customers, and the way the company does business.

Hsieh’s goal was “a list of committable core values that we were willing to hire and fire on. If we weren’t willing to do that, then they weren’t really ‘values.’”

The 10-point list, which includes values such as Deliver wow Through Service, Embrace and Drive Change, Create Fun and a Little Weirdness, Do More With Less and Be Humble, took a year to put together and was built on employee input.

Pablo E. Mercado of Optima Eye Care in Alpharetta, GA, has adopted a similar approach, saying he tries to hire people who will “live” his store’s culture as opposed to having values that are only there on paper. “If you have people that do not share, or do not care to work within, the company culture, it will bring a number of issues that are best avoided altogether,” he says.

A long line of research on emotional contagion shows that people in groups “catch” feelings from others through behavioral mimicry. If you regularly walk into a room smiling with high energy, you’re much more likely to create a culture of joy than if you wear a neutral expression. Your employees will smile back and start to mean it.

Establish Your Purpose

Nietzsche probably put it best: “He who has a why can bear with almost any how.”

Purpose may not be your No. 1 cultural priority (ECPs listed Purpose as No. 2 in our Brain Squad survey), but it needs to be articulated clearly to new hires in your written core values, as well as modeled and celebrated to reinforce a positive company culture. When workers feel connected to a purpose, they are more willing to try new things, take risks, and contribute to their organizations in new and valuable ways. “People who find meaning in their work don’t hoard their energy and dedication. They give them freely, defying conventional economic assumptions about self-interest. They do more — and they do it better,” say business professors Robert Quinn and Anjan Thakor, writing in the Harvard Business Review.

When your business involves helping people enjoy better vision, establishing purpose shouldn’t be difficult but it can be overlooked in the day-to-day rush to get things done. Be sure to share the stories of people’s lives improved, and comments from appreciative customers and patients.

Model the Culture

“The greatest influence in the world is the influence of norms,” says Grenny. “When people see visual models of desirable behavior, and when that behavior becomes widespread, it also becomes self-sustaining.” However, few people understand that norms change one person at a time. “When we coach executives to inspire others, we tell them to find that one positive example — a person, a team, a unit that went the extra mile to help a customer, to help out a fellow employee, meet a particularly high standard — and make it evident these are your expectations and let it sink into the collective conscience of the entire organization,” he says.

Find the Opinion Leaders

The people who make up our social networks are the key sources of persuasion in our lives. But some of those people are far more powerful than others. When it comes to adopting new ideas or behaviors, for example, it is estimated 85 percent of the population will not adopt a practice until they see these so-called opinion leaders or early adopters do it. These people represent only about 13.5 percent of the population. They are smarter than average and tend to be open to new ideas, but they are different from innovators (1.5 percent of the population) in one critical way: they are socially connected and respected. When trying to change your culture or implement a new one, you have to identify and win these people over to your cause. “Spend a disproportionate time with them, listen to their concerns, build trust with them, be open to their ideas, rely on them to share your ideas and you’ll gain a source of influence unlike any other,” says Patterson in Influencer.

Use Stories

When trying to cajole workers to accept cultural change it is easy to come off sounding like a nag or a manipulator. Unlike lectures, stories are effective because they transport people out of the role of resistor/critic and into the role of participant in an emotionally charged drama. Stories help people view the world in new ways while giving them hope. They can show the consequences of, say, shoddy work, such as ill-fitting glasses or contact lenses, and understand the perspective of customers who felt they weren’t listened to. “Make sure that the narrative you’re implying contains a clear link between the current behaviors and existing or possibly future negative results,” says Patterson. When you’re promoting change in how people work, your stories need to deal with both ‘Will it be worth it?’ and ‘Can I do it?’”

Promote Accountability

Defending the high standards of a culture requires peer accountability, so that workers of any level feel comfortable challenging one another when they see mediocrity. Indeed, on high-performing teams, peers do most of the heavy lifting when it comes to maintaining standards. Almost counterintuitively, it is in weaker teams that bosses must enforce standards (in the weakest businesses, there is no accountability). Regular weekly reviews can provide opportunities for mutual feedback and establish peer-accountability as a norm, Grenny says in Crucial Accountability. As the boss or manager, the way you handle a poor performer lets your team know whether your priority is keeping the peace or pursuing excellence.

“If you shrink from … addressing this issue, you don’t just lose that person’s contribution—you send a message to everyone else about your values,” says Grenny. Being dismissed should never be a surprise. Expectations should be so clear, and feedback so candid, that everyone will understand the consequences of their current choices.

Focus on Vital Behaviors

When fostering change, don’t worry about outcomes, focus on behaviors. Most managers don’t appreciate just how few high-leverage behaviors are needed to drive change, says Brigham Young University management studies professor Kerry Patterson in Influencer: The Power To Change Anything. Watch what your best performers are doing and try to determine the unique behaviors that make the difference, run mini-experiments to verify your hunches and then put your findings into practice. He cited the case of a company that wanted to improve its service culture but had only one sales team that met its customer satisfaction targets. By observing them in action it was found they did five things without fail: smiled, made eye contact, identified themselves, let people know what they were doing and why, and ended every interaction by asking, “Is there anything else that you need?” Simple stuff but when implemented without fail, the company got the results it was looking for. Says Patterson: “People need to be taught how to do things, not told what to do.”

Compliments are one of the best ways to guide behavior and yet most managers are total praise misers. But according to Marcus Buckingham, author of The One Thing You Need To Know, when polled, employees reveal their No. 1 complaint is not being recognized for notable performances. He recommends giving each team member time during your Friday “bookend meeting” to share not only their own experiences but a shout-out to someone who helped them during the previous week. When they know this is coming each week, they will be more inclined to stay connected and keep track of who they worked with and how they were able to help each other.

App It

Online programs can make the implementation of reward programs much easier than in previous times. An example is Bonusly (and there are many others), a program that allows workers to recognize each other’s hard work and reward it. In a profile in INC magazine, Optima Office CEO Jennifer Barnes explained how she uses it. “We give all employees 150 points a month that they can give to co-workers for doing a great job. It’s important because it shifts the company culture from just trying to impress the boss, to working for the team.” Evidence highlights the importance of keeping incentives small, spontaneous and symbolic as overly large rewards can distort and corrupt behavior.

Beware Stagnation

“There is a time in every business when the “old ways” need a facelift. Don’t stagnate because it’s comfortable. “Comfort is the enemy of growth,” cautions Dave Goodrich of Goodrich Optical in Lansing, MI. That is the second danger of hiring for cohesion. Too much emphasis on cultural fit can stifle diversity and cause managers to overlook promising candidates with unique perspectives, an important attribute in our fast-changing world.

“Where everyone thinks in similar ways and sticks to the dominant norms, businesses are doomed to stagnate,” says Wharton organizational professor Adam Grant, urging that you hire for adaptability as well.

“In some environments culture can be so cohesive and strong that groupthink can occur where management or staff teams are committed to a singular vision that crowds out any view on a more viable future alternative — organizations that have a very strong product identity and value proposition are more susceptible to this than others,” Grant wrote in a 2019 article. As advertising legend Walter Lippman put it: When all think alike, then no one is thinking.

Reinforce the Desired Change

Workplace studies have shown how organizational structure and design can have a profound impact on how people think and behave. When the physical world supports your cultural aspirations and limits human choice, you don’t merely make good behavior desirable, you make it probable. Jennifer Leuzzi of Mill Creek Optical in Dansville, NY, says her practice’s decor “creates an atmosphere of cozy/chic/vintage festive that helps define who we are and how we act.” Caitlin Wicka of San Juan Eye Center in Montrose, CO, says a shift away from the office manager model to more of a team leader system that treats everyone like “adults” with the attendant responsibilities ensures “everyone likes to come to work.”

Keep Talking

On average, it takes 10 to 20 exposures to an idea before it will be accepted. To shift the shared norms, beliefs, and implicit understandings within an organization, the desired change might be framed in terms of a response to real and present business challenges and opportunities, as well as aspirations and trends. Because of culture’s somewhat ambiguous and hidden nature, referring to tangible problems helps people better understand and connect to the need for change.

Go Deeper

Hire for culture, not skills, is a business adage reflected in the shorthand definition: A Good Hire = Skill + Will + Cultural Fit. But what many managers look for and are acting on is more of “an intuitive sense of ‘Would I get along with this person?’ and that often isn’t very reliable,” Kirsta Anderson, head of culture transformation for Korn Ferry told the Wall Street Journal. Hiring managers need to go deeper and figure out whether applicants are in sync with more fundamental elements of their culture, Anderson said: “Are they excited about how the company innovates, serves customers, or makes a social impact? Will they mesh with the way individuals and teams at the company work by collaborating or competing? And will they naturally make decisions the way the employer wants — individually or as a group — embracing or avoiding risk?”

What it is:

• Shared enthusiasm about a company’s mission or purpose.
• A common approach to working, together or individually.
• A mutual understanding of how to make decisions and assess risk

What it’s not:

•  A common educational, cultural or career background.
• A sense of comfort and familiarity with co-workers.
• Shared enjoyment of such perks as ping pong and craft beer.

Onboarding

Get a robust onboarding plan in place and you’ll allow new hires to navigate your company culture with confidence and quickly get up to speed. “Clearly defining organizational goals and explaining the ‘why’ behind them is essential during the onboarding process, when new employees are learning the ropes and grappling with what is expected of them,” former Intel CEO, Bob Swann, told the New York Times in a story about his efforts to change that company’s culture.

A successful onboarding program:

• Helps new hires understand how work is done in a company and addresses the details of the company’s daily operations.
• Outlines the organizational structure and explains where everyone fits in the framework.
• Re-enforces the company brand, and its values, mission, and vision.
• Acclimates new employees to their surroundings and environment, which helps them feel connected to others.

Bring Out the Best in People

Create policies for the many, not the few. That allows you to design policies to bring out the best in people, not micromanage their every move. Yes, some people will try to take advantage of you but treat everybody like an adult. Make sure they understand their responsibilities and trust them to do the right thing. Similarly, look to share the big-picture responsibilities. This affirms each person’s value to the company and allows everyone to build their resumes with new accomplishments. “The next time you need to strategize a project or organize an event, consider designating someone who isn’t already in a leadership role to take it on,” says Tanya Hall, author of Ideas, Influence And Income.

Beware Incentives

The primary cause of most culture-change debacles is when companies attempt to influence behaviors by using rewards as their first motivational strategy. “Influence masters first ensure that vital behaviors are connected to intrinsic satisfaction. Next they line up social support and double check both of these areas are in place before they finally choose extrinsic rewards to motivate behavior,” says Patterson.

As company leader, make sure mission statements are enacted in the “micro-moments” of daily life. “These consist of small gestures rather than bold declarations,” write professors Sigal Barsade of Wharton and Olivia O’Neill of George Mason University in a column in Knowledge@Wharton. “Little acts of kindness and support can add up to an emotional culture characterized by caring and compassion.” Managers at Netflix do this by rewarding employees for sharing their mistakes with colleagues, to promote belief in the value of transparency.

Have a “No Asshole” Rule

Along with finance, healthcare ranks high on the list of professions in which power differences, time pressures, and fatigue can combine to create toxic environments. Such pressures shouldn’t be allowed to excuse bad behavior. In The No Asshole Rule: Building A Civilized Workplace And Surviving One That Isn’t, Bob Sutton, a professor at Stanford Business School, makes a well-reasoned argument that assholes—whom he defines as self-centered, abusive individuals—are generally bad for the people that work with and for them, and for the organizations that harbor them. But he is also emphatic that even if assholes are successful, life is too short and too precious to tolerate them. “The evidence generally is that when you treat people badly, the only time it really seems to work is if you’re in a zero-sum game and it’s a shorter-term game,” he explains. “And my perspective is that even if you’re in the zero-sum game, where the assholes get ahead, there’s all this negative carnage. The people around them, their physical and mental health and personal relationships, all suffer. No positive culture can survive their corrosive influence. Show them the door.

Create a Culture of Trust

To a lot of bosses, culture means employees who will keep working hard even when no one is watching. Trust is central. Neuroeconomist Paul Zak has identified the brain chemical oxytocin—shown to facilitate collaboration and teamwork—as a key player in this regard: the higher the levels, the more energetic and collaborative the workers. In Trust Factor: The Science Of Creating High-Performance Companies he details a framework for creating a culture of trust and building a happier, more loyal, and more productive workforce. The framework includes eight key management behaviors that stimulate oxytocin production and trust: 1) Recognize excellence; 2) Induce “challenge stress;” 3) Give people discretion in how they do their work; 4) Enable job crafting; 5) Share information; 6) Intentionally build relationships; 7) Facilitate whole-person growth; and 8) Show vulnerability. Ultimately, Zak concludes, managers can cultivate trust by setting a clear direction, giving people what they need to see it through, and then getting out of their way.

Make It a Great Place to Work But …

“You must enjoy work and want to come to the office each and every day. If you are not having an enjoyable time, then it’s just work!” notes Dr. Mark Perry of Vision Health Institute in Orlando, FL. And culture is often the difference. Happy hours, team lunches, birthday shout-outs, and outings can help build a positive environment and people generally do their jobs better when they know, trust and like their co-workers. But culture is not about providing a company keg or other frills like ping pong tables. It’s hiring people who have meaningful shared values and who actually want to have beers together. Celebrated business author Tom Peters says, “Give a lot, expect a lot, and if you don’t get it, prune.” That may sound glib, but each part of this advice—the setting of standards, the communicating of them and the systematic support to ensure they can be carried out—requires effort on the part of the business owner or manager … you. People want to work for a company that has high standards, that they can be proud of and that is going to bring out the best in them. It’s the serious stuff, not the frivolous, that matters.