How Company Culture is Created by "Operationalizing" Values
The significance of organizational culture in determining a company's success is deeply embedded in management thought, often traced back to Peter Drucker.
While Drucker may not have explicitly coined the oft-cited phrase, "Culture eats strategy for breakfast," his teachings consistently emphasized that the essence of an organization's culture can overshadow even the most meticulously crafted strategies.
This sentiment seemed to resonate with leaders such as Mark Fields during his tenure at Ford. Fields, who would later helm the automotive giant as CEO, is believed to have popularized the phrase, possibly drawing inspiration from Drucker.
This was especially evident during Ford's transformative years in the 2000s. During the 2008 economic crisis, while other US automakers took government bailouts, Ford decided against it, focusing instead on its core values and restructuring internally. Their commitment to these values helped them navigate the crisis successfully.
Apple’s core values were innovation, design excellence, and simplicity. After struggling in the late 1990s, Apple refocused on their core values, leading to the creation of game-changing products like the iPod, iPhone, and iPad. Their commitment to design and simplicity has been a touchstone throughout their product evolution.
An organization's core values serve as its beliefs and guiding principles, dictating the expected behaviors, decisions, and actions for everyone. The culture of an organization is the embodiment of its values, representing the behaviors, attitudes, practices, and interactions in its day-to-day activities.
In short, while core values provide the blueprint for how an organization wishes to operate, the culture reflects how it actually does. Operationalizing the values into a culture ensures consistency, trust, and clear expectations. In contrast, any misalignment can lead to confusion, distrust, and diminished morale.
The driving forces behind a sustained corporate culture are twofold:
The observable actions of top leadership, which set the tone for value embodiment
The consistent operational practices that align with those values.
Here’s a personal story of how we formed and operationalized the values that put brought Mass Relevance (2010-2014) culture to life:
When we started the company in December 2010, we didn't state our values until we were nearly 18 months old. I don't recommend this. But it's how it happened.
At the beginning, I knew my co-founders and I shared similar values. After six months of working together, I solicited thoughts from them on what it was like to work there.
Six months later I hired the rest of the executive team, along with more employees.
And then, six months after (18 months from starting) I asked the executive team and ALL 50 employees to share the words and descriptions of what it felt like to work at Mass Relevance.
What happened was exciting!
The words and descriptions to describe our values and culture that we co-founders wrote in the first six months nearly matched the words the entire executive team and employees shared a year later! This meant we hired consistently, which was possible because the co-founders and executives were involved in all hiring.
With those words we formed five core values. These word mash-ups matched our personality and created unique meanings.
• Awesomeness: Everything we do stands out. Our products, code, design, service, sales, marketing, work-life experience. All 100 percent awesome.
• Freesponsibility: Everyone has the opportunity and is encouraged to think outside their role.
• Agilispeed: We move quickly. We act and react with relentless composure.
• Transopency: We believe visibility empowers us to take ownership and seize opportunities.
• Teamwork: We respect each other's responsibilities and we value individual capabilities.
With those stated values, we could increase reinforcement and decision-making based on them. As we discussed perks and cultural activities, we gauged how well they supported our values.
Some of the “operationalization” we put into place:
Yes, we put a plaque up. Ho hum.
We based interview feedback on candidates matching these values. And we fired quickly when someone didn't match these values.
We implemented peer-to-peer rewards using YouEarnedIt, adding a values "tag" to the recognition we gave each other.
As we considered merging Mass Relevance with Spredfast (April, 2014)we observed our values were remarkably similar, although we used different words. When two companies' core values are very closely aligned, merging the companies together is much easier.
Perhaps "core values" are called such because they originate from your core people and become core to everything you do. Whether defined yet or not, it's from your core values that you build a team, a brand and a great business.