Thread by @fintechjunkie

The idea that each company has its own culture isn’t questioned. Most people claim that it’s important and a contributor to an organization’s success or failure.

But guess what? People struggle when asked to explain what culture is!

A framework and thoughts on the topic:

2/36: A truism of business is that it’s a near impossibility for a single person to accomplish a “big thing” alone. Well run organizations assign accountability for the “big thing” to a Leader who is tasked with focusing the collective energy of a team to deliver a solution.

3/36: Leaders exist to kink the curve on outcomes. Given the same task, a great Leader is able to deliver a high-quality solution with a greater probability than a poor Leader can. They do this by mastering the “big three” levers of strategy, resource allocation and culture.

4/36: There’s very little debate or misunderstanding about what a strategy is. And allocating limited resources is a universally understood responsibility of Management with budgets and organizational designs showing up as standard artifacts.

5/36: But culture isn’t as well understood as strategy or resource allocation. There isn’t a simple definition that people agree on and there are no standard artifacts that one can point to that proves its existence. But it’s lived and felt every day. It’s real and it matters.

6/36: So instead of fast forwarding to a framework that might be helpful, I thought it would be better to start with a story about my personal discovery process around what culture is and how it shaped my thinking on the topic.

7/36: Please Fix It!

Back in a former life, over a number of years and many major successes I had established myself as a really good business builder. My widely recognized superpower was the ability to crack the code on new and challenging things.

8/36: One of the byproducts of my superpower was that as soon as I cracked the code on a business opportunity, the “powers that be” pulled me out so that I could focus on another critical challenge. It was frustrating at times but I accepted the role I was tasked to play.

9/36: Like clockwork, one day the call came in that it was time for me to tackle a new challenge. But this call was different. Instead of being asked to build something from scratch, I was asked to fix an important and very large business that wasn’t performing well.

10/36: The business was sizable (millions of customers and tens of billions of dollars of assets) but wasn’t making money. The team was 1000+ people strong, 7 layers deep and morale was marginal. It was a complex situation to step into but I rolled up my sleeves and got to work.

11/36: The next few months was a blur of activity that focused on framing the market dynamics and understanding our internal business model at the atomic level. From there, figuring out what needed to be done to fix the business wasn’t all that challenging.

12/36: With a compelling strategy and an army of resources at my disposal, I internalized that success or failure was going to revolve around how such a large team would work in concert to get work done. Sloppy thinking leads to sloppy outcomes so I focused on framing the “how”.

13/36: What’s interesting is that the framework I developed around the “how” naturally expanded to include process, communication and rewards. The “how” quickly morphed into a well-articulated definition of the culture that I wanted my team to live.

14/36: The first conclusion I came to was that making 1000+ people happy was a fantasy standard and a meaningless goal in and of itself. Happiness needed to be a byproduct of success that contributed to the team’s stability, quality and throughput.

15/36: The second conclusion I came to was that the vast majority of the organization’s frustration could be traced back to an ill-defined decision-making process. Knowing who could make what decisions and the process surrounding the decisions would be welcomed.

16/36: The third conclusion I came to was that everyone wanted their perspectives to be taken seriously and everyone wanted to hear about critical developments and decisions. Collecting input and sharing output had to be addressed.

17/36: The final conclusion I came to was that nothing mattered if the reward and recognition systems weren’t aligned to reinforce “good” behaviors and to punish “bad” behaviors. This was the trickiest bit to get right because it had to fit within a broader corporate framework.

18/36: Codifying and communicating a new set of cultural norms wasn’t easy and I can’t say that my first attempt was flawless. But over time my Leadership team filled in the gaps and the result was an extremely high performing and motivated team.

19/36: And this wasn’t my last rodeo as an operator. I learned to appreciate the power of designing and manifesting a culture that supported specific goals. I learned that the investment it took upfront to define how work would get done paid massive dividends down the road.

20/36: What follows are a sampling of valuable lessons that I’ve learned over the years about culture.

While the take-aways aren’t universally true, all are worth internalizing and broadly applicable.

21/36: Process can be liberating

When people know how decisions are made they can focus on recommendations and solutions rather than worrying about navigating an arcane decision process. Don’t underestimate how much energy can be recaptured with a well-designed process.

22/36: Balancing speed and completeness is tricky but healthy cultures get it right. Small and reversible decisions shouldn’t march through the same process as large and irreversible decisions. Remember that most people don’t mind process as long as it has a purpose.

23/36: Memorializing decisions removes confusion downstream. There’s nothing more frustrating than disagreement during implementation when the disagreement is about what was actually decided. Precision around permissions and next steps matters.

24/36: It’s important to have team members that respect and follow the decision-making process even if they don’t like it. Encouraging people to make suggestions that improve the process is healthy but constantly changing the process can be confusing.

25/36: The thirst for communication is bottomless

Establishing a regular cadence for sharing major developments and business results is important. Creating an outlet for team members to share observations, suggestions and concerns can help prevent an us/them culture.

26/36: Being equally transparent about good and bad developments builds trust that you’re not hiding anything. It’s universally true that people prefer to be in the loop even when news isn’t positive. When an information vacuum exists, rumors will emerge and morale will suffer.

27/36: Substance does not forgive style

Creating an environment where anyone can provide feedback on anything happening in the business sounds good but it can backfire. Aggressive personalities and negative problem solvers can create a toxic and uncomfortable environment.

28/36: Disagreement and debate is healthy when norms are established that don’t invoke feelings of anger or resentment. Challenging an idea in the right setting should be acceptable. Attacking an individual’s character or competency in public will almost always cross a line.

29/36: We’re all servants

It’s a fantasy standard to think that every team member will agree with every aspect of how a business is being managed. But it’s crucial that every team member agrees to trust management and have a servant’s mentality once a decision has been made.

30/36: Sharing perspectives before a decision has been made should be acceptable. But vocalizing dissent after a decision has been made is a cardinal sin because it undermines the stability of the team and can damage the team’s ability to execute.

31/36: Another “servant’s insight” is that efficiency and effectiveness suffer if a single set of rules aren’t in place. An organization only needs people who can function well within its defined rules and a strong Leader doesn’t try to morph the rules to make everyone happy.

32/36: Rewards speak louder than words

Rewards matter. It’s a truism that if you understand a team’s reward system you’ll be able to predict with near certainty how people will be behave. It’s critical to have a reward system that’s consistent with how you want work to get done

33/36: Do you want to encourage risk taking? Then finding ways to recognize and reward well-executed plans that fail is critical.

Is team stability and unity important? If so, the system should punish good outcomes if they were produced by violating cultural norms.

34/36: Is the business fighting a fire? Does speed matter? Then action orientation should be rewarded over completeness.

Is top talent difficult to replace? Then designing a compensation system that focuses on long term retention vs. short term incentives matters.

35/36: TL;DR: When an organization has a strong culture, everyone knows how work gets done and believes that the reward system aligns with the organization's values. The healthiest organizations attract people who like and reject people who disrupt the culture.

36/36: A natural byproduct of a strong culture is that employees who work in an environment that aligns with their own belief system are more likely to work hard and remain for the long haul. This is a key driver behind why culture eats strategy for breakfast!