If you don’t believe that developing your culture is both urgent and important, think again.

2008 was a tough time to be a supplier to the British public sector. The credit crunch (and doesn’t that term now feel quaint) left budgets frozen or cut altogether. As a result, many private sector firms went bust.

To survive, businesses needed two attributes. The first was a strong balance sheet. The second – and the one that is of greater interest to us here – was an outstanding culture.

At Corporate Punk, we have as our Board Advisor a CEO whose business services the public sector. We’ve known each other for years. Back in 2008, having read yet more doom­mongering in the press, I rang him to ask how it was all going. I feared the worst.

“Oh, it’s fine, mate. We’re doing well,” he said. Thrown, I asked why.

“I’ve decided that we’re just not participating in this recession.”

It’s worth pausing to reflect on the wisdom in that statement.

It’s also worth reflecting on what that business went on to achieve. When the credit crunch bit, and austerity bit even harder, it continued to prosper. In fact, in 2010 the company won the biggest single public sector contract of its type anywhere in Europe. That its balance sheet was strong enough to ride out the storm was part of the story. But the far bigger factor was the culture of the business. It was resilient, responsive and flexible. The business saw what was happening in the world and decided to buck the trend.

Now, does anyone fancy a chat about Brexit? There is a year to go until the new ‘transitional’ arrangements kick in. Yet the only thing that feels certain is uncertainty. Media narratives suggest that each of us is small, alone, and staring failure in the face. Bad news sells, of course. But prophecies also have a habit of self-fulfilling. Look at any recession, and ask the classic chicken and egg question. Does sluggish high street spending drive reports of consumer confidence collapsing? Or vice versa? 
 
In the context of Brexit, the media is not your friend. But consider this: as in 2008, while you can’t control Brexit, you can control whether you “participate” in it. And your ability to make good choices lies, once again, in your culture.

Here are two truths:

  1. Culture is a vital pillar of any corporate strategy. It is not a ‘nice to have’, and it is not a matter for flakes.
  2. Most organisations fail to recognise this fact. As a result, they do not manage and develop their cultures. This leaves them exposed to harmful forces.

Let’s start with the obvious question: why does culture matter?

Culture is the unwritten rules, narratives and ways of thinking that drive what gets done and how. It is the social order of a business.

Culture’s influence in every company is pervasive and unavoidable. Your business is no exception. Your processes, your organisational design, and your politics are expressions of your culture. Thus the decisions that you make as a result of these things are also expressions of your culture. And decisions produce outcomes, which in turn reinforce your social order. In an important sense your business is a machine, and these days machines can and do learn.

It might be helpful to think of culture as the core operating system (OS) of a business. You might visualise it as the myriad I/O switches that determine why some things happen fast and other things crawl along or don’t happen at all.

Your OS will predict how your company perceives competitive threats, and economic upheaval. Whether your people lean into problems and remain open to leadership. Whether they have the courage to be inventive in the face of difficulties. Whether you participate in the next recession.

It might be helpful to think of culture as the core operating system (OS) of a business. You might visualise it as the myriad I/O switches that determine why some things happen fast and other things crawl along or don’t happen at all.

Over the last decade, Amazon has provided a useful example of good culture in action. As we all know, it’s pivoted out of books to dominate an array of retail categories. It has also penetrated unrelated markets like web services. There are lots of reasons for this – but a responsive and resilient culture helped. As Forbes noted, “[the belief that] every team needs to be small enough for two pizzas has allowed it…to be agile”.

The exact opposite was true of Jungle.com. Remember Jungle? It was a contemporary of Amazon, and a retailer with an identical proposition. Failing to be resilient, responsive and flexible, it vanished into obscurity.

Compelling research[1] also exists to support the case for culture. Over a decade, firms with performance­-enhancing cultures enjoy 682% revenue growth on average. In contrast, firms lacking a performance culture show average revenue growth of 166%. Stock price growth is even more stark when measured over the same period: 901% versus 74%.

This is what Drucker meant when he said “culture eats strategy for breakfast”.


So why do businesses fail to manage their culture?

Our experience at Corporate Punk suggests that there are four main reasons.

The first is that most companies lack a language through which to describe their culture. If you cannot describe something, you will struggle to manage it: we live our lives in language. (It bears mentioning here that we are not talking about vision and values. Not in isolation, anyway. BHAGs and a collection of desired behaviours can influence the OS but are far from the whole story.)

Over a decade, firms with performance­-enhancing cultures enjoy 682% revenue growth on average. In contrast, firms lacking a performance culture show average revenue growth of 166%.

The second reason is that it has been tough for businesses to quantify their cultures. Let’s not get blinded by employee engagement and pulse surveys: they don’t measure culture. This is because they fail to describe how a company functions in a way that predicts outcomes. In a cultural assessment context, if it isn’t predictive, it isn’t useful. (What’s more, the way that such surveys usually collect data also isn’t reliable. They don’t measure non­conscious perceptions, which are what drive people’s behaviour.)

The third point of failure is a sort of misplaced understanding of the role and power of leaders. Make no mistake: leaders are important. They set context, they set direction, they inspire. (Or at least they should.) But it’s wrong to suggest that leaders are wholly responsible for company­wide problem solving.

The canonisation of entrepreneurs in the business press doesn’t help this narrative. The media venerates, say, Mark Zuckerberg for Facebook’s success. But this ducks an inconvenient truth. Facebook is the sum total of the efforts of its entire workforce, past and present. Leaders matter, but they are nothing without their followers. Culture is the OS through which leaders and followers collaborate to solve problems. Or not.

The lack of serious people working in culture change has fostered the notion that it’s a fringe issue. Cue ‘away days’, superficial initiatives, and a total lack of Board interest in the subject.

Together, a lack of language, data and leadership drive cultural neglect. Or (and this is as bad), culture ends up relegated to well-meaning but often disempowered HR folk.

In an attempt to get serious, said HR folk often seek help from a range of available third parties. (Branding consultants, trainers, management consultants, culture change ‘specialists’…take your pick.) But too often their work fails to go to the heart of the problem or be effective enough for change to stick.

Culture change is a mature category, but it is not characterised by excellence. And this brings me to my fourth point. The lack of serious people working in culture change has fostered the notion that it’s a fringe issue. Cue ‘away days’, superficial initiatives, and a total lack of Board interest in the subject.

Yet an operating system determines how, and how well, a machine runs. It determines what, how and when tasks happen. When events occur, depending on the quality of its programming, it will either crash, or it will not.


What are the core characteristics of successful 21st century business cultures? At Corporate Punk we have spent years researching them. When you boil it down, their operating systems boast three strong attributes.

Aligned agendas is the first. Does everyone in the company know the direction of our business and what they need to contribute to it? Are they equipped to deal with the tensions that are inevitable in achieving those goals?

The second characteristic is creative capabilities. Can everyone in the company solve problems? Can they generate and critique ideas? Can they imagine, make and deliver the changes that growth depends on?

The third is leadership behaviour. Are leaders spending enough time establishing the right context? Do they champion processes that foster agile but rigorous ways of working? Are they developing flexible structures? The momentum created by leadership behaviour can be either positive or negative. And we all know what happens when you multiply a positive by a negative number.

Bring these things together, and you arrive at a simple formula.

Sounds simple, right? But most businesses create the precise opposite of these conditions. Their cultures foster misalignment, trample creativity, and fail to enable good leadership. The type of OS that this behaviour breeds makes complex organisations complicated ones. This is a context in which turning even basic concepts into reality can feel impossible.

But now some good news: it is possible to measure how well a company’s culture is delivering on this formula.

Nine different psychological factors underpin those three characteristics. Using them, you can measure, benchmark and track the cultural performance of any firm.

The outcomes of doing so can be profound. Imagine being able to put a useful language around your culture. Imagine having hard data that shifts conversations away from opinion and into fact. Imagine being able to compare the characteristics of different teams, tiers, or markets. Imagine the money you can save on ineffective interventions. Imagine the money you can make through laser guided ones. And imagine how doing so equips your business to outgun the competition.

At Corporate Punk we work with corporates and start­ups to benchmark their cultures. Using this data, we help our clients to energise and channel their teams. The extent to which a firm leans in to the culture question predicts its ability to thrive. What’s more, it predicts its ability to thrive when the market turns malevolent.


The word that you might now be grasping for is ‘when’.

As in: ‘when is culture going to become a priority for us?’

‘When is fostering resilience, responsiveness and flexibility going to become a core goal?’

‘When are we going to take those vital steps to future proof our firm?’

Last year, in the HBR, Martin Sorrell of WPP said that “culture is the excuse people give for not doing what we want them to”. To which the only reasonable response is to let Sir Martin’s latest results speak for themselves.

Imagine being able to put a useful language around your culture. Imagine having hard data that shifts conversations away from opinion and into fact. Imagine how doing so equips your business to outgun the competition.

Make no mistake. Creating a culture that fosters organisational dysfunction is a grotesque indulgence. (For proof, take a look at your annual salary bill.) And that’s the best case scenario; at worst, such dysfunction is suicidal.

There is now one year to go until Brexit enters the next phase. In growth terms, the UK economy is the weakest in Europe. There is ample evidence to suggest that harder times are on their way. In any event, the winds of change are blowing. Is your business going to develop a culture that harnesses them? Or is it going to allow those winds to blow it apart?

Will you be “participating in this recession”?

At Corporate Punk, we develop impact cultures that revolutionise inventiveness, happiness and growth. If you’d like to know more, drop us a line at office@corporatepunk.com.

[1] Corporate Culture & Performance – John Kotter & James Heskett.

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