What is “Good Work Culture”?
There are a wide variety of definitions of what “good work culture” entails. Culture is often described as "the way we do things around here." But according to Jessica, the truth is that “the way we do things” doesn’t even come close to encapsulating a good workplace culture. A myth persists that culture is synonymous with “perks,” such as nap pods, kombucha on tap, or unlimited snacks. This is incorrect, in her view. “Good” culture is something more profound and comes from when people genuinely care about their work. It's a culture where individuals are deeply invested in their roles, driven by a sense of purpose and a desire to contribute. But how does one operationalize, measure, and scale this set of desired behaviors? Well, an equation exists that, when applied intentionally, can build a culture that recruits, retains, inspires employees, and drives profitability. Jessica calls this “The Culture Equation.”
The Culture Equation
The Culture Equation is Organizational Purpose + Strategy, powered by Culture. Purpose represents the “why,” Strategy represents the “how,” and Culture equals “the results/outcomes” in this equation. Today, a disconnect exists between where leaders generally invest their time and the areas that they believe truly impact business results. A recent Culture Partners study found that when 30,000 leaders were asked to identify where they dedicate the majority of their efforts to improve business outcomes, 74% of leaders said they tended to focus on strategy, with only 26% acknowledged the importance of work culture. However, when the same leaders were questioned about what holds the most impact on business results, the leading answer was culture. In fact, 96% of leaders recognized the importance of culture on business results. This contradiction between where leaders invest most of their time and what they actually perceive as moving the needle on business results sheds light on a harsh reality: even the most brilliant strategy remains nothing more than ink on paper without a thriving culture to breathe life into it. Additionally, many leaders are unsure if their employees are even aware of the company's strategy. This poses a significant challenge. In a study conducted by Stanford University, 243 companies spanning diverse sizes and industries were analyzed. The research delved into their financial records, culture, strategic plans, and mission statements. With a specific focus on a three-year period covering the onset of the COVID-19 pandemic and subsequent years, the research sought to uncover which factors had the most significant impact on revenue growth. The most compelling insight to emerge from the Stanford research is the power of organizational alignment. Companies that successfully align their purpose, strategy, and culture are the ones that experience the most substantial revenue growth. This leads to Jessica Kriegel’s Culture Equation.
Purpose + strategy, powered by culture = results.
The three elements that play a role in The Culture Equation (purpose, strategy, and culture) are all equally vital. In the same Stanford research study mentioned above, it was found that companies lacking alignment in these three critical areas saw their revenue increase by only 10.7% over the duration of the study. Compare this growth to that of organizations that managed to align their purpose, strategy, and culture. During the same time period, the revenue of these organizations grew by a staggering 44.5% – a 4x increase. So how can organizations actually use TheCulture Equation to power their businesses and drive profitability? To find this, let’s take a look at each part of the equation.
Purpose
Purpose is a word often thrown around in the world of business. But do we truly understand its significance within work culture? An organizational purpose guides a company's journey, providing direction to its mission. Furthermore, a well-defined purpose resonates with both customers and employees, fostering trust and loyalty while setting the stage for long-term success. Purpose alignment between employees and the organization is even more potent than “culture alignment.” Culture alignment can sometimes devolve into a quest for fitting in, while purpose alignment unites individuals through a shared passion to create a meaningful impact.
Strategy
In the realm of business, the term "strategy" often takes center stage. Too often, even in larger companies, the strategic plan exists primarily in the minds of executives and is not shared across the organization. This lack of a written-down strategy can lead to confusion and misalignment among team members. The Culture Equation Model, designed to provide clarity to organizational strategy, can help rectify this. To start codifying an organizational strategy, organizations must consider the following questions:- Why does your organization exist?
- Where is your organization going?
- What are your long-term priorities?
- How will you measure success?
- What shifts are needed for your success?
Results
Culture amplifies an organization’s purpose and strategy. But it's important to remember that results are the ultimate objective of the Culture Equation. C-Suite and leaders constantly strive for results, whether that means boosting customer satisfaction, retaining top talent, increasing revenue, or achieving competitive differentiation. But while actions like restructuring, strategic planning, and hiring are important, they're only part of the equation. To truly transform culture, an organization must also focus on influencing the way people think.The Results Pyramid
To support this, Jessica recommends adopting a model called the “Results Pyramid” that simplifies the complex process of influencing how people think and act within an organization to achieve transformative results. The Results Pyramid represents the interplay between results, actions, beliefs, and experiences that shape our behavior.
Peak of the Pyramid: Results
At the top of the Results Pyramid stand "results." In the context of business, results are the ultimate purpose, whether it's achieving a financial target or realizing a strategic goal. However, many organizations fall into the "action trap," where they solely focus on actions to achieve desired results.
The Action Trap
The action trap is a cycle of relentless actions followed by result evaluation, leading to a never-ending loop of trying to do more to achieve better outcomes. This approach often leads to micromanagement and burnout, with employees feeling disconnected from their work.The Power of Beliefs
To break free from the action trap, organizations must delve deeper into the pyramid to understand the driving force behind actions: beliefs. A person’s beliefs about work, colleagues, and themselves influence their actions. But where do beliefs come from? Well, beliefs are shaped by experiences. A person’s experiences, especially during formative years, shape their beliefs about the world. This is why it is essential that employers craft intentional experiences for employees that influence positive beliefs. Three examples of how employers can influence positive beliefs include:- Storytelling: Stories have the power to change beliefs. By sharing narratives that connect actions to results and beliefs, organizations can inspire employees to care deeply about their work.
- Feedback: Providing feedback that links actions to beliefs and desired results creates a culture of continuous improvement. Specific, meaningful, and timely feedback is the key to nurturing positive beliefs.
- Recognition: Recognition is an effective way for employers to reinforce positive beliefs and behaviors. It involves acknowledging employee actions that align with desired results and cultural values.
