2020s: The beginning of a culture-first decade

Feb 27, 2020

In 2012, Google began Project Aristotle in its quest to build the 'perfect team’. They created a task force of their best statisticians, psychologists, researchers, sociologists, and engineers to look at 180 active teams and interview hundreds of employees to measure every aspect of their lives – from the teammates they socialize with, to how often they eat together, their education backgrounds, hobbies, and natures. No matter how these pundits arranged the data, they couldn’t find any strong patterns – some teams celebrated birthdays, while others got right to business.

As Google’s finest struggled to find the ‘who’ part of the ‘what made some work groups thrive over others’ equation, they found a common denominator: group norms. The dictum was: team members individually may behave differently – they may be deviants willing to ruffle feathers or chafe against authority or maybe conformists – but when together, the norms of a group override individual proclivities. A team’s culture expressed through common norms and shared beliefs defines how a group functions and has a profound impact on its performance. Perhaps, this is why high-performing organizations place workplace culture at the heart of their strategic priorities.

Business benefits of culture are real

With the power to be a lasting source of competitive advantage, a strong company culture can drive revenues through the roof! Clever product positioning, superior strategy, better skills, and talent – they all serve, but a festered culture can eat even the best of strategies for breakfast. A culture-first board room doesn’t have shareholders’ profits as its ultima Thule. It recognizes that when you get the culture right, other schemas – ‘owning’ the customers and building a lasting brand – will crystalize on their own.

  • The latest Glassdoor research shows that publicly-listed companies ranking highest in workplace cultures outperformed the S&P 500 by 209% between 2009 to 2018.
  • Intangible assets like culture provide three times higher market returns to companies, records Forbes in its annual list of 100 Best Places to Work (2017).
  • Seven in 10 executives surveyed by Deloitte (2016) expressed company culture, especially transparency in communications, will be critical to realizing their organizational missions.

A growing interest in culture is an extension of the people-first revolution that focuses on building a workplace with a sense of belongingness. The coming decade will belong to the culture-first organizations, redefining why they do what they do, as they take on epoch-defining challenges. Consider these archetypes.

Savants who got it right…

  • Zappos builds its teams around 10 core values that take pride in giving employees control over their work situation. A member of Zappos would apparently just be following the protocol when she sets a record of a 10-hour customer call, away from the average annual handle time metric traditionally followed at call centers. “There is really nothing that a representative can’t do,” says Tony Hsieh, the company’s CEO. Being culture fit is a sine qua non for Zappos – then may it mean passing on the smartest talents. It all starts with ‘cultural fit’ interviews taken by HR after the hiring team validates a candidate on skills. To not bind unwilling employees, Zappos even offers about $4,000 in the first week to new recruits to walk away from the company. When employees’ individuality aligns with organizational values, it’s no surprise that 75% of Zappos orders come from repeat customers.
  • Bain & Company, consistently topping the charts in Glassdoor’s and Forbes’ ‘best places to work’ rankings, assumes its cultural identity with the motto of ‘A Bainie never lets another Bainie down’. The focus is to offer psychological safety – a shared belief that the team is safe for risk-taking. In addition, the company complements this team spirit by inspiring employees to ‘build their own Bain’, encouraging their distinctive styles and individual crafts.
  • HubSpot, ranked as the ‘No. 1 Place to Work in 2020’ by Glassdoor, takes comfort in transparency. Its default culture is to share anything it legally can - from clients its people are in touch with to cash balance. Buffer is another organization that has put a default on transparency in its organizational values. It has the concept of open salaries: from the CEO to an assistant, the salary of all is accessible to all. It views the practice as the means to share every new idea or direction with employees early on.
  • Amazon, named among the most desirable places to work by LinkedIn (2019), has a ‘two pizzas’ rule for team composition, and encourages conflict. The rule is simple: every team should be small enough to be fed with two pizzas. As for conflict, for Amazon the trade is between not debating and compromising, and optimized decisions. It chooses the latter.

When teams work best with robust workplace cultures, is there one right culture every organization can aspire to inculcate? The answer is no.

Culture cannot be copy-pasted

Forging algorithms where real workplace connections can form, and scaling them depends upon your core values (why you do what you do) and how those values mesh with your mission (what you do). While it’s for every company to define its core values, here are two behaviors, expounded by Project Aristotle, which are shared by successful group cultures:

  • Conversational turn-taking – Retaining group’s collective intelligence
    In good team cultures, members roughly speak in the same proportion. The phenomenon is referred to as conversational turn-taking. The idea is that if only one person in a group speaks all the time, the collective intelligence of the group tends to decline.
  • Average Social Sensitivity – Spotting non-verbal cues
    It’s about being skilled at intuiting how others feel. Groups with high social sensitivity know when a member is feeling left out or upset, and this leads to higher integration and understanding.

Why 2020s will belong to culture-first organizations?

As commerce becomes global and complex, old ways of managing people are rigid for modern marketplace and workers’ expectations. Success is continually becoming team-based. A study by Harvard Business Review revealed the time spent by managers in collaborative activities has swollen by 50 percent or more. This is making the shift to culture-first a business imperative. Some factors driving this change are:

Managing across generations

Workforce composition today is very different from the past. Gen Z is already entering the workforce, millennials constitute over 50 percent of it and baby boomers are working longer than usual – into their 70s and 80s. Each generation comes with its distinct characteristics. The need to manage across generations will necessitate intelligent teamwork.

Premiums aren’t everything

Millennials and Gen Z care deeply about where they work. They are seeking more meaningful workplace experiences. Compensation is no longer a watertight method to keep your younger workers in their seats. Only 38 percent of Gen Zers compared to 41 percent of millennials said they would leave a job because of low compensation (Gartner, 2018). Organizations will need to prioritize culture to connect to a purpose beyond profit.

Primacy for career development

The biggest draw for both millennials and Gen Z is the opportunity for career progression and learning opportunities. Companies looking for a career commitment from these generations will need to offer invigorating workplaces in return. If leveraged in the right manner, this attitudinal change can prove to be a long-term strategy for organizations in finding and retaining top talent and improving productivity.

Communication in gig economy

Optimal communication and collaboration are becoming hard to achieve with a workforce that is dispersed, global, and mobile. A significant portion of employees is temporary workers, contractors and freelancers. Tapping this talent from across geographies, especially developing markets where their percentage is highest (BCG, 2018), can be a competitive differentiator for businesses. Managers and HR need to effectively blend their permanent workforce with gig workers, which demands a highly harmonized communication strategy.

Culture, in this mutating milieu, gives organizations a sense of semblance, an identity – through shared values and beliefs. Capitalizing on these changes and getting the best out of new age workforce demands an inventive talent strategy and putting premiums on culture.

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