Culture comes first

A foundation for success requires a leader’s vision, time and effort

Many of the headline events of the past decade and change — terrorist attacks, drawn-out wars, accounting scandals, the Great Recession and the too-slow reversal of the damage it inflicted — have tested our individual and collective values and instilled in many people a desire to bring more meaning to their lives.

That’s been the case, too, in the business world: Both workers and their leaders increasingly long to build a legacy, to work for something other than or in addition to material gain. Yes, results do still matter first and foremost, but leaving behind something of lasting value has become more important.

Good luck doing that without a strong culture to fall back on. Today’s most successful organizations have been able to instill a clear set of values to guide their people from top to bottom and in situations extraordinary and mundane.

And Mr. or Ms. CEO, that culture starts with you — and the answer to a simple question.

“People come to work for you because of the why,” says Dick Wallace, president of The Alternative Board of Nashville, who brings together and coaches groups of executives and business owners. “You need people to have a high level of engagement from your team.”

That calls for a big and regular investment from CEOs and other leaders in their organization. In that respect, entrepreneurs launching their latest concept have it easier. They’re in the starting blocks and — in addition to vetting their plans, finances and products — can more easily handle the repeated interactions needed to infuse new people with their basic beliefs. Tight leadership teams ramping up a concept often have an intrinsic understanding of how they want their company to behave. But once an organization grows to a certain size, it becomes exponentially harder to steer the ship with that small leadership cadre — and imperative to build a broader base that can fly the culture flag.

Nancy Everitt, CEO of health care network developer HEOPS, and the core team that helped her launch the company more than a decade ago knew their culture in and out. But as HEOPS’ staff grew in the middle of the last decade, they realized they needed to write it all down.

“We saw there were some things people just didn’t understand,” Everitt says. “When you have so many people coming in from different environments, the ability to translate things gets tougher.”

Talk requires action

This wasn’t about putting a mission statement on a meeting room plaque. Everitt’s aim was to build a structure that would translate HEOPS’ mission of bringing health care access to vulnerable populations into a behavior system that produced results, taught staff members new skills and rewarded them for the progress made. A series of gatherings crystallized the team’s philosophy and values into a set of seven core beliefs — no more than a few sentences each — that range from “Be a Hero” to “Do it Now” and “Deliberate Practice.”

“Talk without action is a dream,” says Everitt, an alumna of HCA and LifePoint Hospitals who eschewed venture capital in large part so she could better guide HEOPS’ pace of growth and thus its cultural development. “We knew we had to come away with something.”

Each Sunday night, an email lands in HEOPS employees’ inboxes. In it is a short discussion of the Core Belief of the Week, something the group will focus on even more than usual in the days ahead. That belief is followed up with a Mantra of the Day and one staffer is placed in charge of spreading the word that day, of injecting a booster shot of the idea into the organization’s grassroots.

Team leaders also will spend a few moments on the Core Belief of the Week in their standing meetings and honor a Warrior of the Week with very specific praise. But the culture is most effectively reinforced by the expectation that each employee detail the good work done by their peers in a shared file, linking the small wins of each day back to that Core Belief of the Week.

“We look for opportunities to call people out,” Everitt says. “We want our employees to pay attention to the good things happening.”

All employees also are expected to at least once a week brag on themselves a bit in the shared file. Everitt says some workers have a harder time than others doing that, but she points out to them that it’s another chance for them to show their value to their managers.

On the face of it, HEOPS’ system may seem a bit corny and forced, too heavy on the rah-rah. But Everitt is quick to point out that the company’s work is demanding, time-sensitive and intense. Any hokeyness disappears in the face of employees’ shared ownership of a mission of bringing health care access to people now outside of the system.

The shared file full of praise also is a chance for HEOPS’ people to earn their keep: Part of each HEOPS worker’s compensation is based on their cultural fluency and how they teach “the world of HEOPS” to their colleagues. Up to a quarter of their potential bonuses comes back to living the culture.

“Being an ambassador for the company is truly a differentiator,” Everitt says. “If it’s part of the pay structure, it is being measured and that leads to positive behaviors. As a smaller, emerging company, we can’t afford to not have every team member be completely engaged.”

In short, making the effort matters — both for employer and employee — and builds the bonds that add value for both sides. Marc Fortune, who built professional employer organization Century II into a regional player and now runs sales consulting firm Force Five, says culture “is the oxygen of a business.”

“Culture always starts and stops with the guy or gal on top,” Fortune says. “When you disregard it and push people to perform as if it’s a machine shop, you’ve got a chance of it blowing up.”

Authority with responsibility

For Evan Owens, CEO of Web design and development shop Centresource, helming a non-machine-shop environment has meant letting go of some of the reins. Under the tutelage of Centresource founder Nick Holland, Owens began in 2010 preparing to take over the top job. His first big move was to install a results-only work environment, a system of running a business that drops the logistics of narrowly defined workdays and time-off policies in favor of clear customer-focused metrics.

In short, ROWE — developed a decade ago by two women then working in HR at Best Buy — asks simply if the work has been completed to the great satisfaction of the client and in the timeframe it was promised. How and when it was done is of little to no importance but being a positive and productive part of a team does matter.

Implementing ROWE fits naturally both with the nature of Centresource’s tech work and with its predominantly young staff. But it also plays a key role in building the firm’s culture.

“People endear themselves to an environment that gives them freedom,” Owens said.

And people also will commit to a company that has committed to helping them grow. In 2011, Owens oversaw the launch of a badge system that rewards Centresource employees to attend events and showcase their knowledge via blog posts or being interviewed by various publications. Such activity elevates both the personal brand of the employee and Centresource’s overall stature and can grow into a nice cash bonus at the end of the year.

It also sends the message that Centresource’s top leaders trust their employees and will empower them to represent the company in different ways. Owens said he has seen leaders of other businesses delegate tasks to their middle managers without truly handing over the authority. The result, he says, is that those companies have well-paid administrators but that their leaders still have to spend too much of their time overseeing their reports as well as the people who report to those managers.

Owens is unequivocal about leadership and culture being his top priority. He says he now spends on average a full day per week on the topics, 10 times as much as he did in the first days after taking over as CEO.

“The biggest investment I can make is in our second-tier leadership,” Owens said. “In our business and any people business, if you only have a couple of heads, it’s very hard to grow beyond those people’s capabilities. There’s only so much you can do.”

To that end, Owens last year began to roll out a four-phase leadership education track for his staff that seeks to build second-level leaders — focused on growing roles rather than getting bigger job titles — who can transmit Centresource’s ROWE environment and broader culture across the organization. The process starts with a three-month period that lets new hires engage with the Centresource culture — a “fit in and buy in” approach that essentially is a reverse probationary period — before beginning to contribute to projects and being measured by the same metrics as others. A mentor is present throughout to advise and steer as needed.

Over time, employees looking to add to their responsibilities can step up to the “equip” phase. That includes a leadership-focused library curated by Owens that focuses on ethics and hiring practices. From there, budding leaders are empowered to take on projects that include managing some of their colleagues and becoming mentors themselves.

Five of Centresource’s employees outside of senior management — in all, the firm is home to about 35 people — are now in either the equip or empower phases. Owens says that breadth of empowerment has helped set up Centresource to comfortably grow to more than 50 people. And that growth will come on the company’s own terms and be built on a strong foundation.

“I used to play scared and look too much at what others were doing,” Owens says. “But I stopped comparing myself to others and stopped reading books about Zappos. Then we also stopped pantomiming what we thought our people were going to say about culture and just let them say it. It’s allowed our team to dictate our culture.”