Note: This article is part of our ongoing series based on some of the 200-plus interviews by Walton College Dean Matt Waller for his BeEpic podcast.
My favorite definition of organizational culture comes from a 2015 article posted to Fortune’s online edition. Geoff Colvin, a senior editor for the magazine, described culture as, “the way people behave from moment to moment without being told.”
I like I because it’s short, simple, and accurate, and because it doesn’t make the mistake of describing culture only its best forms. Culture can be toxic or healthy, but it always involves behaviors (good or bad), time (it doesn’t stay the same), and personal choices (leaders can’t dictate or control it).
The role of leaders when it comes to culture is to define it and influence it – with their own behaviors and by supporting policies and strategies that feed what they are trying to grow.
And what are they trying to grow?
When Walton College Dean Matt Waller talked to guests on his BeEpic podcast, the CEOs offered a range of examples of “good” culture, with most of them tied to a common theme – they connected to the organization’s values.
1. It goes beyond the workplace.
One of the pivotal moments in John Roberts’ career with J.B. Hunt Transport came when he was given an unexpected promotion to lead the new Dedicated Contract Services Division. The outside team that had been hired to create the division left in a dispute with senior management.
Roberts was on a family vacation when the CEO called with his new assignment and to tell him a plane was on the way to pick him up so he could start immediately. But before Roberts accepted the challenge, he talked it over with his wife, because he knew the move would have a huge impact on her and their young family.
Roberts, now the company’s CEO, says the founders and other top leaders have always emphasized the importance of family, so his delay to consult with his wife was a cultural norm. And he works hard to promote that aspect of the company’s culture.
“I’ve often asked people about what else (they’re) doing,” Roberts said. “How are your kids? Are you coaching? Are you going to your dance recitals? Because I believe that if you’re happy at home, you’re going to be able to do better work for us here. Frankly, if homes are not super happy, it’s probably going to translate (to work).”
2. It’s led from the top down.
Stan Zylowski sees culture as the “lifeblood of everything at Movista,” so his job as CEO is to nurture the company’s culture.
“We have a very, very firm grasp on who we are, what we are willing to do, and what we’re not willing to do,” he said. “And you know, as (co-founder) April (Seggebruch) alluded to, we hire for culture, we fire for culture, we coach for culture, we promote for culture. It’s the only way I’ve ever known how to be successful.”
Kurt Green, president and CEO of Vetsource, echoed that approach and said the culture that’s establish by leaders in startups is foundational once the company begins to grow.
“We think deeply about culture,” Green said. “In the early days, the culture is often a reflection of the leaders and there’s just a handful of people and you’re all kind of together all the time. But as a business grows, having a strong culture really unites a business in ways that I think doesn’t happen automatically.”
3. It’s modeled by executive leaders.
Executives also model the culture they want, in part by how they choose to lead.
For example, when Claiborne Deming was named CEO of Murphy Oil, he initially thought he needed to lead in the tough, old-school style of his mentor and former boss. But he soon realized it was more important to lead in the style that fit his personality, which also happened to model the culture he wanted to see in the company.
“I’m a nice guy, I have very high standards,” Deming said. “But I like people and I'm gonna express that gratitude, and thanks, and appreciation and not be this hard-nosed guy. So, literally that day, I went to the office and my whole demeanor changed. And I was much more supportive. … That change literally helped set the culture and changed our company. We became more collaborative, we became closer friends, we relied upon each other more, and we knew that we could take care of each other.”
4. It’s supported by top leaders.
Doug Parker, the CEO of American Airlines, said his leadership team’s role in creating the right culture is to support their employees.
“Their job is to give the frontline team the tools they need to go to do the jobs that they do so well,” he said. “To be servant leaders who are making sure that we are creating an environment that allows our frontline team members to go take care of our customers, and that’ll take care of our shareholders.”
5. It drives innovation.
One of the best indicators of a healthy culture is found in the way the company innovates, because innovation requires so many of the qualities that leaders want to see lived out by everyone in the organization.
Thomas Faust, Jr., CEO of Eaton Vance, said the investment firm became known for its innovative approach in large part because its culture encouraged the things that lead to innovation. This played out in his decision not to have chief innovation or chief risk officers.
“Innovation, risk − these are such core concepts to the management of an investment firm,” Faust said. “We didn’t want to silo those and make those the special areas of attention for a few people. We wanted to build and maintain a culture and have an organizational structure which understood that that’s everyone’s responsibility.”
Jonathan Thompson, CEO of Nielsen-Massey Vanillas, said it’s important to ask questions and even more important that asking questions is a cultural norm. He’s particularly fond of asking “why” at least five times when in search of the root cause of an issue.
“I find that the questions can be the huge unlock for not only driving the business forward, but actually culture,” he said. “And creating a culture where no one feels that there’s a taboo, that you can’t ask a question, is immensely vital, particularly if you’re an innovation business.”
Earlier in his career, Thompson led a team assigned to turn around a struggling division that lacked a culture of innovation and collaboration.
“I remember walking into a meeting and there was no spirit in the air,” Thompson said. “People were working on things and they didn’t really know why.” So he began “asking some basic questions and inviting people that normally didn’t have a voice around the table to weigh in on it, even though it wasn’t in their lane. A couple of meetings of that, and we started to get this amazing collaboration going, and a culture of asking questions and asking why and trying to understand how we drive the business forward.”
6. It reflects shared values, not just the leader’s values.
As a family-owned and family-run business, the Nabholz Corporation naturally leans heavily on the values of its founder, the late Bob Nabholz, and its chairman emeritus, Charles Nabholz. One of those values is integrity, and Charles Nabholz stressed that it’s never been enough for just the founders and other top leaders to live out that value, especially as the company has grown.
“We’ve had some honors from all different areas within the construction industry, but those honors wouldn’t mean a thing to us if our reputation for integrity was ever destroyed,” Charles Nabholz said. “And I feel like everybody working for our company feels the same way. It’s a very important part of our corporate culture.”
7. It creates a competitive advantage.
Charley Boyce bought Paschal Air, Plumbing & Electric and as president has helped it grow from a local company to a regional service provider. He sees the culture – how they conduct themselves, how they talk to each other, how they talk to customers – as a “virtuous cycle” that creates a competitive advantage for the business.
“In a service-based business like ours, not a whole lot of what we do is proprietary,” he said. “Everyone can go buy trucks. Everyone can hire people. Everyone can do what we do. We just offer a service. Making sure we have happy customers and happy employees, I mean, that that is what is differentiating in our market. If we’re delivering on both of those fronts, you know, the company is going to be on good footing, and we’re going to we’re going to keep growing.”
Faust, Jr., agreed that the right culture results in behaviors that separate a company from its competition.
“It’s important to have a bit of a culture of impatience with bureaucracy and an understanding that we need to make decisions quickly and that we have to make smart decisions, risk-considered decisions,” Faust said. “If we can get to the right decision more quickly than competitors, that creates enormous competitive advantage.”
