There is something powerful in enduring lessons. For those of us who are passionate about building and being a part of a great company now, this means there are many reasons to (re)read Built To Last – Successful Habits of Visionary Companies by Jim Collins and Jerry Porras – which presents the shared design of visionary companies which have achieved great results over decades and multiple generations of leadership. While there is much to be learned from this book, below we focus on the lessons specifically related to building a winning corporate culture in successful companies – from understanding your values and purpose to implementing them in your hiring and succession planning.
When talking about core ideology, which includes the core values and purpose, it’s hard to believe that there is no “right” or “wrong”. Yes, two companies, which seem at the opposite ends of the spectrum like Merck (core value: in the business of preserving and improving human life) and Philip Morris (core value: defending the right to personal freedom of choice, including the freedom of choice to smoke) are both not only “right” but also on the leading edge of performance, supported by solid corporate culture in successful companies.
What these companies have understood and lived throughout the organization is “who” they are and “why” they exist, beyond making money.
Understanding “who” and “why” and then “living it” sounds simple – like “just be yourself” or “just do it” – but most companies don’t do this very fundamental thing. Rather, they do the opposite. What most companies do, often with the help of consultants, is define and communicate the “who” and “why” they believe would get the most approval and admiration from people, specifically from potential and existing customers and employees. And this leads to some fundamental problems.
As a thought experiment, consider for a minute what if a company’s core value and purpose were to make money and be number 1, or, less blunt, what if a company valued achieving certainty and significance? How would the company falsely claiming “we are customer focused” impact the organization? How would this incongruence impact the customers? Would they sense it? How would it affect what they wrote and said, versus did and promoted internally? What role would you play in such an organization? How would you feel about your role?
What we all know is that the more significant the incongruence, the greater the frustration and dysfunction in an organization. Trying to portray one value (which sounds good) while living another (which is genuinely held) is difficult and fosters cynicism. In the long term, this cynicism is toxic and results in low morale and high turnover in an organization.
We see this every day. For instance, we were recently presented with a costly turnover case at a company with an employee base of nearly 100,000 people, which we believe was caused largely due to incongruence. The case is very common and, like us, you may relate to it from your own experience.
The company management and HR team were (still are today) perplexed to find that after spending over 80 thousand hours and many millions on their university campus-recruiting program to hire top graduates, nearly 50% of these “talents” had left the organization within the first three years. In the exit interviews, the vast majority said the reason for leaving was that they “have decided to change direction,” which did not help the management and the HR team in understanding what was going wrong.
Now, we should say that without using any precise criteria, mostly this is a “good” company and the statistics for hiring “talents” or anyone else in any organization are staggering. However, considering the resources deployed by this firm (and many like it), the issue screams for attention.
What we find interesting is that in their campus hiring, the company positions itself as a global team, where there is an opportunity to move forward, to be recognized, and to work with smart and ambitious people who will respect the new talent’s views. In reality, this is truly a large, established institution, where people work on specific tasks over many years to eventually get the chance to move up the ladder, which has many rungs, to gain any meaningful responsibility. This is an environment where even those with two decades of experience have to navigate well to get recognized. And, very important to note, the company serves a client base that expects seasoned, prudent service. So a young, ambitious person with dreams of making a difference or being a superstar overnight will have to get in line and gain experience and build their network over time. Of course, that reality is much harder to sell on campuses to top graduates. So what is a firm to do?
While this is certainly not the only factor, we believe knowing the real “who” and “why” would help. (Translation: “Hey, you’re not a startup…you don’t have to pretend to be one.”) Understanding this would alleviate much of the incongruence in hiring, attract more suitable candidates, with aligned expectations, who have a genuine interest in being part of this established, interesting and evolving industry.
Now, beyond any young talent-recruitment program, visionary companies, after establishing the “who” and the “why,” work diligently with thousands of never-ending consistent actions to reinforce their core values and purpose. So, well after the ink is dry on the vision statements – if one is written – the visionary companies become visionary companies not by having a written statement, but by aligning all their practices: engaging with potential and existing employees, customers and any other stakeholders, in line with their values and purpose. This is a key pattern in the corporate culture of successful companies.
An outstanding example of clarity of values and purpose, and living it through consistent action, is Merck. Merck developed Mectizan, a drug to cure “river blindness” caused by a parasitic worm that swarms through the body and eventually into the eyes, painfully blinding a million people in the Third World. After developing the drug, Merck proceeded to deliver the drug at their own expense, since those affected could not afford it.
While taking consistent action day after day across the full spectrum of the business may sound like a lot of work, doesn’t it seem like a lot less work than maintaining a fake persona?
Following the importance of knowing who you are and why you exist and then getting on with actually living it daily, it’s not surprising at all that not everyone is going to fit (or wants to fit) into every organization. We are rather amused by the strong and vivid phrases used by the authors of Built to Last to drive home the point: visionary companies have “cult-like cultures” and those not suited or willing to identify and work under the established and demanding standards are “ejected like a virus!” – So politically incorrect! And so vivid with examples like the full and intense focus of Nordstrom on “service to the customer above all else,” the “fanatical control and preservation of Disney’s ‘magic’ at Walt Disney or the passion of Boeing to “eat, breathe, and sleep the world of aeronautics.” Would you belong in any of these organizations?
Having established the “who” and “why” and then living it – including attracting and hiring candidates who share the values and purpose of the firm automatically – leads to a pool of engaged colleagues with a deep understanding of what is sacred and core to the company and what is not. If people know and care deeply about what needs to get done, then they take time to make sure it will get done long after they have left the position, and succession planning is just a normal part of the stewardship – at every level of the organization, we add. With this understanding of what needs to get done (the core value and purpose), insiders have a full understanding of what can be changed – everything that is not core – and a great deal of insight into and alignment with the organization to get buy-in and successfully implement fundamental change. This deep ownership of mission and clarity of direction is what shapes a thriving corporate culture in successful companies.
To be a visionary company, start with knowing your core values and purpose, and reinforce them with never-ending, consistent action. Reinforce them by hiring people who are aligned with your organization, and support the people in your organization to grow and take leadership roles so they continue to foster the deeply held core values and purpose, with full flexibility to change everything else that is not core. This is the way the most successful visionary companies have moved forward. What could such a framework of knowing your “who” and “why” and taking consistent action do for your company’s corporate culture in successful companies?
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