Aleksandar Savic

Most companies espouse an official corporate culture. We studied nearly 700 large corporations and more than 8 in 10 published core values on their websites. Core values are ubiquitous — but unfortunately, in most organizations, core values are also irrelevant. When we analyzed more than 1 million online job reviews, we discovered virtually no correlation between the values the companies emphasized and how highly employees rated them on these supposed core values.

Only a handful of companies, which we call the Culture Champions, buck the trend and consistently walk the talk of their espoused core values, according to employee reviews. In a series of podcasts, we have spoken with leaders of several of these companies, including HubSpot, the Lego Group, Bain & Co., Hermès, and Cummins, to understand how the leaders embed core values and leadership expectations throughout the organization.

1. Involve employees in articulating core values to ensure authenticity.

Managers sometimes cherry-pick cultural elements from other companies and attempt to impose them on their own organization. Unfortunately, those values are often divorced from organizational realities and fail to resonate with employees.

“You can’t copy and paste values across organizations,” said former HubSpot chief people officer Katie Burke. “People will say, ‘I love Netflix’s view on high performance. … I love Amazon’s solve for the customer. … I’m going to form a company, and I’m just going to pull four of those favorite values.’ And what people are missing is, does that even resonate with your business model, what you’re trying to do, your ambition, the character of your executive team? Those things have to align. … Employees can sniff out a lack of authenticity or that disconnect faster … than a speeding bullet.”

A better approach is to include employees in the process of surfacing and articulating values to ensure that they’re rooted in the company’s distinct history, leadership style, size, location, and other factors that shape corporate culture, Burke advised.

Read the full article, “How to Walk the Talk on Culture: Former HubSpot CPO Katie Burke.”

2. Enlist volunteers to embed culture throughout the organization.

A bottom-up process is a powerful way to not only articulate leadership principles but also embed them throughout the organization. “You need buy-in,” said Loren Shuster, chief people officer at the Lego Group, and “there’s only so much you could do at the top of the organization.” You need as many employees as possible to be truly committed to upholding the organization’s purpose and executing the strategy, he said.

As the Lego Group evolved its culture, Shuster asked for volunteers from 1,200 teams within the company to serve as “playground builders.” Those volunteers didn’t need to work in HR or be the most senior person on their team. “We said, ‘Whoever is interested in shaping the leadership culture of the Lego Group for the next strategy round, please raise your hand.’ And then those individuals became a community,” Shuster said.

The Lego Group brought the playground builders together, introduced them to the company’s leadership principles, and trained them in facilitation skills. Then those individuals went back to their teams and started the discussion around the new leadership model, Shuster explained, tackling topics like what bravery means for a consumer services team in China versus a store associate team in a shop in the U.S. The leadership behaviors were particularly crucial elements in discussions about difficult trade-offs between, for instance, sales targets and environmental impact, Shuster said.

But volunteering to be a playground builder is not a one-way street, Shuster explained. The company’s promise to employees: “If you do this, you’ll learn new skills, you’ll be able to engage differently, and then, hopefully, you could advance your career on the back of that,” he said.

Read the full article, “How the Lego Group Built Culture Change: From the Ground Up.”

3. Coordinate your people processes to reinforce cultural values.

A common feature among the strong cultures we’ve studied is that leaders use their people processes as tools to reinforce desired values and behaviors. Recruiting and training, for example, are not only deployed to hire great talent and build skills but also to reinforce corporate culture. These people processes are most effective when they heavily involve leaders who embody the desired culture.

“You [must] have your senior team, your people who embody and manifest your culture, also involved in how you pick people,” said Manny Maceda, worldwide managing partner emeritus and chair of Bain. “It continues to be part of my responsibility as a partner, and even as a CEO, to get involved in recruiting the highest-potential people as they’re coming up, because that’s the only way you can actually make culture feel different.”

Training is another powerful opportunity, Maceda explained. “We very rarely outsource training,” he said. “By and large, all our internal training programs at each level are also done by our leaders — manager training, partner training, senior partner training, new consultant training. It’s done by the team. … Those training programs become important cultural reinforcement.”

These people processes are most powerful when they are deployed in a coordinated fashion. Bain’s suite of tools for bolstering culture, Maceda said, includes statements of values, compensation, promotion systems, training systems, and informal reinforcements like awards. All of those approaches align to collectively reinforce the company’s core values.

Read the full article, “Building a Consistently Excellent Culture: Bain’s Manny Maceda.”

4. Use core values as a framework to make key business trade-offs.

For Sharon MacBeath, group human resources director at Hermès, one of her first initiatives after joining the luxury fashion company was a leadership program for senior managers called Leading With Art. “Leading With Art was a lot about dialogue with tradition,” she explained. “How can we stay within the culture of the company and at the same time make sure we’re moving forward, make sure we’re anticipating the way societal expectations and the world [are] changing?”

Alumni of the Leading With Art program are trained to facilitate discussions with their teams to “pursue the conversation more deeply into the organization, with a view to continuing to transmit — to pass on — the culture, our values, [and] our ways of working to the people that have joined,” MacBeath said. “There’s more agility, I think, in counting on people than there is in counting on process and structure in times of rapid change.”

These leaders will structure their discussions around how Hermès’s values can help teams manage key tensions and trade-offs. As MacBeath explained, “We’re being confronted with apparently contradictory demands. … We have to [achieve] the quarterly results, but we also have to continue with our long-term strategy. We have to find local solutions, but we’re in a global organization. … We need to make sure we’re industrial and craftsmen at the same time. This is an opportunity to take some of those recurring themes and have the conversation around those.”

Read the full article, “Transmitting an Unwritten Culture: Hermès HR Leader Sharon MacBeath.”

5. Provide basic skills training on how to have critical conversations.

Encouraging constant debate helps organizations navigate uncertainty, but it can be hard on leaders: They must listen to a continuous stream of critiques, manage emotional debates that can boil over, and avoid taking negative feedback personally. Jim Whitehurst, former Red Hat CEO and IBM president, helped build these leadership skills with his team at IBM by introducing a framework to help structure and lead difficult discussions. All people managers received training on using it.

Reframing feedback can be a particularly powerful way to help leaders have critical discussions, said Whitehurst, who currently serves as executive chair at Unity Technologies and as a managing director at Silver Lake. At IBM, he broadcast his view that “if you say something and people just kind of nod or don’t argue with you, that’s the biggest insult. It means they didn’t think it was worth arguing with you about. And there’s no way you’re going to say something that people are going to say, ‘That’s perfect.’ That just doesn’t happen. So the worst you can do is not garner [some] kind of criticism, pushback, or some degree of debate, … [and] you should feel good about pushing back because you’re actually complimenting somebody [by] saying, ‘This is worthy of my time to kind of criticize and debate.’”

Read the full article, “Five Tips on Avoiding ‘Terminal Niceness’: Former Red Hat CEO Jim Whitehurst.”

6. When someone is a poor cultural fit, recognize it and address it.

Few companies are more intentional about building and maintaining corporate culture than Cummins, a manufacturer of diesel engines and integrated power systems. “You want to give people the ability to self-select out,” said Marvin Boakye, the chief human resources officer at Cummins. “This kind of culture is not for everyone. … So if someone is in one of our development sessions and says, ‘You know what? This has really been helpful; I’ve realized I don’t know if this is for me,’ that is also a success for us.”

“We have had people self-select out, and we’ve also selected people out when their behaviors … have not matched with what we believe is important,” he explained. “You know, when we’ve had situations where we had to say, ‘This is not working,’ most of the time, it’s not been based on their ability to achieve results. It’s been based on how they go about doing it within the organization. And we make that very clear.”

Read the full article, “How to Make Culture a Strategic Imperative: Cummins CHRO Marvin Boakye.”

Want to hear more advice from these leaders? Watch the entire series on the CultureX YouTube channel, on Spotify, or on Apple Podcasts.

The post "How Leaders Champion Culture: Six Essential Lessons" appeared first on MIT Sloan Management Review