BP may have plugged the leak in the Gulf, but the damage done to it’s brand will take years to fix. Interbrand’s recent rankings shows that BP has fallen off the list of the world’s 100 top brands. Brand measurement firm General Sentiment estimates the loss to BP’s brand value at an estimated $1-billion.

The public pummeling of BP is because BP has been caught in a made-up lie. BP promoted themselves as being “Beyond Petroleum” and their messaging suggests they stand for for energy and reliability but they didn’t live up to that. In fact, BP’s track record is an embarrassment with significant spills, explosions, fines and warnings.

What can we learn from this?

1. Public pummeling and loss of customer, shareholder and community support is greater if you promote yourself to be one thing and then don’t deliver.

2. Get your company values and actions/behaviors into alignment in order to reduce your risk to brand reputation, revenue loss and other liabilities.

We humans have a built in system for detecting incongruence within other people. When someone says one thing but their behavior suggests another then we register that incongruence or gap. Sometimes we’ll say “something doesn’t smell right or my gut tells me not to trust this person.” Whether we are aware of it or not, we generally follow our instincts and that keeps us out of trouble and away from people who can do us harm.

When a company doesn’t live up to the values they promote they are viewed as inconsistent and disingenuous. This inconsistency causes credibility gaps that leak, creating serious risk to the brand and, as the case with BP, real risk to people’s lives and the environment.

What should you do if you’re with a company where what the company says it stands for is in stark contrast to what you deliver?

Ask yourself:

• What is likely to happen if the inconsistency continues?
• How would that outcome effect you personally, your family, your community and other things you value or depend on?
• Are you willing to live with that?

If you’re answer to the last question is “no” then here are the steps to get your company onto a path of positive corporate awareness and into values-to-behavior alignment.

1. Revisit or define your company’s core values.
2. Identify the actions (behaviors) that demonstrate a commitment to the core values and communicate them widely.
3. Conduct an audit to determine the gap between current behaviors and the desired behaviors. Culture Integration International’s Culture Assessment is an effective instrument to accomplish this.
4. Create the social, personal and structural constructs needed to motivate and suppport the shift in behavior. Two examples, 1. Ensure marketing and pr adhere to promoting the actual core “lived” values rather than what sounds good. 2. Ensure rewards/compensation and management disciplines are designed to reward people who live the core values. If BP had made “safe drilling” a value metric and heavily promoted it internally and externally, perhaps the landscape would be much different today. If you’d like assistance with this see Culture Integration International’s Accelerated Cultural Transformation Program.

The result of taking these steps is you get alignment between your values and corporate behavior that creates a solid and stable foundation for your brand. This alignment translates into customer’s who trust you, and reward you with their brand loyalty… and that’s good for your business.

By now most companies have made the cuts they are going to make to right size based on the economy and current business levels. The challenge most companies face is how to drive up performance with the staff that’s remaining. This article highlights the why and how to leverage culture as a way to drive higher productivity.

McKinsey and Accenture agree that culture (also called “Organizational Mindsets”) is one of three essential building blocks for high performance.

According to McKinsey research discussed in Managing Your Organization by the Evidence[1], accountability, clear direction setting, and a strong culture are the main ingredients that will generate sustained performance year after year. They report that fifty percent of companies will find the best performance results by focusing on these management practices:

• Articulate clear roles.
• Communicate an inspiring vision.
• Craft and manage an open and trusting culture.

Similarly, Accenture attributes high performance to these three building blocks[2]:

• Market Focus and position
• Distinctive Capabilities
• Performance Anatomy: a set of organizational mindsets. “These mindsets drive important differences in behavior—by individual employees on up to those of the company itself—that lead to better business outcomes.”

Let’s look at the elements of creating an open and trusting culture that leads to having the right set of organizational mindsets. It’s a little more difficult than you might think, and here are a couple of reasons why.

1. 1. Leaders assessment of the quality of their culture is often wrong. According to Dave Logan, the author of Primal Leadership, leaders are wrong about the quality of their culture by a level of two on a scale of five. This means leaders think that everyone in their organization believes it’s open and trusting but that’s not how people actually operate within it.
2. Organizations lack alignment on priorities and values. An open and trusting culture requires everyone to be working off the same set of priorities and values. In today’s environment one priority is the pressing need to change the culture (the culture: how we do things). While this is a daily mantra for most top leaders, the disconnect is that the sense of urgency for culture change is dramatically reduced at lower levels inside an organization.

If you have taken on a leadership role only to find the organization seriously lacking a sense of urgency then you are in good company.  John Kotter who is rated the number one “leadership guru” in America by Business Week magazine, in his current book, A Sense of Urgency, addresses this topic. While talking about urgency he says, people don’t recognize the immediacy of the problem or if they do then they point the finger at someone else with the result that the collective sense of urgency is often zero.

If you find this describes your organization then what can you do?

Here are a few suggestions:

1. Measure and manage your culture as a strategic asset.
2. Help all of your people understand the market challenge—engage them in the conversation.
3. Tap your people’s shared values to fuel the change.
4. Be a student of the game and recognize that culture takes time to evolve.

Measure and manage your culture as a strategic asset. It used to be that there was no real good way to measure your culture. That’s no longer the case. Assessment instruments like Values Centre’s Cultural Transformation Tools[3] provide a diagnostic on the level of alignment between an organization’s personal values to the current culture values, and alignment between the current culture values and the desired culture values including a calculation of entropy. Entropy is the amount of lost energy in the system.

Using values as a base level of measure makes sense because our values—those things that we hold most dear—are our deepest source of motivation. Values alignment between a company’s employees and their culture is one of the best leading indicators for high performance.

Help all your people understand the market challenge – engage them in the conversation. Assume that your people want to truly understand the market challenge. Common reasons they don’t understand is they lack information or lack perspective. It’s the “can’t see the forest through the trees” syndrome.

Examples of how business models and markets are changing dramatically are everywhere in every industry. If you help your people find personal examples first, then with their eyes opened it’ll be easier for them to engage about what’s happening in your industry, and the need to adapt and change to these realities. Here are two personal examples:

• Redbox video kiosk replaces Hollywood video for video rentals in our town.  The only Hollywood Video store in our town closed its doors and the RedBox video kiosks showed up down the street within the same month. While it cost $4.99 to rent a movie at Hollywood Video it costs just $1.00 to rent from RedBox. Talk about a paradigm shift!
• The disruptive business model of Progressive Insurance has sent State Farm into a tailspin. It’s hard to miss the amusing Progressive television commercials that feature the gal in white named Flo. Progressive is new, they have a centralized call center and do business over the phone and Internet. Contrast the Progressive cost model with State Farm’s model and it’s easy to see that State Farm’s model is expensive due to its physical offices and emphasis on a personal “Good Neighbor” agent model.  It appears State Farm realizes the significance of this shift. Perhaps in response to Progressive’s television ads, State Farm’s television ads featured discounts of 40% “just call 1-800…”

This idea of using examples is just one way to get your people to understand the urgency of the need to change. The point is you must get your people engaged in a way that they open their eyes about the need for change. It’s probably a good time to adopt the idea that keeps Intel innovating, which is to be a bit paranoid. It’s a fair bet that if you don’t make your offer obsolete then a competitor will.

Tap your people’s shared values to fuel the change. Values are causal, meaning that each decision we make we refer back to our internal system (beliefs, values) to determine how we will respond. When leaders get this, and use shared values to stir the hearts and minds of their people, it’s like adding dry kindle to hot embers… you get fire and energy (passion).

Dave DeWalt president of McAfee understands this point well. When the McAfee board asked him to join as CEO they knew the financial scandal that had sunk the previous leadership had hurt the McAfee brand. With Dave they got a values-based leader. What did Dave do? The first day of work he stood at the front entrance of their Headquarters building and greeted and shook the hand of every employee who came to the office that day.  Dave gets that values, like respect, are the heart of a company culture. Another of the values he models is honest communication and it appears this value of transparency has translated into positive results. With Dave at the helm McAfee turned in 16 quarters of consecutive growth. Impressive given the difficult economic climate and that security software is a mature category.

Be a student of culture. Culture is to a company, what personality is to a person; it grows and changes. Just as our experiences, commitments, and living in concert with our values shapes us personally, this is also true for a company. As with anything that is worthwhile, it takes patience, focus, and commitment to get results. This is particularly true with regards to culture.

Summary Thought leaders such as McKinsey and Accenture have identified business model innovation (distinctive capabilities) and culture as strategic weapons in the new economy. Executives are beginning to look at culture as a tangible asset to be measured, rather than a soft quality of their organization.  To compete for talent and customers in the coming years, executives will need to place culture development on par with product R&D and other mission critical facets of the business.

Follow these steps: manage your culture, help your people understand the market challenge, tap their shared values to lead change, and become a student of culture. This approach will put you in play for the long term. You’ll see a mood change come over your people. They’ll see you engaging, caring, and they’ll respond with a greater sense of urgency and a greater willingness to go the extra mile. It’s these changes across your enterprise that will combine to drive up productivity.

Learn more about Culture Integration International: Companies that manage their culture increase revenue by four times over those that do not. At Culture Integration International we use our Culture Alignment Framework™ to provide our clients a way to maintain high levels of sales momentum and productivity while retaining and attracting key talent during periods of growth, acquisition, merger, joint venture, turnaround, or founder transition/succession.

[2]Performance Anatomy- Competitive Essence and Building blocks, http://www.accenture.com/Global/High_Performance_Business/Overview/BuildingBlocks/Competitive-Essence-and-Building-Blocks.htm

[3]The Values Centre, www.valuescentre.com

It’s hard to argue with success. Zappos and Cisco, while radically different companies, have leveraged a similar discipline that has enabled their fantastic growth: distributed leadership. Distributed leadership occurs when the corporate culture empowers all levels of the organization to make decisions that are consistent with the values of the organization and its business priorities. To take a closer look consider these two examples:

• Cisco creates councils that are formed to pursue $10 B opportunities and operate with considerable autonomy. (See http://blogs.hbr.org/cs/2010/03/ciscos_john_chambers_on_how_to.html.)
• Zappos promotes a “Wow” customer experience. The culture at Zappos encourages every employee to deliver a “Wow” experience with each customer contact. On the front lines this means their phone personnel have broad discretion to make customers want to call again. Examples include: spontaneously upgrading shipping levels for repeat customers or directing a customer to a competitor’s site if they don’t have the item the customer wants in stock.

What are the benefits of distributed leadership?

• Pushes authority down in the organization so decisions are made closer to the customer and market.
• Enables employees at all levels to make better decisions that are consistent with the priorities and operating principles of the company.
• Increases employee engagement and makes them feel that they are valued, trusted professionals.
• Reduces overhead (drag) in the system; makes it more nimble and responsive.

Why isn’t Distributed Leadership more broadly adopted?

Distributed leadership requires a letting go by top management. Giving up control for some leaders can be uncomfortable. Deborah Ancona of the Sloan School of Management and distinguished Professor at MIT points out in Distributed Leadership at Work, “…while organizations want to reward distributed leadership and action, they do not want chaos. Successful distributed leadership companies bound the chaos by providing guiding principles, an organizational mindset, and mechanisms for risk mitigation.”

How can you get there?

First, make the decision to change.

Second, craft your culture to support distributed leadership:

• Identify your company’s core values and be sure to include “empowered decision making.”
• Embed your core values, including decision making, into your business processes.
• Make your norms explicit so that everyone can articulate “how we do things around here.”
• Train, coach, and build rewards and recognition programs to support empowered decision making.
• Hold your people accountable for living the value of independent decision making.
• Hire people whose values match the culture you are trying to create.
• Build a system for managing performance that focuses on risk mitigation.

Learn more about Culture Integration International:

According to an IBM Institute survey of 1,500 chief executives, complexity is the foremost issue confronting chief executives. The research states, “… chief executives see a large gap between the level of complexity coming at them and their confidence that their enterprises are equipped to deal with it.”

Against the backdrop of a radically changing world, the need for disruptive business models and practices is becoming commonly understood. CEO’s seek creative leaders who can overcome the paralysis of the status quo with new and innovative business models. The question is: What does this mean for you?

Don’t worry if you feel like you’re missing that “creative gene.”  There’s another way—focus on crafting and managing an adaptive culture. This approach doesn’t require you to be creative, but it does require you to be open and accountable.

A major challenge, according to Dave Logan, USC business school professor and co-author of Tribal Leadership, is that executives misjudge the power and effectiveness of corporate culture, often by two levels (on a five level scale). This prompts a second question: Who is responsible in your company for creating and managing a culture of innovation where continuous, rapid-fire shifts and adjustments are allowed to disrupt and displace traditional strategy-planning cycles?

Does this give you pause? Perhaps this thought experiment will help you appreciate that culture (how we do things) evolves out of the shared experiences, norms, and values of the company. Therefore, it’s essential to examine the values and norms that hold your current culture and business practices in place.

Question two: What values and norms are necessary in your company to ensure you have a culture of innovation and adaptability?

Let us have your thoughts.

Warren Buffett said we’re out of the quicksand; but we’re a little bruised from ropes that were needed to pull us out.
Point is: there are positive signs this economic crisis won’t last forever. There will be a sustained business upswing—there always has been and likely always will be. We don’t know when it will turn around but my advice is not to wait too long. Get prepared now.

It’s long been known that if you manage your culture effectively, it will have a positive impact on your bottom line. (Do a Google search for corporate culture and performance.) Consider these research findings:

· Almost one-half of earnings are attributable to how much employees “buy into” the company’s corporate culture.

· Companies that manage their culture have revenue increases of 682% vs. 166% for those who don’t.

· Stock prices for companies that manage their cultures increase by 901% vs. 74% for those who don’t; net income increases compare 756% vs. 1%; and ROI increases twice as much.

· In another generally poor economic climate (1972-92) five top-performing companies were those that managed the culture of their workforces well.

It’s easy to lose focus under the stress and pressure of tough times. Here are five ways to manage your culture now.

1. When in survival mode, it’s easy lose sight of your market focus, your core values, and who you are. Now is the time to reestablish your company’s critical uniqueness.

2. Conflict and stress rear their ugly heads when business pressures increase. Rumor mongering, passive aggressive behavior, open interpersonal conflict, and other ill effects undermine team cohesion. Now is the time to root out dysfunctional behaviors and reward values-based expected actions.

3. Tough times increase self-interest vs. team collaboration. Now is the time to revitalize your team, clarify company ground rules for behavior, and do everything you can to keep your best people.

4. When threatened (and these are threatening times) people circle the wagons, horde information, and stop sharing openly. Now is the time to promote trust and facilitate healthy communication.

5. Fear diminishes creativity and the organization becomes risk-averse. Now is the time to revitalize innovation, stress adapting to change and encourage creativity without the fear of failure.

Prepare now so you can reap all of the bottom-line benefits of a well-managed culture with a positively aligned workforce.

Hope is not a strategy. You’ve no doubt heard this bit of wisdom and it’s likely to be true if that’s all you do—sit around and hope for the best. In reality, however, a culture of hope is essential during this economic crisis. You must have faith that “this, too, shall pass”…and it will. And, as a leader, it’s your job to ensure your people believe in the future as well.

As Napoleon said, “A leader is a dealer in hope.” And, noted leadership expert, Joe Batten adds, “The first task of a leader is to keep hope alive.” Helen Keller may have said it best of all: “ Optimism is the faith that leads to achievement. Nothing can be done without hope…”

Will your company be ready to hit the ground running with the right people with the right frame of mind to jump on the opportunities that are around the corner? Have you created a culture of hope in your company?

Scott Lochridge and Jennifer Rosenzweig, founding partners of Dragonfly (www.dragonflyORG.com), support the notion that hope is a powerful force in the world in their new book, enlightenment, incorporated. They also point out that in tough times, people and organizations lose hope and they get scared. When they get scared, they fall into negative, fearful behavior. People spend more time complaining and sharing their fears which cuts into their productive work.

This can be the beginning of a downward spiral. The negativity places a pall on the organization causing the best people to leave. And if they can’t afford to leave now, they will when the economy turns around. Lochridge and Rosenzweig warn us, “Once the good talent leaves, the organization is left with staff that is usually frightened, risk averse, and by definition, less talented.” In these difficult times, and when the good times roll again, the last thing you want to do is drive the good talent away.

A sure way to keep top talent (and maintain high productivity) is to create and manage a culture of hope for the future. Hope is what sustains us as humans and a culture of hope in your organization is what will enable you to focus your team on your vision and implement your business strategy with an aligned, positive workforce that pulls together.

M&A is a powerful growth strategy. However, successful integration after the transaction is tricky.  The DNA of every company is different and when companies come together cultural issues can undermine alignment and teamwork. read more…

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