3 Ways Leaders Influence Company Culture (And Don’t Even Know It)

When Alan Mulally became the CEO of Ford in 2006, the motor company's market share was plummeting. The problem was internal: Teams weren't communicating or working towards a unified vision. Mulally turned that around with his leadership.

At weekly meetings, he asked managers to use a traffic light system to indicate their progress on key programs. A green light meant it was going well; a red light meant there were critical issues. At his first meeting, he noticed everyone had green lights. Given the state of the company, Mulally knew this wasn't possible. And he told the managers so.

The next week, the meeting was full of red lights. The problems were finally on the table, and they could get to work--all because Mulally encouraged transparency.

As Mulally illustrates, strong company cultures start with strong leaders. Employees look to corporate leaders to set a precedent in the office and keep them engaged. The problem is that some leaders may be fostering a strong--or weak--culture without even realizing it.

Here are three ways leaders unknowingly influence the workplace.

1. Taking responsibility for their actions

Leaders must be able to hold themselves accountable. That means celebrating their wins and owning up to their losses. If they don't take responsibility for their actions, employees will think it's okay to do the same. And if the boss puts the blame on his team instead of himself, employees may come to resent him and lose motivation.

In 1976, Dale Miller conducted a study of two executive groups: Those whom colleagues identified as "highly effective and ready for promotion" and those deemed "unready or unsuited" for promotion. Those in the first group said this statement was most important to their success: "Accepts full responsibility for the performance of the work unit." It was even more important than statements about delegation, planning, staffing, and technical skills.

Leaders who took responsibility for their team's performance were more likely to be promoted. Those who didn't were more likely to be stuck in a dead-end position. And their colleagues knew it.

2. Stepping outside of their comfort zone

Leaders don't operate in a vacuum. They should be willing to take risks, collaborate, and learn from others--especially those in lower ranks. If they don't, they could stunt innovation throughout the organization.

As Mark Zuckerberg said of his experience creating Facebook, "I don't pretend that I had any idea what I was doing. The biggest risk is not taking any risk. In a world that's changing really quickly, the only strategy that is guaranteed to fail is not taking risks."

By setting that precedent, Zuckerberg built a company culture wherein people could pioneer groundbreaking products that keep 2 billion people connected across the globe.

3. Putting the customer first

Leaders can make it clear that they are working to improve the lives of real people--not just collect a paycheck. They can put the customer at the forefront of their programs and initiatives, and inspire others to follow suit.

In 2016, for instance, Samsung Electronics America CMO Marc Mathieu launched Samsung 837, a 40,000 square-foot-store in New York City. Here's the kicker: It had absolutely no inventory to sell. It was all about providing a great experience for the customer.

"The bottom three floors represent a physical manifestation of our brands--including consumers actively engaging with our technology on the ground floor and marketers collaborating in a cross functional space on the floors above," Mathieu said during an interview with Forbes. "This proximity to consumers allows us to observe, evolve, and innovate our marketing approach in real time."

Through this initiative, Mathieu made it clear that he prioritizes the customer above all else, and that anyone who represents the Samsung brand should be capable of the same.

Final thoughts

Leaders don't just schedule meetings and sign documents. They set the tone for how their workplace operates. And if they don't understand this, they could end up leading by a poor example and missing opportunities to strengthen company culture.

All eyes are on them, and that's a tough--but necessary--power to wield.

How Culture Changes When Your Company Grows From Startup to Scaleup

The kind of culture I wanted for HubSpot in our early days was one where we didn't have to think about it. I subscribed to the Fight Club credo: the first rule about culture is that you don't talk about culture.

We broke that rule.

The reward for that act of civil disobedience has been a powerful recruitment engine, an early warning dashboard, and a preventive maintenance system.

Documenting Culture

Over coffee one morning, Colin Angle, CEO of iRobot, challenged me to think more intentionally about culture.

"Culture is the secret ingredient to scaling up a company," he said. "To scale hiring, you have to figure out culture. Without a great culture, retention will become an issue and building a recruiting funnel will become painfully difficult."

Wait. A recruiting funnel? Colin had just used the magic word.

In our offices, it's hard to find a whiteboard that does not have a funnel drawn on it -- HubSpot was all about the sales funnel, and we were evangelizing an inbound methodology to help small and medium sized companies attract more attention and supercharge the conversion of website visitors into leads.

That chat with Colin inspired me to reframe culture using an Inbound lens. Just as a great product is like a magnet that attracts customers, a vibrant and healthy culture is like a magnet that helps attract and retain employees who in turn recommend us to their network of talented professionals. All of a sudden, culture made perfect sense.

Back at the office, we kitted up a quick Net Promoter Score (NPS) survey to take the temperature of our 100 or so employees. "How likely are you to recommend HubSpot as an employer to someone you know?" 

I was shocked to read in the comments to this 1-question survey that the primary reason people liked working at HubSpot was that they loved the culture. Had none of them seen Fight Club?

Who were we to argue with Colin and our own employees?  So, we dove in, tried to fully understand the culture we already had, and we documented it. We posted The Culture Code publicly online, and which has since gathered more than 3 million views on SlideShare. Just about every new employee mentions the Culture Code as a key part of their decision to join our team.

Documenting culture gave it scale. 

Measuring Culture

We ran another eNPS a year later with 175 employees.

We sliced the numbers lots of way and identified a sore spot: employees with 1-2 years of tenure were disproportionately detractors, with a negative score. What? I can still recall how it felt to look at a minus sign in the report.

After quickly progressing through denial, anger and depression, I accepted the number and took a hard look at the comments from this cohort. It didn't take long to figure out that the 1-2 year folks had serious concerns about career advancement.

Over the next six months, we made sure to communicate specifically to "mid-life" employees about existing opportunities for development, and also came up with some new policies to create opportunities. By responding so directly, we saw a 50-point positive swing from those early eNPS numbers.

Measuring culture makes it actionable. 

Institutionalizing Culture

Fast forward to 2014. In the months ahead of taking HubSpot public, we frequently heard a disconcerting question: What is your plan to deal with the inevitable exodus of talent who will become much wealthier the day after the IPO?

An exodus? Could that happen to us? When you have 20 employees in a startup, and you lose 15 percent, it's just three people That's manageable. But, HubSpot had around 600 employees and was growing fast. Losing 90 people while trying to grow by another 120 headcount would be a body blow.

We did not want a plan to deal with an exodus. We wanted a plan to prevent it! 

It was time to start thinking of HR less as a back office function and more as an engine of our growth. We created a formal culture initiative and appointed a Chief People Officer. 

The chief people officer institutionalized our culture. For example, our Culture Code states that we highly value an individual contributor who gains mastery in their role, as well as anyone who spectacularly supports that individual in their effort to do so.

In our company of 150 or so employees, it was common for informal, supportive connections to occur naturally, partly by sheer proximity. Beyond that tipping point, with hundreds of employees, that dynamic needs a little hands-on engineering.

So, every month, our chief people officer reviews the list of employees who have worked in the same role in the same location for more than two years. That's a signal that an employee's environment and career at HubSpot may have become stagnant. We make sure we expand their opportunities for learning and advancement before they begin to think of expanding them somewhere else.  

By the way, HubSpot went public in October 2014, and we ended the year with a net increase of 117 employees.

Institutionalizing culture gives it endurance. 

5 Ways to Identify a Toxic Workplace During Your Interview

As 2018 begins, many people are thinking about making a move in the job market. In addition to looking for more compensation, advancement opportunities or a change of place, job seekers these days are paying close attention to company culture -- for good reason. No matter how great the title, the pay or the role, if a company's culture is toxic, you will regret taking the job.

Cultures are all different, but in almost all cases a great culture is one where the company's mission is reflected in the behaviors exhibited by employees day-to-day. Over the years, I have had the opportunity to work with hundreds of businesses, and I have seen that too often reality falls short of public image. I even know of several examples where expectations set during the interview process were shattered the minute the employee started work. 

Fortunately, it is possible to spot a toxic culture in advance and save yourself from a bad career move. Here are five signs that a prospective workplace might be toxic:

1. Reviews are inconsistent.

Job sites like Glassdoor and Indeed collect and publish company reviews and rank companies by culture -- but look for more than just high marks. Check for consistency in the pros and cons listed to get a feel for the culture. When you look at the cons, look for patterns -- especially related to the behavior of the CEO and upper management. Gloss over personal complaints and watch for posts such as "The CEO doesn't trust anyone," or "Anyone here that speaks up is walked to the door." If you read those comments again and again, run.

You might also see a string of consistently bad, detailed reviews followed by several glowing comments by people who can't seem to come up with a con. This is a sign upper management has been posting comments to try to clean things up and is a major red flag.

2. Vision and core values are 'wall art'.

You want to work for a company with a clear mission and values. If the company doesn't have any statement of this kind, that can spell trouble. But it's also a concern when a company's values are nothing but wall art. To find out if that's the case, ask questions in your interview about values and mission.

Do people know what they are without looking them up? Does anyone mention the subject to you? Also ask if the company's awards and recognition are based on values. Such questions can help you discover if you're dealing with a company that says one thing and does another.

3. Feedback is not encouraged or even discouraged.

Great companies regularly ask their employees for feedback -- and act on it to make the company better. Look for how feedback is discussed in reviews and ask about it in your interviews. What are some examples of things the company has changed based on feedback? What do you think would happen if you e-mailed the CEO with a suggestion? Watching how interviewers respond to these questions in the first few seconds will give you the answer you need. If they struggle to reply, beware.

4. Transparency and trust are lacking.

More and more information is public these days, and companies that share their ups and downs transparently are valued for getting their employees involved in understanding the goals and the mechanics of the business. Conversely, companies that keep everything under wraps are typically the ones where unpleasant surprises eventually emerge.

For example, I recently saw a company doing a press release about all its hiring plans and spinning a very positive story to its employees about growth; at the same time, it was conducting two rounds of layoffs. Employees quickly lost trust and defected.

Companies and managers that are tight-lipped about metrics and financials also tend to have the mentality that "it's our money, not yours." Wouldn't you rather work at a company designed to benefit everyone?

5. Family has heavy hand in business.

Ideally, there should be checks and balances in any business, and family enterprises can lack these. So, be careful. When a husband/wife team are at the top or an extended family is forming the leadership team, it can be hard for employees to debate or challenge decisions. Imagine trying to take a complaint about your boss to his wife, the CEO.

In many cases, if you are not part of the family, opportunities for advancement are limited. Since it's possible to go to work for a family business unknowingly, do your research.

Working at a company with a toxic culture can make it miserable to get out of bed every day and go to work -- and life is too short for that. So, take some time to do your homework on company culture before accepting any new role.

Research on Hundreds of Companies Showed Toxic Cultures Have These Characteristics

Most of us can name companies known for not only their monetary success but their success in creating a culture in which employees are proud and happy to belong.

Companies like Southwest Airlines, Chick-fil-A, or Movement Mortgage all share the distinction of great financial and cultural success. Beyond knowing who these organizations are, if you want to reproduce their thriving culture within your own organization, it is important to know what culture is in the first place.

Daniel Coyne author of The Culture Code says this about culture:

"While successful culture can look and feel like magic, the truth is that it's not.  Culture is a set of living relationships working towards a shared goal.  It's not something you are. It's something you do."

Here is where culture gets interesting; every organization or team has a culture and it's constantly evolving and changing whether they know it or not.

What we found after working with companies of all sizes is most organizational leaders are completely unaware or have no way to identify the quality of the culture in their workplace.  In an effort to help change this, my team at LearnLoft did research to separate and categories these companies based on employee or team-wide culture surveys.

What we found was distinct differences in the characteristics of some organizations and teams vs. others. Here are 5 levels of company culture including characteristics and takeaways to help your organization.

Level 1: Toxic

No one wants to work in a Toxic culture. That's evident because only a small percentage of organizations last when they have a Toxic culture. The organizations that do last typically have a revolutionary idea or technology.  

You would be able to identify if your organization has a Toxic culture if there is a "churn and burn" mentality with employees or there is no sense of connection with team members. Tocix cultures make up 11.3 percent of companies researched.  

The takeaway:  If you are currently working in a Toxic culture with no sign of change in executive leadership, now is the time to start looking elsewhere for employment.

Level 2: Deficient

Deficient is better than a Toxic, but by no means is it a great place to work. An easy way to identify a Deficient culture is by observing a workplace. You can tell a drastic difference between an executive leader and a non-executive.  They have separate office spaces, conference rooms, printers, lunchrooms, and parking spaces. 

While most would say this is normal because of the traditional workspaces of the 90's what it does is build physical or invisible walls between team members and their ability to connect.  Causing a lack of innovation, creativity, and teamwork. Deficient cultures make up 54 percent of teams studied.

The takeaway: Working in a Deficient culture will take a major toll on your professional and personal happiness.  Try and introduce culture building things like pot-luck lunches, or open innovation meetings. These are the first steps to see if executive leadership will get behind new ways of employee connection. 

Level 3: Common

Common culture is the second most popular culture making up 23 percent or companies studied. I like to think of these cultures as those where the  "few carry the weight of many." A few top performers are "all-in" and carry the organization about as far as it possibly can go.

Common cultures typically share additional characteristics such as low to medium turnover and struggle to integrate different generations within the workplace.

The takeaway: The best way to get out of a Common culture is to begin changing the attitude and language that team members are used to using.  Try reducing workplace gossip and calling team members out who bring a negative attitude to work.

Level 4: Advanced

Advanced is a big step up from Common because you get into cultures wherein people seek out opportunities to be a part of what is going on.  There is always a direct connection between the work being done and the purpose of what the organization does in the world.  

Executive leaders proactively work to shape and mold the culture daily.  It's weaved in all areas of the business from hiring, to employee development, to constant communication. Advanced cultures make up 7.5 percent of teams studied.

The takeaway:   Run surveys or host open roundtables across the organization to identify things executive leadership can do to further improve the workplace environment.  

Level 5: Elite

Elite cultures are the best of the best. These are highly connected work environments from the C-Suite to the lowest level employees. In Elite cultures, words and phrases are powerful and are used all the time to the point where they become habits.  (For example, at any Chick-fil-A restaurant you hear their employees say "my pleasure") 

A few additional characteristics include: teams see a future working together; other organizations look to mimic or copy its culture, and they consistently exceed growth targets. Elite cultures make up about 5 percent of organizations studied.

The takeaway: Staying at the top will be the challenge.  As turnover in founders or executive leaders begins to happen continuing to stay connected to the organization's purpose and core values will be a challenge.  But if anyone can do it, your organization certainly can.  

Here is the best part, every organization or team has the ability and capacity to be an elite culture. Just know changing cultures takes a lot of time, energy and effort but in the end, it will be well worth it. 

3 Ways to Build a Feedback-Friendly Culture at Your Company

Many successful companies have corporate cultures that share some of the same traits: People are honest about what's working (and what's not), they are receptive to fresh ideas and tend not to be resistant to change.

At Funding Circle we champion this spirit in one of our five company values: Be Open. One of the biggest benefits of this has been that it has helped us build a feedback-rich culture.

Feedback matters because it helps people improve their performance. It also gives leaders the information necessary to build the sort of companies they aspire to be. Without feedback it's very difficult for people to develop and for organizations to course-correct.

Developing an environment where feedback is welcome takes some work. Here are a few things to keep in mind:

1. Leaders set the tone.

A feedback-rich culture has to start from the top. It only takes one misstep as a leader to shut it down. If it ever comes out that someone bearing well-intentioned views is shut down or punished for speaking out, others in your organization will shy away from being open and honest.

As a leader, it's your job to show you are open to constructive feedback and want to do your role better. Demonstrating that you can receive feedback -- even when uncomfortable to hear -- from your team helps give them confidence to speak up, and also sets the norm that they will follow when it's your turn to provide developmental feedback.

2. Feedback should be a part of daily life.

Feedback needs to be distinct from the performance appraisal process done once or twice a year. In fact, if anyone shows up to a performance review and the evaluation is a surprise then you know you have a serious breakdown in your feedback culture. The management skills of the person responsible for that employee's development probably need some work, too.

For most people, being directly and openly critical of others' behaviors and decisions is already very uncomfortable. As a result, they'll often hold back or, worse, channel such views into corrosive water-cooler chat that can really kill company morale.

To ensure that this doesn't happen, a key role for a leader is to set up clear forums and channels by which people can give each other feedback -- in all directions -- and do so within guardrails that are appropriate for your culture. One simple tactic we often use at our company is to encourage our people managers to solicit and give performance-related feedback to their team members on a regular interval between formal reviews.

3. It's a skill, not a talent.

A healthy feedback culture allows people to understand what they need to change, but does so without undermining the interpersonal trust that's crucial for constructive workplace relationships. Creating this type of environment takes continual work and practice by everyone involved; it probably won't happen naturally.

At our company, we offer workshops to give people a chance to learn and practice their feedback skills. One tip is to start with a simple, experience-based "When you did____, the impact on me/that other person/etc. was___." This allows you to be specific, provide clear guidance on what someone might have done differently, and does so without challenging someone's interior motivations.

Whether speaking with someone junior, senior, or a peer, I've found that a direct, empathetic approach to feedback leads to lasting and positive behavior change. It also can create stronger relationships and ultimately, improved business performance.

5 Lessons You Should Learn From Ikea’s (Surprisingly Revolutionary) Company Culture

You may have heard: Ikea founder, Ingvar Kamprad recently passed at the age of 91. The founder left an inspirational impact on large and small businesses alike.

Ikea is a giant, and it has a lot to boast about, given its 262 locations in 24 countries. Most of us recognize the chain by its bright blue and yellow signature colors that scream "Smaland" (where Ikea was founded) from miles away. 

Yes, Ikea's selection has been game changing in the furniture industry. And Yes, the prices are pretty competitive. But there's something stronger that allures customers all over the world to this specific chain.

By taking a deeper look at the Ikea company culture, all businesses can afford to learn a thing or two from the home goods haven that appeals to moms, dads, and professionals alike. Here are five practical tips for owners of all businesses:

1. Be true to your brand.

Image consistency is a huge factor contributing to Ikea overwhelming success. They maintain their signature style in every one of their 24 countries located, and consumers appreciate that sense of consistency. It's nice to be able to rely on a brand as your comfort zone.

Most small businesses don't have multiple locations. But there is still much you can do to make your office furniture in-lined with your waiting area, rugs and knick-knacks laying around the office. The key is brining a sense of uniqueness to your office and carrying that all the way through no matter how big or small your space is. 

2. Let the customer be as independent as possible.

Part of the appeal of the Ikea shopping experience is that most of its products are prepared to be assembled by the customer. Clear instructions are provided. This empowers customers to feel personally invested in their own products.

3. Appeal to the person, not just the wallet.

When you walk into an Ikea store, merchandise isn't exactly flung at your face. On the contrary, you have to find it.

First, you are greeted with the sight of a wonderful children's play area. A free babysitting service? How delightful! Walk further, and you'll smell the aromas of a restaurant. Food? Now, this is a place where you want to stay.

Ikea understands the practical and emotional needs of its customers. Therefore, every person who walks through the door ultimately becomes a part of their relationship, and that is where the loyalty begins.

4. Be practical.

When shopping online, you probably skim over half the useless things you don't need -- or think you need.

But in an Ikea store, the layout is such that every single piece of merchandise is put into practical context. Suddenly, that slim bookcase seems useful after all.

See how brilliantly they tucked it in to that corner, just like the one that you have in your house? See how they arranged those couches? Or that ornament?

Ikea's setup is like a real home, which facilitates the decision-making process. Handy measuring tape strips and pencils are often set up at every section, so that you can really make sure things will fulfill your needs.

5. Become a master marketer. 

Ikea introduced its 2015 catalog with its hilarious BOOKbook commercial campaign that sang the praises of an actual paper book. It was a funny spoof of Apple that resonated with YouTubers worldwide due to its honest and forthright message.

Ikea has a refreshing vibe in terms of its marketing. It retains its clean, no-nonsense identity while simultaneously staying current and on trend with the ever-changing needs of customers.

Its promotional techniques are multifaceted, engaging every possible potential client through various forums such as yearly catalogs, social media campaigns, and eye-catching advertisements. As an international chain, its promotional content is tailored in each country to adapt to unique and/or specific needs of different cultures.

Most small businesses don't have big budgets for extravagant design and expansive branding campaigns. The challenge for small business owners is to be creative with not only your design but your ability to get there without spending money.

Happy decorating!

**Liba Rimler contributed to this article.

Want to Define Your Company’s Culture? Start By Answering These 2 Simple Questions

Recent developments regarding sexual harassment allegations have leaders of companies scrambling to eliminate the potential for these behaviors in their companies and mitigate risk. Unfortunately, many of these efforts, albeit altruistic in motive, are tragically flawed in approach.

Rewriting employee manuals and company policies will have little to no effect on preventing a toxic culture. Human behavior is controlled by three things (listed from highest to lowest effectiveness):

  1. Personal moral compass ("I shall" and "I shall not")
  2. Culture ("We shall" and "We shall not")
  3. Policies, rules, laws ("You shall" and "You shall not")

The first two on the list are intrinsic. They are highly effective and inexpensive to administrate. When those two fail, we tend to go litigious. Number three is extrinsic and the least effective.

So, hire well. Screen candidates to assess their personal moral compass, and be intentional about building a corporate culture that is intolerant of sexual harassment and abuse. Here's how.

Draw your line.

Start with this exercise:

  1. Hang a piece of butcher paper on a wall and gather your team around it. Draw a black line horizontally across the center of the paper.
  2. Above the line, ask the group to answer the question, "What behaviors do we tolerate?" Below the line, have the group answer, "What behaviors don't we tolerate?"

Caution: Do not be aspirational. Tell the truth. Are people late for meetings? Then "being late" goes above the line. Do you hear gossip at work? Then "gossip" goes above the line. The key is to get people to tell the truth, and in this context, truth means describing things as they actually are.

Once everyone in the group is satisfied that the paper truthfully lists the behaviors they have been tolerating and have not been tolerating daily, draw a line on a second piece of paper. This time, ask the group to list behaviors that, from this moment forward, they will tolerate and advocate for above the line. Then, below the line, list the behaviors they will no longer tolerate. Ever.

Again, this is not an aspirational exercise. Make sure each person who fills out this second chart is committed to living into this culture starting immediately. If they write it on the paper, they are now committing to living into these behaviors.

Everyone enforces your culture.

Everyone in the group should agree that anyone who witnesses behaviors that are below the line has an obligation to call out the offender, regardless of who they are.

This is essential. In a peak performance culture, the lowest-level person in the organization feels obligated to call out the highest-level person in the organization should they see behaviors that breach what was documented on that paper. Culture is enforced by any and all.

Keep the second sheet of paper somewhere it will be seen, like near the coffee pot. Each month, gather to see if what people are experiencing in the company matches what is written.

If not, there are only two choices: change the behavior to match the paper or change the paper to match the experiences. Repeat monthly.

This straightforward process will have profound implications for your corporate culture. All you need is a couple of big sheets of paper, some markers, a commitment to honoring your word, and a heap of moral courage.