Structural Integrity
How to build a culture that will enable your business to withstand the test of time
The pyramid of Khufu is thought to have been built around 3,200 B.C., and as with all of the other Egyptian pyramids, has stood the test of time like no other man-made structures on earth….and they were built on sand!
For years the pyramid has been a symbol used in business to visually show the characteristics or general steps that need to be taken to reach the pinnacle of success. It is a very effective tool for communicating what needs to be built on what, and what priorities come first in order to reach a goal, whether it is a departmental goal, a company goal or cultural goal. There is always a foundation on which all other layers are built and each layer supports the next until the pinnacle is placed on top. If you work for a company, chances are there is a poster somewhere depicting a pyramid. Here is one I once used to use to illustrate what is most important when it comes to production:
But is it really the best symbol of a business? I don’t think so, and here are some reasons why:
- Pyramids are build on sand, sand shifts.
- Once the foundation is built, its size is dictated. You cannot add on, and you still need to pay the utilities even if you don’t occupy the whole thing.
- As for occupying it…there is only room for one person.
Chances are, you don’t work in a pyramid. You work in a building, whether it is an office building, your home or your neighborhood Starbucks.
The building in which you work must have structural integrity or it will fall down. A great culture is the same…it must have structural integrity. It must have the same basic components of a building to have structural integrity.
It is often said that a great culture is the foundation of a great business. We need to think of culture as an entire building, not just the foundation, for two reasons. First, we work IN a culture, just like we work IN a building. And, second, a structurally sound culture is made up of key components that keep it from imploding on itself…just like a building. To illustrate this, let’s look at the main structural components of a building as they relate to building a great culture. The diagram below is from fema.gov and illustrates this perfectly.
The most important part of a building is its footing. The purpose of a footer is to spread the weight of a building across a larger surface and to keep the foundation from shifting. From a cultural standpoint, footers represent The Four Absolute Values. Absolute in that they are as critical to developing a great culture as as our hearts are to keeping us alive. Values differ from company to company, and are meant to be a set of guidelines for how the business is operated. They tend to be words such as integrity, excellence, hustle, creativity, etc. However, there are Four Absolute Values that must be present as footers in the culture because it is these values that the rest of a culture is be built upon. These values must be lived by top leadership to set an example for the rest of the company. They are “Walk the Talk” values. Without them, dysfunction will breed. When leadership lives by these values, it demonstrates to everyone in the company, that they are expected to as well.
Footers: The Four Absolute Values
Transparency. This value is about information (financial, directional, etc). When a company is transparent with its information everyone is on the same page, there is no need for guessing, and rumors. Employees are always privy to the information necessary to understand exactly where the company stands, where they stand in the company, and whether or not the company is the right place for them. Too many times, leadership is not transparent because they are concerned about losing people or hiding things. Newsflash: employees always know what is going on because people talk. Transparency by leadership allows the narrative to be controlled, creates a sense of comfort for all employees, demonstrates trust, and keeps everyone on the same page.
Integrity. Integrity is defined as “firm adherence to a code of especially moral or artistic values”. It is about doing what is right, not what is convenient for the individual for self-preservation reasons. Although self-preservation is a human trait, if it is engrained in a company’s culture there is no way that all stakeholders will benefit from the company’s results. When integrity is lived throughout the organization, employees know that they can count on their managers and on their co-workers.
Ownership. This is one of my favorites and one that took me years as a young person to understand its importance. I can recall meetings when the CEO would come down on a VP because of something that happened relative to that person’s department. So many times, I would hear the VP deflect blame to another department or worse yet, to one of their direct reports. This led to a lack of trust by those around that person. If you have read Patrick Lencioni’s The Five Dysfunctions of a Team, you know that lack of trust is a primary reason for dysfunction. Lack of ownership also leads to something we all hate: more meetings. When Ownership is lived as an Absolute Value by leadership, it provides a space whereby all others are more willing to take ownership without fear. It provides a space where it is okay to admit to a mistake, learn from it and move on.
Humility. If, like me, you grew up in business in the 1980s this is not a value that we tend to think of as inherent in high-performing CEOs and leaders. However, it is the type of value that is critical in business today, not just for leaders but for entire companies. Humility as a value signifies to the organization that leadership is “free from pride and arrogance” and signifies the same to all stakeholders as well as the outside world. In his book “Good to Great”, Jim Collins refers to the Five Levels of Leadership with Level Five being the pinnacle of great leadership, and where humility is a given. Couple humility with killer instinct and your competitors won’t know what hit them.
Humility is an antonym of “Ego”. Probably 99% of the mistakes I have made in business, and failures I have had in business were because of my ego. Ego can cloud your judgement, it can drive away good employees and can be a huge warning sign to investors. Ego, is what can lead you to ignore the voice in your head that knows what is best and to lead you to not listen to others. On the other hand, Humility is what allows us to listen, it slows us down, it allows us to be considerate of others. Without humility, the other three Absolute Values will be elusive. A good friend of mine in the finance business once remarked that before they invested in a company, they always tried to find out what the CEO’s reputation was like from people like the security guards in the lobby or the people who cleaned his or her office. Did he or she know their names, talk to them, etc? If you are out to quickly build a business, sell it for F.U. money then sail into the sunset, humility may not be that important as a Absolute Value. But if you are trying to build something enduring…it is essential.
As a leader, if you can nurture these Absolute Values in yourself people will stick with you thru thick and thicker because in return for living these values you will earn the type of trust that lasts a lifetime. Construct the company’s foundation on these footers and there will be no limit to how high you can build.
Foundation: Purpose
Capitalism, without question has generated and spread more wealth than any other economic system in all of human history. It created an entire middle class in the 1900s, enabled the United States to help the good guys win WW’s I and II, enabled us to spend the Soviet Union into insolvency, and has led to some of the worlds greatest medical and technological advances. There is one problem though: That darn human nature, AKA, Adam Smith’s “Invisible Hand”. Human nature has had the unintended consequence of creating and perpetuating social problems that could have been avoided had businesses always operated for the benefit of all stakeholders and with a pursuit of not just profit, but Purpose.
In 2019 The Business Roundtable issued its periodic “Principles of Corporate Governance” and for the first time since it started doing this in the early 1980s, it endorsed the notion that corporations need to exist not just for the benefit of its shareholders but for ALL STAKEHOLDERS. One hundred eighty-one CEOs signed this document. In signing it Alex Gorsky, Chairman & CEO of Johnson & Johnson remarked about the newly worded governance principles: “It affirms the essential role corporations can play in improving our society when CEOs are truly committed to meeting the needs of all stakeholders”.
Back to the 1980s: When I was in college recruiters would come to campus for large companies espousing how we could have long and prosperous careers with their particular company. As candidates we just cared about landing a job, landing one for as much money as possible, and one that gave us the best chance of climbing the org chart. In exchange for that, we worked crazy hours, traveled incessantly and put up with bosses who would think nothing of dressing us down in front of our coworkers. Profits and bonuses were all that mattered.
Today, labor is mobile. We live in a gig economy where employers need us more than we need them and where business has the ability to help address some of our biggest social and economic issues in ways government cannot.
Businesses are in the unique position being able to help with these social issues specifically because in business, IT IS about the money. Profits allow for reinvestment in the business, and towards it’s Purpose. This cycle of re-investment can become a flywheel for the business’s Purpose.
Also, money is nothing more than a medium of exchange. When businesses also serve a Purpose, that Purpose itself becomes a medium of exchange. For example, if the Purpose of Dorky Donuts is to help young, disadvantaged African-American children to graduate from high school and attend college or trade school while at the same time becoming a 5,000 store chain in pursuit of Profits, it gets to convert that Purpose into cash and exchange it for the labor of people who want to work at the company, not just because they like to eat jelly donuts and help build a 5,000-store chain, but because the Dorky Donuts’ Purpose is important to them. It is part of the reason they “took their talents” there in the first place.
Authentically pursuing a Purpose as well as profits is critical for attracting and retaining the best talent, and for ensuring that the business is operated for the benefit of all stakeholders. Those stakeholders include not just shareholders, employees, customers, and vendors but the community at large.
Columns & Beams: Operational Values
Columns and beams are used to support the weight of a building’s upper floors and its roof. They give structure and shape to the building and determine outer limits of the building since they support the outside walls. All business activity is conducted within these columns.
Operational values are values that describe the characteristics looked for in team members and the way in the company “does business”. They are not Absolute like the footers, and as such, can change as the business progresses thru its life cycle.
For example, a startup may have survival oriented values as their columns: hustle, fail fast, creativity, and passion. Although I have seen many mature companies that desperately need these startup values, if their culture was great from the beginning, they would have adapted. That said, a large, mature company may have values that refer more to stability while still leaving room for entrepreneurialism.
The number of columns and beams also determines how high the building can be built. With Purpose as the foundation and the Four Absolute Values as footers, there is no limit to how high business can be built.
Exterior Walls & Roof: Mission
All buildings must have exterior walls and a roof. Why? because they keep the elements from getting in, allow for a regulated environment inside and keep people from falling out. They are boundaries.
A company’s mission is commonly addressed in its mission statement which refers to three things: what the company does, for whom it does it and how.
Without a mission, there are no boundaries, no sense of direction or clear idea of what the company’s core competencies are. This is most critical for companies in the startup and growth stages of their lifecycle where cash is short, and where potential investors value focus as much as performance.
Windows: Vision
Windows represent the company’s vision, possibility, and creativity. Just like windows in a car, they allow us not just to see where we are going, but to decide where we want to go and see who is coming towards us. While mission is who, what and how, vision is “why”, it is the dream that is held in place by the walls.
Mechanical Systems: Business Processes
Without HVAC and electrical systems in a building we wouldn’t be able to see what we are doing, be very uncomfortable doing it, and as such would make a lot of mistakes.
In the culture we have built above, think of these as the business processes that are put in place to ensure the efficient and profitable operation of the business. Lack of good processes can be detrimental to the culture we just finished building and can rot it from the inside out. Process tends to be ignored no matter where the business is in the Business Lifecycle, and while they need to change as the company does, processes are critical to helping people live and work by the company’s values while allowing the business to operate efficiently and maximize profits.
What about people?
You may have noticed that I left out the notion that people help form a great culture. Well, like Ray Kinsella heard from the voice in his cornfield in the movie Field of Dreams, “If you build it, they will come”.
That is because if you build a building with a clear mission and vision (walls and windows), that are held in place by the operational values (columns and beams) that are deemed critical to the company’s success, and fasten those columns on a foundation grounded in purpose, which rests on the Four Absolute Footers of transparency, integrity, ownership and humility, you will attract the best of the best. Those who are looking not just for a job, but to be a part of something.
This model is made up of specific individual components that, when broken, begin to strain the culture. But when put together in the form of a Cultural Structure, their importance to it are emphasized…the Cultural Structure cannot stand if one of the components is missing or severely damaged. This model provides a holistic way to develop a great culture, and brings definition to that which has traditionally been difficult to describe to those inside the company, much less those outside of it .
