What Are the 3 Simple Rules for Turning Your Company Culture Into a Competitive Advantage?

Why Does Company Culture Feel So Hard to Change, and What Can Leaders Actually Do About It?

Struggling to build a high-performance culture? Learn the three simple rules—Aspire, Amplify, and Adapt—to transform your organization, improve alignment, and create a powerful competitive advantage. If you’re ready to stop leaving your organization’s most powerful asset to chance, it’s time to learn the rules. Let’s explore how to intentionally build a culture that drives performance and secures your ultimate competitive edge.

Recommendation

In any organization, culture dominates. A strong culture equals a strong organization. In strong cultures, employees love their work and care about how they perform. Consultant and prolific business author Mark Miller and his team interviewed thousands of insiders to learn how to create a strong business culture (or transform a weak one). Miller sets out three requirements – “alignment, performance, and improvement” – and three rules. You should “Aspire” to achieve your firm’s goals, “Amplify” to expand your organization, and “Adapt” to change when you must. Then, he says, train the right leaders to pull it all together.

Take-Aways

• Games such as Monopoly create a “magic circle” that envelops players. Your culture can do the same.
• A high-performance culture depends on three factors: “alignment, performance, and improvement.”
• Follow three rules. First, “Aspire” – ambitiously pursue clear goals.
• Second, “Amplify” – continually extend and expand your vision and your company.
• Third, “Adapt” – change when necessary.
• Leaders must inspire their team members to boost their morale.
• A great organizational culture depends on great leaders.
• Organizational culture is a giant, heavy flywheel. Getting it to spin on its own requires maximum effort.

Summary

Games such as Monopoly create a “magic circle” that envelops players. Your culture can do the same.

Board games capture players’ interest and attention, enveloping them in a magic circle. This concept originated in 1938 when Dutch historian Johan Huizinga first described how play directly influences culture. As he pointed out, when players become immersed in a game’s magic circle, they temporarily put aside personal judgment as they enthusiastically accept a game’s often arbitrary rules.

Consider Monopoly. Players agree to elaborate rules as they get caught up in the race to buy fabled properties such as Boardwalk and Park Place. At the same time, they accept Monopoly’s negative aspects, such as obeying a “Go to Jail” card. They do it all to remain in the magic circle and have fun, the ultimate objective of any game.

“I came to see, in my time at IBM, that culture isn’t just an aspect of the game – it is the game.” (former IBM CEO Lou Gerstner)

Creating a high-performance culture is the ultimate game for any organization, and establishing a magic circle is an important facet of building a culture, though it’s difficult to achieve. Culture is amorphous – tough to identify and nail down.

For example, take this story author David Foster Wallace included in his 2005 commencement address at Kenyon College: Two young fish are swimming together. They encounter an older fish swimming in the opposite direction. “Morning, boys,” the old fish says to them. “How’s the water?” Getting no answer, the old fish swims away. One young fish turns to the other and asks, “What the hell is water?”

Water is your culture.

Your employees are immersed in your organizational culture, as fish are immersed in water, though most people aren’t conscious of their corporate culture or what it entails. Generally, leaders are equally blind to culture and don’t understand the impact their particular sphere of responsibility has on their organization.

Despite this fundamental problem, leaders must get in touch with their corporate culture, because it wields a tremendous organizational influence, be it negative or positive. A positive culture improves “energy, engagement, retention, performance, and competitive advantage.”

“You can’t play the game if you don’t know the rules. And if you don’t know the rules, someone’s bound to get hurt. ” (Best-selling author Alyson Nöel)

Organizational culture is always present, and each company’s culture is unique. Culture affects every aspect of a firm and its employees’ day-to-day activities. Leaders must specifically plan and design the way they intend to support their organization’s distinct culture.

Unfortunately, leaders in most organizations don’t prioritize culture. If culture comes up, they may offer a few suggestions for improving it, but they seldom delve into it. Under such circumstances, organizational cultures rarely improve without external pressure.

A high-performance culture depends on three factors: “alignment, performance, and improvement.”

Culture rests on three crucial pillars:

• Alignment – Unless most employees wholeheartedly and independently line up to support their organization’s primary ambitions, its culture will remain conflicted, weak, and out of balance.
• Performance – Organizations define performance differently. For-profit enterprises generally measure success in terms of sales and financial gains. Nonprofits assess other factors, such as efficiency, programming, enrollment, and fundraising.
• Improvement — An organization’s people must be continually alert to improving its culture. Backward-looking organizations that fear change and don’t consider ways to upgrade their culture become static over time.

Follow three rules. First, “Aspire” – ambitiously pursue clear goals.

In 2006, veteran business executive Alan Mulally took over as the new CEO of Ford Motor Company. One of the famous Big Three automakers, Ford had fallen on hard times. The company was on track to lose billions of dollars. As CEO, Mulally quickly set new goals and established the “One Ford” concept, which involved “a purpose, a campaign, a strategy, and a plan to revitalize” the company.

“Culture is a beast – the question is: Has the beast been tamed, its immense power harnessed for good or does it terrorize the inhabitants of the realm?”

Jump-starting Ford’s culture was a significant component of Mulally’s goals as he revamped the corporation. He wanted to enable Ford’s workers to regain their pride in their company’s storied heritage and participate in the profitable future the organization and its workforce could build together.

Mulally became the high-profile steward, champion, and guiding light of Ford’s culture. He strove constantly to adapt Ford to the new exigencies of contemporary business life – challenges that were completely different from those Henry Ford confronted when he started the company in 1903.

Second, “Amplify” – continually extend and expand your vision and your company.

As executive leadership coach Marshall Goldsmith states, “What got you here won’t get you there.” Organizations and their people can never rest on past achievements. They must always be willing to try new approaches.

“We must diligently monitor and enhance the culture forever. Translated, this means we must always listen, learn, and change.”

Organizations must look to the future. This means they must extend, expand, and amplify. These are unassailable cultural imperatives; if your organization isn’t moving ahead, it’s slipping behind.

Third, “Adapt” – change when necessary.

When your organization has to change to remain competitive and profitable, your culture must change as well.

Consider the New Zealand All Blacks professional rugby team, which launched in 1903 under the name “Originals.” The team was a winner from the start, amassing an astounding 35-1 record in its first international season. It ruled as an international powerhouse for more than 100 years, until the 2004 Tri Nations Series, when the All Blacks finished last.

What turned these formidable former champions into has-beens? Their culture had failed to adapt. The players, coaches, and owners – indeed, the entire nation of New Zealand – had come to expect winning as the team’s natural due.

“We shouldn’t be too surprised that the All Blacks’ culture had begun to rot from the inside. Unless intervention occurs, all organizational cultures do.” (Leadership expert James Kerr)

After its horrible loss, the team addressed two overarching questions: “What went wrong, and where do we go from here?” The clear answer was that the All Blacks had to adapt. The team defined what that meant by recognizing that reacting is not adapting. Adapting is embracing a foreordained path of action. The team knew it had to foment change on its own terms for its own progress. The All Blacks made significant changes, and today the team is once more an international winner.

Leaders must inspire their team members to boost their morale.

In 1909, explorer Ernest Shackleton undertook his second expedition to Antarctica. After tremendous hardship and struggle, he and three intrepid crew members had to give up on their ambitious goal to trek by foot to the South Pole. At risk of starvation, they abandoned their quest 97 miles short of their target.

Great honor and acclaim greeted Shackleton and his men back in England. The king knighted him. In late 1914, undeterred by his previous failure, the celebrated explorer returned to Antarctica to trek the length of the continent from sea to sea. For this Trans-Antarctic Expedition, Shackleton brought 28 men and more than twice as many dogs aboard the customized, fortified vessel Endurance, which ocean-goers regarded as the most formidable exploration ship in the world.

“If you’re a leader, a fellow that other fellows look to, you’ve got to keep going.” (Ernest Shackleton)

On January 18, 1915, the Endurance became trapped in the Antarctic ice. Late that year, Shackleton and his men abandoned the ship and their trekking goal. The ice crushed the Endurance, but after renowned travails and adventures, Shackleton and his men got safely back to England.

Shackleton handpicked tough-minded men for this dangerous adventure. He knew he had to inspire them and instill a robust, never-quit culture. Shackleton understood that his team required a culture that relied on “optimism, patience, imagination, and courage,” and that is what he created. The crew’s culture matched Shackleton’s family creed: “Fortitudine vincimus” (By endurance we conquer).

A great organizational culture depends on great leaders.

Although the cultures of organizations all involve magic circles, great cultures do not develop by themselves. They need leaders’ direct intercession. Leaders “animate” culture, bringing it to life. Leaders must exercise authority, earn trust, and inspire their teams with their vision. But they can’t create a culture alone or in a vacuum. They need their team’s enthusiastic concurrence and the active assistance of their employees.

“Those who don’t know the rules, ignore the rules, [or] violate them intentionally or unintentionally will never play the game well; some will even be disqualified.”

Purpose steers a high-performance culture and gives your workforce a sense of an elevated mission. Such a culture supports your organization’s competitive advantages, enabling it to lead its market and its industry.

Leaders who fail to play the cultural game and who don’t work on continual cultural improvement risk negative results. A weak culture leaves your company vulnerable to employee churn, disengagement, lack of communication, dismissive attitudes, and lack of trust.

Organizational culture is a giant, heavy flywheel. Getting it to spin on its own requires maximum effort.

Referring to the creation of something as complex and multifaceted as organizational culture, leadership author Jim Collins employed the metaphor of a huge, ponderous flywheel. To get the giant flywheel going, people must rotate it, turn after turn, creating sufficient momentum to cross the threshold at which the flywheel can spin on its own.

“[Culture] affects the thoughts, feelings, beliefs, decisions, and actions of every employee every day.”

In Collins’s example, no single turn of the flywheel is more important than any other. What counts, he writes, is the collective sustained effort resulting from everyone working to make the flywheel turn.

Fomenting positive cultural change takes time and effort, like turning a giant flywheel. But no matter how long cultural change takes, it remains a vital foundation of every organization’s ongoing health and productivity.

About the Author

Mark Miller is the author of The Heart of Leadership: Becoming a Leader People Want to Follow, Chess Not Checkers: Transform Your Leadership Game, Smart Leadership: Four Simple Choices to Scale Your Impact, Uncommon Greatness: Five Fundamentals to Transform Your Leadership, and more. His first book was The Secret: What Great Leaders Know and Do, co-written with Ken Blanchard, co-author of The One-Minute Manager. Miller began at Chick-fil-A as an hourly worker and became an executive serving in multiple areas of the company, including training and leadership development.