On Leadership and Culture.

The Future Does Not Fit in the Containers of the Past.Edition 268.

Companies and organizations that thrive excel in two areas:

Leadership and Culture.

They are both key and closely intertwined.

A. Leadership.

Leadership can be distilled down to this:

1. Leaders acknowledge, face and communicate reality.

2. People follow people and not titles since titles are bestowed while leadership is earned.

3. The six characteristics of great leaders are capability, integrity, empathy, vulnerability, courage and inspiration.

Reality.

A key to leadership is to solve challenges and address problems. This requires confronting issues versus looking away or hoping some form of magical thinking will make them go away.

People will not follow a person if they suspect they are not addressing real issues and challenges however difficult they may be.

Followership.

Without the hearts and minds of the team one is not a leader but a ruler.

Rulers leverage fear, project power and exploit insecurity.

Employees genuflect, fall in line, salute and pander to the hollow and bloated boss, while they silently seethe, plot insurrection or practice defection.

Six Characteristics.

a) Capability: To be a leader one must be capable in one’s field of work or craft and to keep improving and honing one’s skill with a dedication to a growth mindset. Doctors will not listen to doctors who are not great at medicine. A creative will not respect someone whose body of work they do not admire.

b) Integrity: Can one be trusted? Does what one says, what one does and how one behaves aligned and also resonate with the rules of science and economics ?

c) Empathy: Leaders can see from other points of view and they understand that employees are people and work is a very important part but it all of their being. They understand and they listen. They care. They do this both for employees and for customers.

d) Vulnerability: Great leaders acknowledge mistakes. They know they do not have all the answers. This means they are open to criticism and correction and they surround themselves with skills sets that offset and balance their areas of weakness.

e) Inspiration: How do leaders face and acknowledge reality and hard truth but still get people to unite, align and take the challenges head on? They do so by recognizing that people choose with their hearts and not their minds. They inspire through a combination of personal example and storytelling.

f) Courage: The courage to make the hard decisions. The courage to take calculated risks. To understand that sticking to principles often comes with a price.

B. Culture

It has been said that “culture eats strategy for breakfast’ and often when companies decay ( Sears) or resurrect (Microsoft) or have distinctly different outcomes in the same industry (Delta vs American) a key determinant is the culture. What it is like, how it is improving or how it is getting worse.

Next Wednesday on The Rethinking Work Show we will hear from Alastair Creamer and Doug Milliken who co-founded Creamer and Milliken which help some of the best companies in the world on cultural change.

Once I read that the culture of an organization is revealed in how people behave when no one is looking or monitoring their behavior.

It is not just heard or seen but felt as my guests so eloquently stated.

Culture is about people. Yes, it requires leaders to set, correct and support the culture but it is how they treat people and how people feel about themselves, their company and their colleagues that is the fabric of culture.

Companies with great cultures tend to have talent who feel most of the following about their jobs and companies:

1. Excellence: One cannot have a great culture without excellent financial results, products/services and superior talent. People. Product. Profit. At least two of these need to be firing on all cylinders most times. Companies sometimes reduce the emphasis on one to invest in one of the other areas such as reducing profit to invest in new products.

2. Good Compensation and Aligned Incentives: If people are not paid adequately or fairly it really hard to attract and retain the best people to have a good culture. Companies do not need to have the highest compensation but they need to ensure the gap between them and their competitors is managed. But it is not just individual compensation but ensuring that incentives are aligned with the behavior that is expected. If team work is key there should be a greater focus on rewarding team results versus individual results ( though both are important)

3. Recognition : Great cultures recognize contributors and key players ( “difference makers”). They ensure people are heard.

4. Autonomy: People are trusted to deliver with limited monitoring and can access resources to do so. Freedom within a framework versus rule books and overly regimented “play books”.

5. Purpose: Talent believes in the purpose and values of the company and see the role of their company beyond that of just profit but ensuring their customers thrive and giving back to society or community.

6. Growth: The company is growing, has a plan for growth or even if static, the individual is growing and teams are growing by being given opportunities to learn and build new skills.

7. Connectedness: People feel connected to each other and to their leadership. They feel free to speak up and share and even joke. They express themselves without fear.

Solving for and focusing on these seven drivers of culture is one way smart leaders are working to ensure that in a distributed world with different types of employees including AI agents the fabric of culture is not torn.

They and their talent/people leaders will all have different approaches to get there but they all recognize it is key to ensure that each of these seven seeds of culture are watered.

Leadership and Culture and not technology or strategy or size that are the keys.

Photos by Roger Fishman.