It would be hard to find anyone in business today who doesn't believe that culture matters. And perhaps more now than ever when so many organisations are still working remotely.
According to McKinsey's research of over 1,000 organisations employing more than three million people, those with strong cultures (top quartile according to their Organisational Health Inventory) post a return to shareholders that is 60 percent higher than those who are at the median and 200 percent more than those in the bottom quartile.
But even though we all know it matters, most leaders don't know what organisational culture is or how it works.
As a result of the increasing focus from regulators and boards in the last few years, we have seen a whole lot of extra activity around it, most of which might look like it will have an impact, but very little of which will do anything more than make us look like we're doing something.
Many confuse culture with employee engagement. Measuring culture is measuring the system, measuring engagement is measuring our employees' experience of that system. They are not the same thing.
Solving the wrong problem
Children in Hong Kong are asked a question as part of their standard high school admissions test. They're shown a diagram of six car parking spaces numbered: 16, 06, 68, 88, x, 98 where x denotes a car that obscures the number of that space. They're asked what number is missing. It stumps most of them and you may find yourself in the same situation.
The question has absolutely nothing to do with maths. If you flip the diagram upside down and literally look at it from a different angle, you see immediately that the sequence is actually 86, x, 88, 89, 90 and 91 so the missing number is quickly obvious, it's 87.
Organisational culture is just like that. If we don't know the real problem, we'll spend forever trying to solve the wrong one.
Purpose, mission, vision, values
An organisational purpose can be a fantastic catalyst for change, but only if, and it's a very big if, your organisation genuinely has a purpose beyond making money and that purpose is something you're prepared to actively use to shape your decisions and craft your future strategy, most particularly when that is inconvenient.
But don't say it unless you're prepared to actually do it. With apologies to Oscar Wilde, the only thing worse than not having a purpose, is having one that isn't real.
It's exactly the same for mission and vision and particularly, the case for values.
But no matter how many feel-good values statements you have, they are not going to change the culture of your organisation because they are solving the wrong problem. They are trying to change behaviour on the surface, rather than looking at what lies underneath it.
Culture lives in the interpretation of behaviour
Culture hides in plain sight, if you know where to look, beneath the level of individual behaviours and values - in the underlying patterns of 'what it takes to earn belonging in this place'.
Those are the rules of belonging - and they often have nothing to do with values or mission statements.
The good news is this means that culture, and culture change, is much simpler than we've been led to believe. It's by no means easy, but it is simple.
If we know that our team's culture is its rules of belonging, then it is absolutely possible to figure out what those rules are, what we want them to be, and start to nudge them in the right direction immediately.
Culture is the rules of belonging. Change the rules of belonging and you'll change your culture. Align your culture with your strategy and you'll turbo-charge your results.