Jeffrey Housenbold, CEO and Chairman of Sheet Home.
We rightly celebrate business ingenuity and leaders who unleash creativity and innovation, whether it’s developing new products that change the world, reinventing how people access goods and services or finding new ways to engage customers and to surprise. But as business leaders, it’s up to us to build and nurture the force that drives innovation and organizational excellence: corporate culture.
Companies can provide the same or similar products or services, operate within the same business models, communicate with customers on the same platforms, and sell at the same price. The factor that separates average companies and leaders from the really big ones is the culture they build. Company culture is the only differentiator that matters because it ultimately enables teams to achieve more collectively than an individual could do alone.
As business leaders, our challenge is to create an environment where people can be the best version of themselves at work. Our job is to create a space where people can envision a shared future, where they feel free to challenge ideas, innovate, collaborate and use data to serve customers. Over time, our job is to build a culture that drives innovation and execution.
Leading through fear
Products come and go, so it all comes down to culture and people. Disruptive innovation is the norm, so to create lasting value you need to establish, build and iterate a disruptive corporate culture.
It takes a certain kind of leadership to create a workplace where people are confident enough to challenge the status quo. Too many companies have fear rather than trust, and employees are focused on staying out of trouble rather than serving as customer advocates. This mindset may be a holdover from the management culture of the industrial revolution, a time when leaders saw workers as interchangeable gears and supervisors watched assembly floors from an elevated platform to monitor productivity.
Fear-based corporate cultures have information silos and operate under an aura of mistrust and political machinations. There is usually a lack of communication and a mismatch between performance and rewards, which rules out the possibility of meritocracy. In these workplaces there is little empathy, integrity, curiosity or opportunity. People may stay because they need the money, but they don’t bring their best selves to work; they are mercenaries rather than missionaries.
Leading by love
The alternative is led by love, which creates missionaries – people who are evangelists for your organization. If you believe that people are generally good and want to do a good job, your most important role as a leader in the organization is to provide employees with the tools and processes they need to get the job done. You also need to provide a “true north” that employees can use to navigate, communicate the organization’s mission, vision, and values — and model the behaviors you want them to follow.
It doesn’t have to be complicated; the golden rule we were taught as children – treat others as you would like to be treated – underlies many of these principles. Information transparency is such an important tool for creating a trust-based culture where people are their best at work. Leaders need to understand that information is power and push it through the organization to the most local level, providing barriers and empowering their people to operate flexibly within those boundaries.
Communication is absolutely essential to this leadership style. For me, that means seeing feedback as a gift to be thankful for. As someone who has served on over 35 boards in my professional career, I make it clear that I’m here to provide feedback they need to hear, not just what others want to hear. Employee feedback can take many forms, including one-on-one, small group meetings and company surveys, but I also recommend getting out of your bubble and visiting employees to discuss their concerns and ideas. This doesn’t require you to follow every suggestion you hear, but it does make employees feel seen and heard.
A bias for action – based on data
I have a set of principles that have helped me build corporate cultures that are innovative, flexible, and powerful—an approach that unlocks the force-multiplying effect of people being enthusiastic, happy, and aligned so everyone is rowing in the same direction. One of my mantras is that employees should try to get fired or promoted. Otherwise you are just existing. That means challenging established protocols and taking appropriate risks (ie promoting innovation).
A related cultural touchstone that I recommend is a preference for action with decisions based on facts and data. This helps build a culture where calculated risks are not only tolerated, but also encouraged. Failure is an option as long as it leads to learning and continuous improvement. In other words, it’s a workplace where it’s OK to make mistakes as long as you don’t make the same mistakes over and over.
A great corporate culture functions in the same way as a constitution in that it provides a framework, but it is also a living document that adapts and changes over time. It has core principles, often called values and behavior, that guide the entire organization, but the culture will manifest itself in idiosyncratic local ways. This flexibility creates a culture that can endure over time and adapt as the organization grows. When you create an environment with these characteristics, you create the only differentiator of your company: a great culture.