In recent years, consultants Adrian Gostick and Chester Elton kept hearing the same lament from corporate clients: “It we can’t get our culture right, nothing works.”
The longtime partners and collaborators, who specialize in employee recognition, teamwork and culture, had long ago identified keys to building teams whose success could generate such strong momentum as to transform entire organizations. They wrote about those strategies in “The Orange Revolution,” a follow-up to their bestseller “The Carrot Principle,” which focused on how the best managers use recognition to keep employees motivated and dedicated. They backed their strategies with research involving hundreds of thousands of employees at a wide range of companies.
They have built an impressive file of corporate case studies that demonstrate the keys to workplace success. “Zappos is one we had written about before they were even cool,” Gostick said in an interview. “The teams know exactly how to make the culture work for their team. There are some nuances, but the teams are part of a big, structured organization, and the culture is clear. The problem is that most of us find ourselves in places that aren’t as clear. The team leaders think that the culture is defined, but it’s just not. So what we find are these oases of culture and teams in sometimes dysfunctional organizations.”
So, the two set out to pin down strategies for creating the sort of culture that demonstrably works the best. The result is their latest book, “All In: How the Best Managers Create a Culture of Belief and Drive Big Results.” Published recently by Free Press, the book has hit the New York Times, Wall Street Journal and USA Today bestseller lists. In it, Gostick and Elton offer a seven-step road map for creating a successful culture, as well as a quiz to determine if a work culture is dysfunctional and a list of 52 ways to get employees to be “all in.”
They worked with Towers Watson to analyze a 300,000-person study involving 25 high-performing companies, which helped them identify the traits of workplace cultures where employees believe in their leaders, but also understand and work for the company’s mission, values and goals. Employees at such companies exhibit what Gostick and Elton call “the three Es”: they are engaged, enabled and energized. Particularly notable is that the study was conducted during the height of the global recession and yet when financial data from a pool of 50 global companies was studied, those that displayed high levels of the three Es also had average annual operating margins of 27.4 percent.
The operating margin is the percentage of sales left after a company pays wages and for raw materials and other costs, and, as they note in their book, “operating margins above 27 percent are rare and worthy of exploration. They indicate efficiently run organizations, but also ones where customers are willing to pay a premium for their services.” The Towers Watson study further found that the 27.4 percent annual average was nearly three times higher than the 9.9 percent achieved by companies found to have low employee engagement, and that companies identified as having high employee engagement came in at 14.3 percent. Clearly, the other two Es of enabling employees, in part by empowering them to make their own decisions, and finding ways to keep them energized, make an enormous difference.
As is often the case with management sorts of issues, what seemed fairly straightforward was anything but that.
“We had all this data and as we went out to talk to clients, we would talk about the three Es,” Gostick said. “We had one manager raise his hand and say, ‘That makes sense, the three Es. Yeah, I get it. But how do I do it?’ It was kind of a slap in the face. We said, ‘We’re presenting all of this data, isn’t that enough?’ And he said, ‘No, I need to know how to get there.'”
The next step then was to identify leadership characteristics that are always part of a high-performing workplace culture — things such as a strong focus on customers and employee recognition. They identified six that they thought they could put in a sort of “catch-all bucket,” but their editor pushed back at them, saying the data showed, for instance, accountability characteristics that weren’t on their list. They kept at it, working with researchers to identify 50 or so characteristics of the best managers and cultures and then “putting them into the right buckets” to create different models for building effective corporate culture.
“We would bounce them off our editing team, we would bounce them off our clients, and there were parts that were sparking and parts that weren’t,” Gostick said. “When we got to our seven it was a real ‘ah-ha’ moment.”
Out of that work emerged a road map of seven steps that have what they call the “most powerful effect.” The seven points, which the book elaborates on in detail, are: clearly define the corporate mission; create customer focus; develop agility; share everything; treat employees like partners; cheer for each other, and establish accountability.
The book blends the research they analyzed and case studies from their consultancy, The Culture Works, into a practical how-to guide for creating a successful workplace culture. Along the way, they advocate for leaders to create workplaces that are fun, where camaraderie among coworkers is a given. Gostick pointed to the corporate cultures of Google, Southwest Airlines and Apple as examples of that. “A woman at one of our presentations said she works a 40-hour, full-time job and then a Saturday job at an Apple store. She said, ‘That Saturday there helps me keep my sanity the rest of the week. We have so much fun. They treat us so well there,'” Gostick recalled.
“The best cultures we studied do fun things,” he said. “Microsoft blasts music to get everyone up and moving. Everyone needs a little dose of levity.”
He and Elton have over the years heard the concern that fun for one person might not be fun for another person and what happens if someone is offended by office levity (they give examples of such situations in their book as well). “So what if somebody is offended,” Gostick said. Besides which, as the book suggests, people who take offense at having fun at work probably need to find themselves some other place to work.
Grumpy attitudes about having fun at work also tie directly into the need to get people to believe in the company’s mission and goals — the “all in” of the book’s title. People have to be persuaded to believe, Gostick and Elton write. Like many other business and management-focused books these days, they bring neuroscience into the mix, as research into how our brains are wired and how they work (or don’t work so well) increasingly is linked to all areas of life, including the office.
It can be woefully difficult to get people to give up their routines — even those that don’t work well — and their bad habits. Banishing ingrained skepticism and pessimism to achieve an “all-in” environment requires patience, perseverance and skill. But even in a place that falls short of the high-performing success stories that Gostick and Elton use as examples, individual departments can bring about positive cultural changes.
“The ideal way is top down, but if you find yourself a manager of 10 people in an IT department, don’t give up hope,” Gostick said. “You can still have a great team.”
That great team, he added, will influence other teams and that’s how the roots of a more successful corporate culture will begin to take hold.