If you were to describe the kind of culture your company needs to “win” in today’s business environment, what terms would you use? I’ll give you a minute (cue Jeopardy music). Chances are, finding adequate descriptors is hard although you likely have an intuitive sense about what kind of culture you need. As I’ve listened to business leaders attempt to answer that question, I would summarize their responses with this statement: They want a high performance culture.
That is really the heart of the matter, is it not? An emphasis on your company's physical environment, perks, team building exercises, flexible work hours, incentive plans and the rest is meaningless if it does not accelerate performance and drive business growth. Unfortunately, when some employees describe their company culture, they do so in terms of the “cool” stuff their employer provides provides rather than the performance expectations and standards the organization consistently promotes, reinforces and achieves.
In our work at VisionLink, my partners and I get a bird’s eye view of businesses from across a broad spectrum of industries and at various stages of development. As a result, we have observed some common denominators of organizations that have developed and sustained a culture of high performance. We could group those commonalities under four characteristics: adaptability, execution bias, alignment and confidence. Let’s look at each.
Terms we would place under the umbrella of adaptability include agility, flexibility and responsiveness. Organizations that win develop the ability to identify, respond to and capitalize on opportunities more quickly than their competition. This means they have fluid systems and an agile structure. For example, most of the companies that are experiencing sustained success have abandoned old performance management systems that are rigid and inflexible. Instead, they employ a mentoring and coaching system that keeps their workforce and management engaged in ongoing, constructive dialogue about plans, expectations, roles and resources.
2. Execution Bias
In today’s business environment, companies that win are those that act—not those mired in endless strategizing. This does not mean they ignore planning or strategy development. Rather, they employ strategic leaders who know how to galvanize teams around a clear vision and empower their people to assume a stewardship approach to their roles. Their people have clarity about the outcomes for which they are responsible and feel a sense of partnership with company leadership about achieving the results that most impact business growth. They know what the priorities are and what is expected of them.
Winning organizations have continuity and organizational integrity. This simply means there is consistency in the way the organization goes about fulfilling its vision, mission and growth goals. Employees feel connected to the purposes the company is serving and their role in its fulfillment. And all systems are organized to ensure there is a unified vision for growing the business. Alignment grows out of line of sight and line of sight occurs when employees recognize the link between the company vision, its business model and strategy, their role in that model and strategy, what is expected of them in that role and how they will be rewarded for fulfilling those expectations.
Organizational self-assurance is the ultimate competitive advantage. However, a culture of confidence is not achieved simply by hiring people with high self-esteem or a proven track record. Confidence emerges in organizations that experience sustained success. They have experienced success enough times and over a long enough period that they know they are going to win. The market has responded to their value proposition and the flywheel effect that Jim Collins spoke about in Good to Great has taken hold. Sustained success grows out of consistent execution. Consistent execution is a byproduct of focus—which occurs when employees have a clear understanding of their roles and the outcomes for which they are responsible. And focus is achieved when there is the alignment.
The Role of Compensation in a High Performance Culture
Given the characteristics just described, what role should pay play in reinforcing the performance standards a company wants to achieve?
Compensation that is designed to help drive a high performance environment gives employees greater clarity about three issues:
- Roles. The way employees are paid helps them better understand what role they play and how their unique abilities should be applied.
- Results. The company’s pay strategy makes clear the outcomes for which employees are responsible.
- Rewards. The compensation approach of the company helps employees understand how they should balance a focus on short versus long-term performance by applying a pay philosophy that rewards both.
When these three elements are present, employees have greater focus. And focus is the starting point of the sustained performance that creates a culture of confidence.
The reality is that today’s businesses must develop high performing cultures if they are going to survive, no less win. The talent wars alone will require this of them. Because of the growing scarcity of skilled talent, companies have to become “irresistible organizations” so they will be magnets for the kind of people they want to attract. They must work on their employer brand and be ambitious in their expectations. They must relentlessly pursue the four characteristics of a high performance culture.