A Stress Test to Identify and Improve Corporate Culture Problems

A deployment to Iraq is about as far from home as you can get, and we constantly strove to maintain positive spirits among our teams. One memorable day, one of my Battalion S4s requested permission to take two helicopters to Baghdad for a re-supply run. Six hours later, a scathing phone call interrupted a routine briefing. It seemed that Johnny's equipment run was not for ammunition and field supplies, but rather for 100 boxes of pizza. This logistics officer risked his career to bring some joy to a bunch of dusty, stressed-out, exhausted troops.

Although my ass got chewed out for approving the request, it was difficult (but not impossible) for me to do the same with Johnny. Although his actions may have been perceived as inappropriate, or not doing things correctly, he was doing the right thing in the face of all that was so inhumane about Iraq. He inspired his team to greatness, one pepperoni slice at a time.

There are lessons here that can be transferred to the private sector. Although we in the military follow a rules-based code of conduct, one of the first thing that Army soldiers are taught are the seven Army values: loyalty, duty, respect, selfless service, honor, integrity and personal courage.

While rules are necessary and important, the Army values place equal importance on what should be done. This emphasis on "should" is one of the hallmarks of high-performance cultures and ethical leadership. This focus on the "right" behaviors is not groundbreaking, yet measurably tying it to corporate culture is a practice that is only just now being brought to the forefront.

The Financial Industry Regulatory Authority (Finra) announced in January that it will be taking a closer look this year at the culture of brokerages, especially in relationship to how it affects compliance and risk management practices -- and ultimately, client/customer interactions.

Finra's announcement follows on a TINYpulse survey of 500 companies and more than 200,000 employees found that 64 percent of employees rated their company culture as poor to moderate. Further, the Deloitte Global Human Capital Trends 2015 Report posits that while culture is driven from the top down, most executives cannot even define their organization's culture, much less figure out how to disseminate it through the company.

Many companies measure employee engagement as a way of determining company culture. But satisfaction and engagement surveys simply document the extent of the problem. The focus must be on culture as the intersection between values and behaviors. It's about how we think, the way we act and our interactions with each other.

As the Director of the Center for Army Leadership, I learned that culture bubbles up from the ground level. The CAL also stressed that an organization's culture must be measured in terms of its style, performance and belief from the perspective of the employees. These three interrelated elements offer a roadmap to where entropy, or actions that prevent the business from achieving its full potential, exists. Entropy, in the form of everything from gossip to bureaucracy to dishonest actions, causes organizations to wither, turn within and, ultimately, fail.

When I work with corporate leaders to apply lessons from the military to private sector cultures, we use a survey to identify what the employees believe at both home and at work and what motivates them. The results supply a view into employee behavior that executives have described as "eye-opening" and a quantification of something for which they previously only had a gut feeling.

The next step is collaborative -- identifying those who can carry the desired culture throughout the organization from the bottom up, not just the top down, and make systemic change to combat entropy. Finally, and this may seem obvious but is not practiced with any robustness, companies must hire people based on the identified values that align with the desired corporate culture.

The adage "culture eats strategy for breakfast" is so much more than MBA jargon. Companies fail when they focus the lens too narrowly on profit and loss and allow values and behavior to run amuck. Satisfaction surveys show the extent of the problem. Putting a stress test to a company's culture offers benchmarks to fix the problem. It is possible to place tangible determinants on something that many may believe is intangible, specifically culture. For corporate leaders, this is one choice that should be a no-brainer.