Company culture is fascinating. Companies often speak of their sense of family, commitment to one another, and purpose in the community, especially when seeking new workers. However, this is often little more than marketing and lip service. Anybody who has worked for a company knows that most of the time, cash is king, and nothing else matters. Company culture is often little more than a farce, a cheap facade intended to dupe people into believing that companies care about something other than their bottom line.
But times are changing. People realize that company culture does matter. To help us understand how company culture can go wrong and what entrepreneurs and business leaders can do to get it right, we spoke with Mark Babbitt and Chris Edmonds. Babbitt and Edmonds have decades of combined experience in leadership development and cultural architecture. They make their living by pursuing their mutual sense of purpose to make work less painful. In short: these guys know that work sucks, and they want to change that.
Mark Babbitt’s story begins in the career space. Babbitt spent his early career helping place young professionals into workplaces that, all too often, were nightmarish hellscapes of beige cubes and fluorescent lights, patrolled by soulless middle-managers on the prowl for employees to maltreat. As time went on, Babbitt realized that his work was not aligned with his own values. About ten years ago, he decided to strike out on his own to help companies learn how to value their employees. He became a culture architect, a designer of systems that help companies of any size make their workplaces better. He helps leaders understand that changing their culture is an opportunity to truly transform their organization. Most importantly, Babbitt knows how to translate human decency into business-speak. He helps leaders understand that if good comes first and respect for one another is the most important value in an organization, success in other metrics will follow. Babbitt’s mission is to guide leaders toward a purposeful, positive, productive work culture.
Like Babbitt, Chris Edmonds is intimately familiar with corporate America. After spending more than 35 years in the leadership development space, Edmonds has learned the ins and outs of corporate culture and how it affects business. Edmonds collaborates with business leaders to help them repair broken cultures or build good ones from the ground up by developing an Organizational Constitution based on the concept of servant leadership. Developing an effective Organizational Constitution requires leaders to define why they are in business outside of the desire to make profit. Leaders must identify who they serve and why they serve them. This fundamental reorientation to reality helps leaders define the values and purpose of their organizations and align their business practices accordingly. Edmonds, in other words, helps leaders actualize the culture they think they have.
Defining Company Culture
Most companies would likely choose from the same bucket of buzzwords to describe their culture. Terms like “team-focused” or “collaborative” or even, if you want to stretch it a little, “nurturing,” are frequently bandied about to attract employees, much like the sweet scent of the venus fly-trap entices nearby insects. Anybody who has worked for a company can tell you that the words used to describe culture are almost always completely detached from the reality on the ground. Usually, a company’s culture is actually focused on making as much money as possible regardless of the consequences. So how can we evaluate what a company’s culture actually is?
Babbitt says that the best way to define a company’s true culture is to think about how it feels to work for that company. The question “How do I feel when I’m working here?” is an excellent starting point. Do you feel supported, cared for, and valued? Or, more likely, do you feel browbeaten, aggravated, overworked, and underappreciated? Many workers today may even feel helpless, depressed, resentful – or even angry. Another critical question that is useful in evaluating culture is, “How do we get our work done?” There are probably at least two answers to this question in the average company. Leadership might say something like, “We work collaboratively to leverage the collective knowledge base of our team and provide high-quality solutions to our customers.” That sounds great, but is it true? Probably not. An employee who does actual work might say something like, “My boss gives me a crisis assignment but refuses to allocate the resources I need to fix it, so I half-ass a solution and hand it in at the last minute. Other days, I spend hours waiting for someone else to complete a task so I can do my part.” If your people feel alienated and disaffected, if their workflow is marred by ridiculous deviations and impossible tasks, your company culture is probably toxic.
Does Your Culture Respect Humanity?
According to Edmonds, most employees have bad experiences in a company because the employee experience has been discounted by leadership. Leaders focus on business metrics and financial goals, not on employee happiness, because that’s what they’re trained to do. Business degrees are all about making and managing money, not about making people happy and meeting their needs. Many leaders legitimately don’t know how to create a culture or an environment that values and respects and validates human beings because their entire education is built on efficiency and making money. These kinds of leaders can’t create a culture that respects humanity and human needs because those needs are not compatible with the modern business ethos of doing more, more efficiently, all the time.
Sometimes, leaders simply eschew concerns about culture altogether. A real-world example comes from one of Florida’s busiest hospitals, where the respiratory therapy department achieved a startlingly bad employee engagement score. The therapists, whose job includes running life support, were even less engaged in their work than people in the chronically difficult workspaces of housekeeping and food service. On seeing the results, leadership decided that the employees had simply answered the questions wrong. Instead of addressing a notoriously bad workplace culture, they hired a consultant to coach the therapists on how to answer the questions “correctly” so that their scores would go up. No wonder their engagement scores were rock-bottom: the department’s leadership team was arrogant and self-absorbed, and viewed their employees as expendable cogs instead of as human beings or experts in their field. This scenario probably sounds familiar to many people. Leaders often refuse to acknowledge that culture is a problem, preferring instead to blame or dehumanize employees and carry on with business as usual.
Growing Incivility: More Than a Company Problem
Part of the problem with modern business culture relates to incivility. While rudeness and arrogance in business are nothing new, our society as a whole has been undergoing a descent into chaos. A quick swipe through any social media app shows us that Thomas Hobbes’ “war of all upon all” seems to be raging away. Indeed, Babbitt notes that our role models and leaders in almost every arena of life seem to be displaying worse and worse behavior. This has made a lack of civility socially acceptable, especially in the workplace, where many bosses and managers get a kick out of exerting their power.
But things are changing. During the pandemic, many people got to work from home and realized that when they have control over their environment, their hours, and their preferences, they were able to get their work done more effectively, with less stress and more control over their lives. Now that companies are orienting back to the way they used to be, people are simply opting out of their toxic workplaces, soulless bosses, and crappy jobs. The American worker’s realization that they don’t need to endure abuse has led to the Great Resignation.
While many businesses and executives like to whine that “nobody wants to work anymore,” the truth is that people just don’t want to work for them anymore. People are tired of business as usual. It’s unrewarding to work in an environment where CEOs and executives enjoy lavish perks and positive attention from the press while the workers who keep the business running endure inhumane working conditions. Many workplaces are riddled with bullying and hostility. Why should your employees be civil to you if you won’t be civil to them?
Edmonds says that employees are quitting their jobs for three main reasons. First, they don’t feel valued by their organization. Second, they don’t feel valued by their bosses. Third, they don’t feel any sense of belonging at work. These reasons are all tied to company culture, and two of them are directly related to employers treating employees poorly. If your company culture tolerates disrespectful, rude, demeaning, dismissive, or otherwise hateful behavior, employees are going to leave. Leaders can no longer hide from the fact that many of the reasons employees are quitting are due to shabby leadership and toxic company cultures. The changes in work that were driven by the pandemic shone a lot of light on workplace conditions, and made people realize that they should expect more from their employers. This is especially important for entrepreneurs and small businesses. If you want to stay afloat and survive the new normal, you have to pay attention to how you’re treating your employees and take steps to change your culture if it isn’t working.
Growing A Positive Culture Ab Initio
Entrepreneurs and small business leaders enjoy a unique opportunity to develop a strong company culture from the beginning. Most business cultures, Babbitt says, are incidental or accidental: the company has put little to no thought into culture. Nobody has ever asked questions like “How do we develop a positive culture?” or “What should our values be?” But in the absence of planning for culture, culture evolves organically based on the values demonstrated by the company.
An organically growing culture might sound great, especially if you’re in the yogurt or cheese business. However, Edmonds reminds us, modern business and hustle culture can bring out the worst in people. Entrepreneurs and business leaders often act on short-term, financially oriented goals: make more money, no matter what. Their business pursuit is explicitly and exclusively oriented around money-making. And while American culture values wealth above all else, sometimes even viewing material wealth as a proxy for moral righteousness, a fixation on money over all else doesn’t work if you want to build a thriving business. With very few exceptions, businesses rely on people to perform the tasks that generate profit. When people feel undervalued, alienated, or disengaged, they will not perform to their fullest potential. If you treat them really badly, they may even begin to engage in sabotage or find other ways of undermining your business. More likely, however, they’ll just flip you the bird and quit.
If you need proof, it’s unfolding all around you. American workers are abandoning their jobs at a record rate. 44 million US workers quit their jobs since January 2021, a record high after six months of consecutively high quit-rates. Workers are realizing that their time is valuable and that they don’t have to put up with abuse and toxicity anymore. Unhappy employees might phone it in for a few months and pretend to work while they farm out their resume, but few people in today’s world will voluntarily stay in a toxic environment. They’ll eventually leave you high and dry for someone who treats them well.
So how does an entrepreneur or a small business leader develop a good company culture? It might not be an exciting answer, but the key to developing a good culture is empathy. It is vitally important, Edmonds says, to treat your people well and remember that they are human beings, not just task-facilitators. Human beings – remember, your workers are human beings – thrive in empathetic environments. Even insurers, who are not known for being bastions of human kindness and empathy, are noticing that a lack of empathy creates very real risks for businesses and people. Do you really want your business to mirror the dysfunction you see in the world around you? You can’t take the position that your employees are expendable tools and develop any kind of positive or flourishing culture.
So how can you develop empathy? It is as simple as forming a relationship with the people on whom your success depends. That would be your employees, customers, investors, and partners. Sometimes, leaders find this challenging: the little people often don’t share your excitement or passion about your business. But empathy can fix that problem! Taking the time to co-create, engage, and build rapport with your people helps you build a bond and find a mutually agreeable sense of purpose. Don’t be an empty suit: take the time and make the effort to be human with your people.
Default Settings: Less Than Ideal
Since most companies don’t take the time to articulate a reality-based vision of their culture, many leaders are working with what Edmonds terms the “default settings.” These cultures are incidental to the way the company does business. Often, leaders are completely unaware of the culture that exists in their organization. The Director of Operations, for example, probably doesn’t get too close to the actual operations of a given company, and thus has no idea what the culture is on the ground. Does the VP of Information Systems actually engage with the information systems beyond a few luncheons with vendors? Do they know your system analysts, what they do, how they function? Almost certainly not. Leaders may not be aware of how employees or other stakeholders are being treated because they deliberately isolate themselves from the actual work of the company.
Traditional leadership’s failure to create positive culture is also a function of how leaders see the world. Business leaders see the world in terms of productivity metrics and lack tools to focus on how people are treated. Your typical company does not evaluate metrics regarding respect or civility in the workplace. Leaving the chain of command to complain to higher-ups is generally frowned upon, and even if they were empowered to speak to people above their level, employees usually do not enjoy a trusting relationship with management. Employees therefore have little recourse when faced with managers who are indifferent or toxic, which creates pockets of toxicity in your company that can spread like a bad aroma on a windy day when different departments have to interact.
Further compounding the problem, leaders often suffer from some form of confirmation bias. Managers don’t want to hear about problems because problems distort their rosy view of reality. A problem on your team might mean you’re doing a bad job, and for many leaders, the notion that they might be anything less than perfect is literally inconceivable. This dynamic often leads managers to shoot the messenger and attack, either directly or indirectly, employees or subordinates who bring up problems. It’s easier and more efficient to browbeat or lie to someone than it is to address systemic problems that may or may not stem from your own behavior, so many leaders and managers choose the path of violence instead of reflecting on how they can do better.
All of this isn’t to say that changing culture is impossible or futile. Both Babbitt and Edmonds have decades of experience in changing cultures at companies big and small. It is very possible to move your culture away from the blandly dystopian world of business as usual, but success is dependent on making a sustained and meaningful effort. Truly transforming a culture can take more than a year of ongoing work. Babbitt and Edmonds estimate that a typical company might take as long as 18 months to see real changes in their culture. But when a leader is invested in cultivating a positive and healthy company culture, change can come to even the most inert organizations.
Why Can’t We Just Get Along?
In a lot of ways, the problem with modern company culture is that companies have lost sight of the idea that people should take care of each other. Business schools teach that profit is a moral end in and of itself that supersedes any other needs. The fiduciary responsibility of a business to the shareholders outweighs any other moral or ethical concerns. Business leaders often feel no real responsibility toward their employees: modern business is almost exclusively shareholder-oriented. In many cases, business leaders and executives eschew even that responsibility, choosing instead to focus entirely on personal enrichment. How have we gotten to a point where business leaders will wreck a company’s culture and make countless employees miserable in exchange for a few bucks?
According to Edmonds, part of the problem is ego. Our ego is defined by our perception of our purpose. As our society as a whole has pivoted to selfishness and entitlement, so have our company cultures. Culture becomes oriented to money at the expense of all else. Leaders fail to consider the people and purposes they should be serving because money is more important to them. That behavior drives a culture where people are tools, and today’s collaborators are tomorrow’s competitors. It allows business leaders to make excuses about why they tolerate toxic employees. George down in Sales might scream at his team, make insensitive and cruel remarks, and lie to customers, but if he’s turning big numbers for the company, nobody bats an eyelash. A myopic focus on profit leads to the dysfunctional cultures that Babbitt and Edmonds have dedicated their careers to correcting, cultures where toxicity and bad behavior and even crimes like wage theft are tolerated.
The solution, according to Edmonds and Babbitt, is to restore a sense of servant purpose. Servant leadership is built on the idea that leaders exist not to ruthlessly extract surplus value from the labor of their workers, but rather, to facilitate the work that their people are undertaking. In servant leadership, the work itself has a servant purpose. It accomplishes a meaningful task for internal or external customers. When everybody in a business understands the core servant purpose of the business, and when that purpose is meaningful, a business will flourish and thrive.
This behavior has to be modeled from the top down. Babbitt emphasizes that a significant piece of the company culture puzzle is the lack of leadership in addressing deficient behaviors. Leaders have to set the tone for their entire organization, whether you’re an entrepreneur dealing with freelancers or a small business executive looking to grow your firm. Your actions as a leader will set the expectations of the entire company. To transform culture, leaders must stop tolerating bad behavior. Sometimes, that might be hard: it could mean firing a 20-year veteran employee when they make a sexist remark, or setting your long-time business partner free when his attitude begins to stink. You must treat your colleagues, partners, vendors, customers, and employees with kindness, dignity, and respect. You must value your people in a meaningful way. It all goes back to what Dale Carnegie said: if you want to harvest the honey, don’t kick over the hive. This is the philosophy that should drive your culture. Take the time to treat your people well, and your business will thrive.
Growing a Positive Company Culture: Five Tips For Success
So how can you grow a positive company culture? It might seem impossible to steer the ship of culture away from the rocks of greed and avarice, but it can be done. There are plenty of companies that enjoy thriving and positive cultures. If you want your company to attract and retain high-quality talent and reliable customers, developing a positive company culture is an essential first step. Here are five tips for growing your company culture the right way.
1. Build positivity from the ground up.
When you’re starting a new business venture, you have an opportunity to build a positive culture from the ground up. Even if you’re not starting a new company – perhaps you’re taking the helm of a department in an existing enterprise – you must begin by investing in your team. In fact, Babbitt and Edmonds recommend that you spend as much time investing in your team as you do investing in business metrics. Business reporting is essential – we have to know how our productivity, sales, and profits are in order to maintain a viable business – but the people who make your business work are just as important.
How do you invest in your team? First, model the behaviors you want to see. Edmonds tells us that you should demonstrate behaviors built on integrity, respect, and dignity. Don’t tell demeaning jokes, tease employees, or talk smack about vendors or competitors, and don’t tolerate those behaviors from your employees. Take the time to engage with your employees. Talk to them, pay attention to what they’re doing, be curious about them. Treat your employees (even contractors and freelancers) like human beings. Value people for who they are and establish an environment of openness, trust, and caring. Establishing a positive culture is more than just words. You have to invest time and energy into cultivating a positive workplace, and if you’re not willing to make the effort, you won’t get to enjoy the result.
2. Behave with integrity.
As a business leader, you are a role model. Your team is going to look to you to see how they should behave. If you’re telling employees to be nice to one another but then you turn around and scream at the IT guy for a minor mistake, you’re subtly telling your team that real behavior matters less than just saying the right words. That is not integrity. Integrity is meaning what you say. If you tell your employees that they should value everyone and treat them with respect, you must model that behavior for them – and you must be willing to correct errant behaviors when you see them. If one of your workers is abrasive with customers, rude to vendors, or creating an unhealthy office environment, you should correct the behavior with kindness and establish clear boundaries around behavior. And if they are unwilling to change, it might be time to set them free.
3. Embrace servant leadership.
Dysfunctional business cultures are almost always based on a profit-before-people model. The business, according to the actions of leadership, exists for the sole purpose of extracting money from customers. This attitude does not drive positive behaviors. To create a positive culture, business leaders need to pivot to servant leadership.
How can you shift your culture towards servant leadership? Babbitt tells us that you should ask the question: beyond making money, why am I here? Who do I serve? How can I serve my people, my customers, my community?
Servant leadership might sound naive, but Babbitt and Edmonds have found that companies with a purpose beyond profits are about 800 times more successful than companies with a more transactional worldview. Part of this success comes from the power of a meaningful mission to attract and retain talent. If your business models an ethos based entirely on enrichment, your employees will follow your lead: as soon as someone else dangles a bigger paycheck or a better benefits package, they’ll be out the door. And chances are that they won’t work especially hard for you while you have them. In the immortal words of Peter Gibbons, money will motivate you to work just hard enough not to get fired.
Letting a servant purpose steer your company sends a powerful message to everybody your business touches. It helps you cultivate good relationships with the people you rely on, with external players, and most importantly, with your customers. You won’t have to entice workers by paying more or buying nap pods or providing ping-pong tables or catering lunch every day, because people will be working for a higher purpose. If you’re an entrepreneur who’s just starting out, it’s easy to build this culture from the ground up: align everything you do to your higher purpose and your business will reap the benefits. If you have an established business and you need to change the culture, just remember that this is a journey that is going to take time and effort – but it is worth doing.
If you still need convincing, Edmonds has an example from a printing company. This firm could produce hundreds of thousands of prints an hour, printing things like brochures and catalogs for a variety of customers. The culture at this company was traditional: when interviewed, company leaders said that the company existed to make money for the shareholders. As you’d expect, the culture at this company stank like a hot day at the landfill. The company’s leaders eventually realized that their culture wasn’t working, and they met with Edmonds to learn how to redefine themselves with a sense of purpose. After evaluating their business in terms of servant leadership, their new culture wasn’t based on the idea of making money by printing things, but on the notion that they existed to help their customer’s businesses thrive by providing high-quality printed products.
This manifested one day when an employee noticed that a press was printing an incorrect shade of green on advertisements for an important client. At 20,000 impressions an hour, this industrial printer was going to make a lot of mistakes very quickly. The employee hit the emergency stop to halt printing. Before servant leadership, employees would have been reamed or even fired for costing the company money by hitting the hard stop. Before servant culture, the company likely would have delivered 500,000 off-color prints to the client and shrugged it off: it would have been “too expensive” to shut down the machine even if it led to an unhappy customer or damaged business relations. After servant culture, employees felt empowered – and, more importantly, obligated – to pause business to ensure that they did the right thing even if it cost a few extra bucks. Long-term, keeping your customers happy is better for business than screwing them over in the name of minimizing expenses. Servant leadership works.
4. Build a sense of community.
To build and maintain the momentum needed to change your culture requires that you build a sense of community within your company. Your people should feel like they belong. Belonging nurtures respect for company leadership, reduces turnover, and can even make work almost pleasant. The feeling of belonging stems from feeling respected. In companies that have successfully developed a culture of belonging, employees will tell people that they can’t imagine working anywhere else. Not only will they want to stay with you, they’ll bring their talented friends and colleagues with them. They will want to develop and enhance that work community to help other people belong as well. This has obvious benefits for any business. When people feel like their leaders and peers care about them, and when they can see a sense of purpose in their work beyond enriching the executive class, they will enjoy work. When they enjoy work, they perform better.
When you’re building a sense of community, remember that there are no shortcuts. The only way to build that sense of community is to engage with your employees. Treat them well. Be kind and empathetic. Accept that your employees are human and that they will be subject to human emotions and conditions. Do what you can to help them. If they need a mental health day, give it to them. If they need flexibility for childcare, let them have it. Abandon the ridiculous notion that your business should matter more to them than their family. Showing your employees that you care about them will foster a sense of community in your workplace. Another excellent way to cultivate a culture based on belonging and caring is having conversations about what you can do to help your employees develop professionally. Professional development benefits them and you. When people feel like they belong, when there’s an environment of caring and community, they are not going to want to leave.
5. Make culture a metric.
Business leaders thrive on metrics. Performance dashboards, KPIs, productivity reports, and other data drive business behaviors. Unfortunately, as we’ve explained, the fact that these metrics focus almost exclusively on extracting profit tends to drive a barbaric and cruel business culture. Edmonds suggests that businesses find meaningful metrics to evaluate their culture. This might sound highfalutin, but it doesn’t have to be complicated or difficult. Create a valued behaviors list and apply it through 360° evaluation. If employees struggle with the valued behaviors, meet with them and have open and honest discussions about why they are struggling. Engage your people, and model the behaviors you want to see. If people still refuse to behave according to the valued behaviors, set them free: tolerating toxic and radioactive behaviors will kill your culture like a lawnmower running over a sapling. When the people in your business know that their performance is evaluated not just on profits, but also on how they treat the people around them, they will behave accordingly.