Simplifying Cultural Transformation: The 5 Cs of Healthy Culture for Leaders

• Companies still have a demonstrably difficult time understanding, managing, and changing culture.
• Organic company cultures depend on candor and empathy emanating from the top of the organization. 
• While culture itself is a bottom-up, grassroots human phenomenon, leadership is charged with the task of creating an environment where this can naturally happen.

Peter Drucker once suggested that “culture eats strategy for breakfast.” While most people generally agree with Drucker, companies still have a demonstrably difficult time understanding, managing, and changing culture.

According to research conducted by Gartner and reported in the Harvard Business Review, large companies spend around $2,200 per employee per year on trying to improve culture. Despite that spending, 69% of employees in the study say they don’t believe in the cultural aspirations of their leaders, while 90% don’t behave in ways that align with them.

Combine that with the fact that employee engagement in the U.S. has hovered around 30% for over sixty years, and that around 70% of corporate change programs fail. Research from the Harvard Business Review suggests that between 80-90% of mergers and acquisitions fail to achieve their stated goals, often because of poor cultural alignment.

On the surface, it would seem that the culture challenge facing leaders today is insurmountable. However, if we look to the science of culture for clues to understand what is going on in the corporate environment, we can begin to make sense of “why” the difficulty, and possibly how to address it.

Embracing the Culture Challenge

For starters, humans are wired for culture. Culture, in the advanced state in which humans have evolved it, is what separates us from the other primate species. As Harvard evolutionary anthropologist Joseph Henrich puts it, culture is the secret of our success. Culture is both part of our individual hardwiring and our social/collective identities at the same time. 

Culture is the process by which we learn, solve problems, adapt, and share stories, values, and meaning with others in our communities. Culture is, Henrich suggests, the “collective brain” that accounts for our success in adapting and thriving as a species. When put together in groups, humans naturally form cultures — this is what we do. The challenge, then, is to create conditions where culture can develop, both from within and without, organically.

Five Cs to Simplify the Problem

Among others, here are five things (Cs) that can help leaders simplify how they nurture culture in ways that fulfill people and drive employee engagement and retention.

1. Caring

Learning is at the center of culture. We start this as a child and continue to embed culture as we grow up. Importantly, cultural learning is much more effective in high-trust situations like the family. If employees don’t have trust and a feeling of psychological safety in an organization, developing culture is more challenging.

Leaders can jumpstart the conditions for culture growth by having genuine empathy for the people around them, and by caring about their employees. This might sound abstract and fluffy, but is the most basic first step in cultivating a healthy culture.   

2. Community

Contrary to the biases of Western societies (particularly the U.S.), humans are not inherently selfish and individualistic. Individualism is a learned behavior. To the contrary, humans are, by design, a communitarian species that is held together by culture.

In the corporate context, community is a primary anchor of culture. To what extent do people in an organization feel part of a community? A positive answer to this simple question is an indicator that the seeds of culture have been planted. The way an organization prioritizes authentic community speaks volumes about its potential for a healthy culture.

3. Commitment

Many company leaders talk a great game when it comes to cultural aspirations and supposed North Star values. However, in practice, these can sometimes amount to hollow words. In her classic book, Walking the Talk, Carolyn Taylor shows how to avoid this in an easy-to-read format.

From the perspective of people (i.e. culture-bearing animals), talk is cheap. Values are made real in material commitments made by leaders. Whether that is who is hired and promoted, how people are compensated, how evaluations and mentoring are organized, how decisions are made, how much honesty emanates from the top, etc. — these types of commitments embody particular values.

4. Consistency

To the above point, talk is cheap. It is one thing for leaders to say or do the right things sometimes, but it is another thing to be consistent. For example, when companies are going through a rough patch and cost-cutting or downsizing might be necessary, employees value honesty and transparency. Saying that there will be no layoffs, and then following up with a round of layoffs undercuts the potential for healthy culture.

Employees (see  #1) will accept difficult news if they are consistently receiving honest messages from leadership. When messaging and commitments vary, depending on which way the wind blows, employees rightfully withdraw their commitments and energy.

5. Clarity

Employee experiences often unravel when employees are unclear how their work connects with and contributes to company strategy. We also know that people respond better to stories with meaning than they do to spreadsheets and numbers. Companies where leadership consistently articulates company strategy, and changes in strategy, keep people in the know and rowing in the same direction.

Clear, strategic communication is thus imperative. In companies where employees are not even clear what the company’s core strategy is, you find a cultural deficit. Having some meaning and direction in one’s work is an important aspect of fostering a cultural environment where employees want to contribute.

The Leading Culture Mindset

It could be argued that empathy is one of the most precious, and rare, resources in all of business. Organic company cultures depend on candor and empathy emanating from the top of the organization. While culture itself is a bottom-up, grassroots human phenomenon, leadership is charged with the task of creating an environment where this can naturally happen.

The five Cs outlined here are not meant to be exhaustive. Rather, they are meant to bring to light some of the more elemental aspects of culture that are often obscured by the slick and colorful culture assessment models pedaled by consultants. In our conversations with clients, we say that culture can be found in the everyday experiences of their employees, and what those experiences mean to them. Hopefully these five Cs can help others focus attention on some of the basic things that matter to employees.