Almost every CEO these days asks a similar question: “How can we change faster?” In the face of unprecedented pace of change, CEOs are clearly feeling the pressure as they see execution struggling to keep up with their strategies. A study conducted by innovation consulting firm Innosight shows that the once 61-year tenure for the average S&P 500 firm in 1958, is now sitting at under 15 years. At this rate, 75% of the S&P 500 will be replaced by 2027, so time is just about the only thing that’s no longer in abundance nowadays.
As management thinker Roger Martin reminded us recently in his Harvard Business Review article, despite all the innovation and business model changes we’ve seen, there are still only two ways by which businesses compete. It is either through cost leadership, or differentiated products.
In an age of abundance and hyper-competition, companies are typically forced to choose the lesser of two evils; however, given enough time and money, your competitors can duplicate almost everything you’ve got working for you. They can hire away some of your best people. They can reverse engineer your processes and clone your business model. The only thing that’s really hard to duplicate is your culture.
Take IKEA as an example, who in the late-80’s entered the $15B (in 1985) U.S market after having incredible success and growth in Europe and Canada. Copycats emerged very quickly, including a California-based retailer called Stör, which emulated IKEA right down to the ball-filled children’s play areas. Stör may have replicated IKEA’s strategy, but that wasn’t a match for the strong culture that still follows the values that founder Ingvar Kamprad has instilled in the company since he founded it in 1943. As a result, this attempt, and many others in the past few decades have failed to replicate IKEA’s highly profitable business model.
We hear a lot about corporate culture. We praise organizations such as Zappos, Netflix and Google for having strong corporate cultures, and we lament those that don’t. In reality, the idea of a “good” or “bad” culture is a misconception. Corporate cultures cannot be inherently good or bad, though they may certainly be effective or ineffective in helping drive the performance and change you’re looking for. In organizations, changing culture faces strong headwinds from employees and leaders who are clinging onto “what’s always been done”. It is a natural reaction for organizational cultures and the people within them. Unfortunately, it is also resists innovation and change. As a result, earnings and other key performance metrics start lagging.
Dipping metrics can make managers do some interesting things in an effort to restore their companies to greatness. As executives become laser-focused on chasing earnings, they may lose sight of the bigger picture. They become focused on treating the surface-level symptoms through tools such as re-organizations. Where they fail is diagnosing the deeper cultural dilemma.
Even the very thought of changing culture can be overwhelming to any leader. How does one change the hearts and minds of thousands of unique individuals? How do you get everyone aligned around a new idea or strategy? The truth is, changing a culture is the hardest task that leaders ever have to face. It isn’t just about rolling out programs or shuffling the boxes on the org chart, it truly is a massive undertaking that requires tremendous effort and lots of patience, that often time outlasts leaders.
Why is culture change so difficult? Former culture architect at Zappos, Robert Richman, summarized three great reasons in a recent blog:
1 – Change is emotional
Basic behavioral psychology shows us that unless a change is universally positive, it will produce an emotional response. It will provoke denial, anger, resistance, and avoidance before it finally turns to acceptance.
Asking people to let go of the past way is asking them to move on. And when people are attached, moving on doesn’t happen without grieving.
And where does an 8-point strategic plan include the space to process the emotions of grief? It makes no sense, unless one is so focused on the future that they want to forget the past. That may seem like a good intention, but letting pain remain unprocessed is the equivalent of telling someone in a hospital bed to just get up. Resentment remains, and that can derail cooperation.
2 – Change is non-linear
Change doesn’t happen sequentially. Change is messy. Change can look like moving backward or sideways, or in zig zags before moving forward. Change can bring up a lot of painful conversations.
3 – Change cannot be forced
One of the most insidious beliefs in corporate management is that we can make people do things. If that were true, there would be no need for a change process in the first place.
People can drag their feet in all kinds of ways, from being unproductive to outright sabotage. And most of it will happen below the radar.
But what if changing culture really wasn’t that monstrous of an undertaking? What if there was a way to stimulate the culture by executing on smaller, high-impact initiatives?
Enter Culture Hacking. The word “hacking” typically refers to someone who seeks and exploits weaknesses in a computer system to gain access using unorthodox ways. In recent years, this word has transcended into the start up world in the context of experimenting, prototyping and achieving growth with little resources. All are about seeking new ways to bend the rules and to stretch shoe-string budgets into high-impact results. While they are mostly born out of necessity, hacks are usually packed with creative thinking and intimate knowledge of what motivates us humans. They are often the breeding grounds for next-practices, because replicating what other organizations do will typically not suffice in this environment.
Although ultimately, an organization’s culture is comprised an interlocking set of goals, roles, processes, values, communications practices, attitudes and assumptions, Culture Hacking is all about finding the little things you can do everyday to create iterative change.
In a true hacker’s mindset, Culture Hackers look for the vulnerable points within the system, where if a small change is made, it can have a huge impact on culture. The focus on small things, more frequently, as opposed to taking on big topics, creates momentum. Boiling it down, a culture hack is simply an intentional action taken to affect positive cultural change within your organization. It isn’t about looking for a best practice; it is about people getting together to crowdsource a new reality and by Thinking Differently.
While it is completely counter-active to how most organizational change is executed and a polar opposite to how we’ve been taught to manage change in business school, culture hacking is fueling the success some of many of today’s fastest growing companies. The impact ranges from increased productivity, to achieving incredibly high engagement rates, to being able to attract and retain some of the world’s most talented people.
While there are thousands of examples, here are some select highlights of culture hacks that are being leveraged by high-growth companies:
Boost Executive Trust and Authenticity
Executive trust scores and authentic leadership are a big topic in many organizations. Companies with a high level of trust and confidence in their executives typically see higher levels of engagement, retention, and productivity.
At Evernote, the maker of popular note-taking software, one of their culture hacks is to put their senior managers in-charge of their office’s coffee shop (which they call “The Dialogue Box”). Senior managers assume 1-hour shifts throughout the week, which encourages team members to drop by for a chat. Evernote’s CEO, Phil Libin is not exempt from his shift either. Watch his short video where he describes how he benefits from his weekly shift.
What better way to win trust than over a nice meal? Boston-based company Robin, which creates a software layer for office buildings, takes it a big step further. The founders of the company hold quarterly picnics where THEY serve the employees and their families. Yes, flipping burgers, serving salads, fetching beers, etc. It is their way of showing humility and gratitude to the team.
On-board New Employees
At Commerce Sciences, every new employee receives a “starter kit”. The last person to join the company crafts those kits. Each “kit” is totally different and personalized (depending on how creative the last person is, ranging from funny jokes, interesting books to Nerf Guns and coffee capsules). It isn’t so much about the kit itself, it is more of a great gesture and a way for the new employee to build relationships and learn the ropes from someone who has recently gone through a similar experience and understands what new hires need.
We know full well that silos are a major barrier to agility and execution. While every organization is preaching for collaboration, with the reality of how we are organized and how each part of the business is measured, what we get at best is polite cooperation.
Collaboration doesn’t happen naturally when you toss a random group of people into a room. It requires building relationships and trust, along with understanding the capabilities, strengths and weaknesses of each team members. To build better relationships in their growing company, Boston-based marketing technology leader Hubspot uses a Facewall that runs on monitors across the office to feature pictures and profiles of employees. It helps employees get to know their colleagues better and establish new relationships.
Hubspot is even kind enough to enable anyone to run their own Facewall. They openly shared the open source code so you can immediately use it in your company as well!
In addition to the Facewall, the company also does random desk shuffles every quarter for the product team, encouraging each of them to get to know new people and grow their network.
At dashboard software company, Chartio, employees bond during Weekend Trips.
They recently took their first team trip to Tahoe. They have a lot of new hires so it was a wonderful way to get to know each other and grow those relationships.
Increase Customer Centricity
Every organization strives to be customer centric, but in reality, the bigger a company gets, the more removed it becomes from its customers. Yoga apparel powerhouse Lululemon doesn’t use focus groups or website visits to understand their customers. Instead, their executives spend hours each week in Lulu stores observing how customers shop, listening to their complaints, and then using the feedback to tweak product and stores.
Learning and Developing Talent
According to HR consultants Bersin by Deloitte, Companies spend a mind-blowing $130 Billion annually worldwide on employee training. Despite all this spend, companies struggle to find ways to foster a learning culture – that is, the ability to learn new things and unlearn old practices in a world that operates in a perpetual beta.
Facebook’s hack to learning is called Hack Month. After working on a particular team for a while (typically 1 year), Facebook tells you to pick any other team at the company and for 1 month, you’d have a project on that team. If at the end of the month you liked the team and the type of work, then you can stay on that team. If you didn’t then you can go back to your old team or maybe even pick a new team to try out. This allows engineers to gain and share knowledge and experience with all of the different parts of Facebook.
Twilio is an API company that depends heavily on its employee’s knowledge of their products so they can effectively explain their product’s value to their customers. One of their hacks is the requirement that every employee must build and demo an app built with the Twilio API in order to receive their logo track jacket and Kindle (which is a free company benefit). This goes for all departments: engineering, sales, finance, marketing.
Each Wednesday, at the company dinner, new hires get the chance to demo their apps in front of the entire company. The CEO “knights” them by putting the jacket on them while the entire company cheers as they show off what they’ve built, no matter how simple or complex.
Instill Purpose & Community
Still have that Dust Buster that you got for your 5-years of employment anniversary? VMWare takes employee anniversaries beyond the Dust Buster or fountain pen as a gift.
VMware’s Giving Program recognizes employees who have been with the company for 4, 6, 8, and 12 years. At each of these milestones each of those employees gets a certain amount of money that they can give to any charity of their choice. At the 12 year mark, they’re given $12,000 for this purpose.
If you’re read these hacks and are thinking that they’re nice, but there’s no way they would work at your company, or fit within your culture, I dare to challenge your thinking. Obviously, context and knowing your constraints are critical. If you cannot, in a million years, picture your CEO working at the coffee shop or “knighting” a new employee, that’s absolutely fine (although it was quite the spectacle to see even the most conservative CEOs and politicians taking on the ice bucket challenge just short while ago).
As a culture hacker, what you need to do is to use observation and empathy to sense “cracks” within the cultural system. Cracks are opportunities. You spot them by noticing that something feels uncomfortable or has strong tension. A crack is something that makes you question, “Why do we do it this way?” or perhaps it is a conflicting idea or assumption, which would be revealed by or could serve as leverage for the hack.
When a crack is found, a culture hacker doesn’t look for a best practice (although they openly seek examples). A hacker looks for an opening in the system that can be experimented with and often crowdsources potential solutions from others.
Culture hacking isn’t about having the answers. It is very much about experimentation and iteration. It is not a short cut, but can offer an accelerated way to kick start change.
So can we hack culture to make a real difference?
Humans are social beings. This is how ideas and beliefs spread. This is the non-linear, non-traditional way to start small movements where people learn from other people: how to behave, what to value, and what to aspire to. It creates the momentum and the environment for culture change.
This is why we need to find hacks that work to make a small but meaningful difference, one hack at a time.