Are culture and performance linked?
There is no shortage of musings on the importance of company culture. Or the confounding nature of it. Open any recent Fast Company, or saunter into any airport bookstore and you’re bound to find endless titles extolling the importance of organizational culture. This is not a new topic, but it is one that is increasingly at the center of boardroom discussions.
In a January 2018 Harvard Business Review cover story (The Leader’s Guide to Corporate Culture), Spencer Stuart, a leading global executive search and leadership consulting firm, shared insights from their decades of experience analyzing organizations and executive teams. What they found was a direct link between culture and performance, with five key takeaways for CEOs, Boards, and management teams:
- Culture should be viewed as a foundational business system and managed as such.
- Managing culture requires a definition and a model.
- Start from the outside-in when setting a target culture.
- Culture and leadership are inextricably linked, find leaders to support the culture you want.
- Boards overlook an important area of risk and performance oversight if they aren’t asking about culture.
At West, we have the privilege of sitting side-by-side with founders and CEOs, and as Board Members to our portfolio companies. We have a front-row seat to the make-it or break-it nature of company culture. Whether we’re making an investment, designing a new visual identity, or building a go-to-market strategy, much of our underlying work is helping leaders manage and shape their team and culture.
The reality is culture happens whether you shape it, or not. The most successful organizations are the ones that consider culture a competitive advantage and manage it with the same commitment as they do their product, brand, and growth strategies. As Spencer Stuart rightly points out, “a company’s culture can make or break even the most insightful strategy or the most experienced executives.”
Shaping and managing company culture can take many forms. At a foundational level, it’s a set of shared assumptions that drive the way organizations think and behave. These shared assumptions direct how we work, what we work on, who we work with, and the way in which we communicate and collaborate with the world around us.
Most often, culture manifest in the small nuances of our day-to-day happenings. But increasingly, we’re seeing the benefit of a strategic and long-term commitment to creating space for deep discussion and reflection. That’s not easy to do in the fast-paced world of startups. But it’s imperative.
At West, we curate events that bring communities together to tackle some of today’s toughest questions. We take research trips to explore emergent technologies and new ways of working. We host lunch and learns with experts in a space we’re looking to get smart on. We take deep dives into the worlds of art, fashion and music where we get to stretch our thinking. Just recently we spent a day of service getting our hands dirty and giving back.
Regardless of the medium, we believe culture is a foundational business strategy that can improve performance. What will you say next time your board asks…
What are we doing to link our culture with our performance?