312 — The Five Steps to Build An Unbeatable Culture

Are you the CEO or head of a business unit? Have you decided to build a powerful company culture that outperforms competitors? Whether you do it yourself or use the assistance of an outside expert, this paper details the 5-Step Culture Change Process that builds the culture you want in the shortest possible time. Guaranteed. It was developed over 30 years with hundreds of managers, with companies large and small.

Culture Change is Simple But Hard

Be aware that changing a company’s culture, while straightforward, is hard to do. This is partly because cultures are very stable and resist change, partly because leading culture change is quite unfamiliar to most managers, and partly because leaders must make small changes in how they themselves work.

Set the Stage

You’ve probably talked already with your management team about developing a better company culture. If you haven’t, it’s good to get your team thinking about it well in advance of your first Culture Leadership Meeting.

Make sure they understand that you are committed to building a workplace where people bring more energy, creativity, and commitment to their work, and where fewer problems rise to management levels. Point out that it will take working together as a team to make that happen. You might also mention that nobody is an expert at doing this, certainly not you, and you’ll all have to help each other learn along the way. Stumbles are expected, but they won’t keep you all from reaching your goal.

Keep your eye on the goal. Successful culture change brings a successful company. Changing the company’s culture is a serious business decision, so you should discuss with your team the expected financial benefits (see What’s the Cash Value of Developing Your Culture?). Companies with well-developed cultures out-produce other companies by wide margins.

Are any of your company’s competitors beginning to develop better work cultures? If they are not, and you get the jump on them, it’s very possible they may never catch up.

Who is The Culture Leadership Team?

The team to lead the culture change will be the team you meet with regularly (usually weekly?) to manage the company or business unit. It typically is not an expanded leadership team you might have that includes many non-operational staff functions.

Plan an hour and a half for each Culture Leadership Meeting. Do not combine these meetings with your regular operations meeting. You can combine them later — after the Culture Leadership Meeting gets some traction. That usually happens after about six meetings.

Because these culture meetings are only held once every three or four weeks, it takes about 4 to 5 months before discussing culture becomes a normal part of your regular weekly business team meetings. Then you can schedule culture as the first agenda item of your regular business meetings.

Yes, culture is a business item, maybe the most important one. After all, it is the stage for everything that happens, particularly performance and profits.

1. Choose Your Culture Change Goal

Get your team together. Ask these two questions to choose the goal or outcomes you’ll want from a more developed company culture. This discussion should take about an hour.

The First Question

“Think of a task situation you’ve been in — and this doesn’t have to be a work situation — when you felt excited about what you were doing, when you felt energized and enthusiastic about the task, when you could hardly wait to start the day. This has to be an actual real situation from your past. Can you each think of one?

“Now, with that situation clearly in your mind, and with that feeling you had when you were there, take five minutes and write down what you think it was about the situation that made you feel so enthusiastic, so motivated.”

Take your time. After five minutes, after everyone has written several reasons, go around the group, asking each person to say just one item from his or her list. Write down what they say on a whiteboard or flip chart where everyone can see them. Continue going around until are no more items. There will usually be about 10 to 15 items. Expect some repetitions.

This is how one group of managers described their experience.

“What Made You Feel so Motivated?”

    • I was recognized.
    • There was camaraderie, teamwork, people help each other.
    • I got honest feedback.
    • I got support from management.
    • I was trusted — there was give and take on ideas.
    • There was respect from the top down — not fear.
    • There were enough resources.
    • Expectations were in line. We knew the goal and what to do.
    • I felt part of something bigger.
    • I received mentoring and training.
    • There was pride in everyone’s accomplishments.

The Second Question

“Now look at our list and keep it in mind as you each write down what you would like to see more of here in our company.”

Again, give people five minutes to write their thoughts down. Then go around the group, one item per person, and write down what they say on a whiteboard or flip chart so everybody can see.

This is how one group described what qualities they’d like to see more of.

“What We Want More of at XYZ Company”

    • More trust, honesty, and openness.
    • Stronger teamwork and cooperation.
    • Better communications between levels and across interdepartmental divisions.
    • People speaking up and participating more at meetings.
    • People taking more responsibility for solving their own problems.
    • Higher morale.
    • Improved productivity and customer service.
    • Less interference and directives from above.
    • A clearer sense of direction by everyone.

Most people want a similar workplace. Make sure your team understands that there are no right or wrong answers. The culture you want is unique to you and your team — and that’s how it should be.

Congratulations! You’ve Now Set Your Culture Goal, Your Culture Change Objective

This list might change a little as you learn more about changing your culture. But it is more than good enough to begin the next step — actions.

2. Decide What to Do — Actions

If you’ve run out of time at your first meeting, postpone this second step until your next meeting. Either way, explain that the way to get that culture is by making very small changes in what each of you do every day, changes that illustrate or reinforce the kind of culture you all just described. These actions should not be anything new or unusual. They will just be small changes in each person’s daily work, nothing dramatic. Over time, as you make these small, easy changes, the organization will let you know what works and what doesn’t. In response to the leadership’s changes, the culture will begin to respond, slowly at first, but soon pick up speed. People will notice the new wind and start getting on board. The momentum will gather as the new culture starts establishing itself.

Ask each manager to write down one or two everyday activities or future actions or plans they might possibly use as opportunities to move the workplace culture in the direction they just described.

For example, if an item was [we want] “more trust, honesty, and openness.”, say, “Think about what do you do every day, or what is coming up in your department, that by you doing it a little bit differently, you could personally show ‘more trust, honesty, and openness’?”

If one of the items is, “Better communications between departments.” you might ask, “What do we do here, or what is coming up in your area, that by doing it a little bit differently, we or you could improve communications between departments?”

If one of the items is, “Get people to take more responsibility for decisions that affect them.” you might ask, “What do we do here, or what’s coming up, that if we gave it a little twist, we could get the people who are affected, more involved in decisions?”

Ask similar questions for each item from the “Qualities” list and record their answers on an “Opportunities” list. This step is brainstorming. Later each person can choose which item(s) to do. Each possible action or opportunity must be something small that the manager could realistically see him or herself doing without a lot of additional work.

Move Opportunities to Actions

When the “Opportunities” list has at least 15 items, put it next to the “Qualities” list. Ask the group to look at the two lists. This is a good time for your team to walk around, read the lists, think about them and share ideas. After a few minutes ask your team:

“Who’d like to put their initials against an item?” As the team leader, it’s important to put your own initials on one or two of the items, but best if you are not first.

After they put their initials against the items, ask each manager to describe what they plan to do — how they will connect the qualities to actions. Encourage your team to share ideas and suggestion with each other. Sometimes one idea will be appealing to several people. When the managers have decided what to do, describe what you plan to do and invite their comments. Ideally, two, or three, or four people will volunteer to do something. Invite comments or suggestions from others in the group.

Conclude with, “Next time we get together, let’s hear what you did, and what happened. Remember that we are trying to learn about the culture and what happens when we take actions. It doesn’t have to be ‘successful’, but you do have to try something. What we want to hear is what you did, and what happened. After we discuss it we will all decide on our next steps. We’re going to walk down this path together, step at a time, learning as we go. Okay?”

“So What Happened?”

When you all meet again in three or four weeks, ask people to describe what they did and what it was like. You might find that not everybody did what they said. They might have done something different. Possibly nobody, except yourself, did anything. Sometimes everyone will have dived in. Be patient. It might take a while for everyone to see that this is serious business, important to the success of the company and that you are determined to help them make it happen.

After you and the others have described what you did and what happened you can revisit the opportunities list, add new items, and decide what you will each do next. “Let’s look again at the list of opportunities, and see if there any new ones we should add.” Ask people again to volunteer to do something. Have them see that you’re very serious about this. But don’t be confrontational. Just be firm. Of course, you must have done something yourself. If the leader doesn’t advance, no one else will.

Adding Other Issues

After several meetings where members discuss plans and change, the group will be ready to open up other areas for discussion. This happens naturally as you and the members get comfortable thinking about the human side of the company — how you do your daily work and the effect that has on others and on the culture. You’ll begin to see that you can more easily talk about how you work amongst yourselves, and how that might change to better reflect the qualities you want more of in the culture.

A particularly important part of this is interpersonal and interdepartmental relationships — how team members and their departments work together — how they see and experience each other.

In many organizations, particularly older traditional hierarchies, there are strained relationships between departments (that lead to silos) and between levels, where there is often poor trust, openness, and communications. As the leadership team gets comfortable discussing the people side of the business, their own relationships will change. People below will notice this and begin changing their own relationships.

It’s important that this self-reflection within the leadership team develop naturally and without accusation. As the leader, you can help the team see that you are all walking down the strange new path together and that together you can discover solutions. It should never be a question of looking backward trying to analyze what happened and who is at fault. Focus on what cultural values you want and how you can reinforce these through your actions now as a team.

Summary of Steps 1 and 2

    • Recall a situation when you felt energized and enthusiastic about what you were doing.
    • Describe what it was in that situation, what values and qualities it had, that made you feel so energized and productive.
    • Based on that, describe what values and qualities you would like more of with your unit.
    • Create a list of opportunities where you could personally reinforce, through your actions, these values & qualities.
    • Each manager decides what to do to show the values and qualities in their daily actions.

Over three or four meetings, as the Cultural Leadership Team members get comfortable with this new way of doing things, some members will start similar discussions with their own management teams.

3. Involve the Next Management Level

This third step repeats the first and second steps but now with the management teams at the next level down from the Culture Leadership Team.

If you are a member of the Culture Leadership Team and are now meeting with your own management team I suggest you don’t show them the top level’s list of values, goals, and actions. Each level should develop their own. Each of us wants similar things at work. That’s why the lists developed by different levels and groups will be quite similar. Ownership is more important than a lock-step plan. When you are dealing with the human level of culture things don’t need to be as precise as with issues at the operational level. However, after a group has developed their list and decided on actions, you might share the leadership team’s lists. You and they might be surprised and pleased to see how similar the two lists are.

You’ll probably be impressed at how quickly people become involved in this culture development process and how it rapidly builds energy and enthusiasm throughout your organization.

4. The Culture Interview

A New Kind of Workplace Conversation

The fourth step to creating your company culture is simple, yet profound. It is special conversations held between people at all levels and across all functions, conversations to improve relationships. Good relationships are the foundation for better decisions, improved performance, and profits. (see, The Cultural Interview)

D  e  c  i  s  i  o  n  s
C o m m u n i c a t i o n s
R e l a t i o n s h i p s

These special one-on-one conversations — not designed to solve problems but to build relationships — are unfamiliar to most managers. Being unfamiliar they may at first feel uncomfortable. This discomfort fades after five or six conversations. They soon become a rewarding and valuable aspect of the workplace. In these conversations, the manager and one employee step out of their usual work roles and begin to know each other in a much fuller, personal way. Many changes begin with these conversations. Trust improves, communication flows more easily and people are more open to giving and receiving honest feedback. When a person feels acknowledged and understood, they naturally feel more empowered and become more engaged. They are then more inclined to tackle and solve problems previously left to management.

As managers meet with each of their staff, and across divisions, these changes in relationships and attitudes begin to ripple throughout the company.

Cultural Themes

Once each manager has conversations with at least 6 of their staff, then all the managers on the team can meet to share themes that have emerged without fear of breaching any confidentialities. The themes provide the management team with powerful information about the company’s culture, including ways to further employee empowerment, and where leaders should focus their attention. These conversations, though confidential and focused on relationships, quickly become one of management’s most powerful sources of information for building a successful company.

5. Establish Employee Problem-Solving Teams.

An employee problem-solving team is 5 -7 volunteers from the same work area, led by their supervisor, that meets once a week for an hour to analyze and solve pressing problems in their work area. Any business unit should begin with only two, or at most three teams, until managers and supervisors understand how to manage them.


Members of problem-solving teams are first trained in basic data collection and problem analysis methods (in a production setting this might include; sampling, Pareto analysis, and basic statistics). Then they select a problem and begin collecting data to help them understand the problem’s root causes. The supervisor communicates team progress to management so there are no surprises. The team must involve everybody who is affected by the problem and its emerging solution. Once the team learns to analyze and solve local problems, they usually reach out and tackle broader system-wide issues that affect their department.

Management is invariably impressed with the depth and sophistication of the analysis, and the speed and sustainability of the changes. The participatory decision process brings a company-wide increase in trust and cooperation along with striking gains in productivity and cost savings.

Most Problems Are Related

Tackling significant issues usually draws in and solves related problems, bringing many benefits, e.g., one cleaning crew tackled their biggest frustration, product waste surrounding a production line. The eventual elimination of waste and improved cleaning practices garnered the plant a rating from the National Sanitation Foundation as, “The cleanest food processing plant in the United States.” But, along with sparkling floors came production line process improvements and reductions in product loss saving millions of dollars annually. Few problems exist in isolation. Solving one problem invariably solves others.

A Great Work Culture

When you have worked through these five steps you will have a highly productive, great-place-to-work — great for you, for your people, your customers, and your stockholders.

Warning — “Problem People”

Some people will initially resist the culture development effort. If they have suffered through corporate initiatives that come and go, they’ll wait to see if top management is serious before committing. In the beginning, assume that people who resist are simply responding to the old culture. Most will get on board as the culture moves in a good direction. However, culture change requires openness. About one in 20 people simply can’t be open. Be patient. With time, most of these people will voluntarily leave. There is usually no need to confront them.

cc 312 — © Barry Phegan, Ph.D