HBR: Leaders Can Shape Company Culture Through Their Behaviors

Original Article: https://hbr.org/2016/10/leaders-can-shape-company-culture-through-their-behaviors

Jim Whitehurst, CEO of Red Hat

One business buzzword we hear almost everyday is “culture,” as in, our organization has a “strong” or “innovative” or even a “toxic” culture. But what do we really mean when we say this?

For me, an organizational culture is defined by how people inside the organization interact with each other. Culture is learned behavior — it’s not a by-product of operations. It’s not an overlay. We create our organizational culture by the actions we take; not the other way around.

For example, I sit on the board of United Airlines. At the start of every board meeting, the first topic of discussion is about where the fire exits are, how to access the stairs, and where we will meet up afterward. Why would we bother starting every meeting that way? Because United’s culture is built on safety. And the best way to cultivate and reinforce that culture is to lead with behaviors and take actions that promote the importance of safety.

Another element of United’s culture is timeliness. I am a punctual person by nature, but I recall dialing in to one board meeting a few seconds late. The other participants started a few minutes before I joined. They saw a chance to start early, so they did.

I share these stories as a way to show that how we behave as leaders drives the kind of culture we end up with. But this is also why changing an existing culture can be so difficult.

This is a topic fellow executives ask me about a lot. It’s not easy to change a culture, because it involves changing how we behave. If you’re running a company that has been doing something a certain way for a long time, it can be hard to get everyone on board with doing it differently. And that includes your organizational leaders.

Picture the following scenario. A group of executives decides that their organizational culture needs to become more “customer focused.” But when you look at the agenda of their meetings, there’s no time devoted to discussing how they can improve their customers’ experience. And how much time do those executives actually spend out in the field, visiting customers, let alone fielding calls from them? If these executives prioritize something other than customers in their behavior, don’t you think the rest of the organization will follow suit?

It’s easy to think that building a culture is about other people’s behaviors, not how you act as a leader. But I believe that culture change begins when leaders start to model the behavior they want the organization to emulate.

Case in point: A lot of executives come to me for advice about how they can build a more innovative culture, like the one we have at Red Hat. Well, it’s not as simple as telling everyone to “go out there and innovate!”

Our innovative culture is a product of the behaviors that we embrace throughout our organization. One of those elements is a willingness to have open and frank discussions about what separates great ideas from bad ones. If you want to be innovative, you also need to accept failure. If our associates aren’t pushing boundaries and sometimes failing along the way, we probably aren’t pushing hard enough. But by accepting and even celebrating a failed effort, we promote innovation. We will reward someone who tries to climb the tallest mountain, even if they fall short of the summit, because they have created an experience we can learn from and build upon. That’s what innovation is all about.

Consider an example from Amazon, one of the world’s most valuable companies. Jeff Bezos, Amazon’s founder and CEO, has said that if his people have a one-in-10 chance of making a 100x return on an investment, he wants them to make that bet every time. But that means that to reap the reward Amazon needs to be willing to tolerate someone failing nine out of 10 times.

That can be a hard concept for traditionally run companies to wrap their heads around. They are used to measuring objective outcomes and results. They might think that failing is not something to celebrate; it’s to be punished. So, why would anyone be surprised when innovation stalls as a result? After all, who would be willing to stick their neck out to try something new if there wasn’t any upside to doing so?

The point is that building an innovative culture starts by looking at how you behave as a leader toward those trying to innovate. The same is true about any kind of culture: It all begins with the behavior of your leaders. To say that another way, if you are interested in changing the culture of your organization, your first step should be to look in the mirror and make sure you are setting the kind of behavioral example you want everyone else to follow.