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31 May

Culture: In Practice or just In Principle?

Culture is often eloquently articulated in mission statements, company handbooks, and during new employee onboarding. The stated commandments behoove the principles of collaboration, innovation, and integrity.

Yet, when the rubber meets the road, theory and practice often diverge, leading to a huge gap between what is said and what is done. Culture professed in glossy brochures and recruitment pitches often remains a mere mirage, while the practiced culture morphs into a different beast entirely.

Why does this happen? Why is it so hard to practice what we preach?

To understand this, you will need to first understand that even when stated cultures of two organizations are the same word-for-word, the way these cultures are practiced can be entirely different.

Let's say ‘Innovation’ is preached as a cultural value in two companies — a physical goods manufacturing company and a software technology company that makes consumer apps.

In the manufacturing company, innovation might be encouraged by a top-down approach. The focus is primarily on innovation through optimization. And their culture is one that emphasizes efficiency and systematic progress. By setting clear goals and parameters, managers guide their employees towards specific innovation targets.

And this makes sense because in a manufacturing environment, the production process is usually highly standardized, with specific procedures and systems in place to ensure consistent output. This often includes a heavy emphasis on optimization and continuous improvement, with a focus on reducing waste and increasing productivity, efficiency, and overall throughput. Process predictability and consistency are key. Variability is treated as an enemy.

This means that the organization's success tends to rely more on its processes and systems as a whole than the genius of individual employees. And the effectiveness of individual employees is often judged by their ability to adhere to these systems and achieve the established targets.

Consequently, even their hiring selects for people who are conscientious, follow rules, and operate with a certain level of rigour and meticulousness.

On the other hand, the software company might foster innovation through a more organic, bottom-up approach. By hiring creative, self-motivated individuals and allowing them the freedom to explore and experiment, the culture encourages a broader range of ideas and solutions.

This approach embraces higher process variability and accepts that not all ideas or projects will succeed. The managers constantly emphasize on learning and growth, and do not penalize failures from creative leaps of faith. Google's former policy of allowing employees to spend 20% of their time on projects of their own choosing is a famous example.

In this case, the organization's success depends significantly more on the talents, creativity, and initiative of its individual employees than its systems and processes. This also reflects in the way it hires people.

The point is, even when what is preached is practiced, identically stated cultures might look very different in practice. In the above example, both companies may achieve the same overarching value (innovation), but their cultures will differ massively based on how they implement those values.

So, there is already a lot of hidden contextual nuance that creates massive differences between how the same stated culture is practiced in different organizations.

But as long as it is practiced, everything is good. The problem arises when it isn't practiced.

The statement “culture is what happens in practice” is particularly relevant in the case of young startups.

Startups are often defined by their rapid growth, both in terms of scaling the product and in terms of hiring; the latter can put a strain on the culture if it isn't consciously maintained.

As a startup founder, I may vehemently declare certain principles as part of my culture, but what would truly matter is if I knew how these principles are practiced and embodied by my team on a day-to-day basis.

A trivial (and rather overdone) example:

My startup might have ‘transparency’ or ‘radical candour’ as a declared cultural value. In principle, this could mean open communication, delivering critical feedback without fear of repercussions or hurting sentiments, and just plain commitment to voicing out what one truly feels.

However, if in practice, important decisions are made behind closed doors, or if the culture is performative and employees feel they cannot voice their honest opinions or concerns, then the culture isn't truly being implemented, is it?

Netflix's culture is characterized by its ‘freedom and responsibility’ principle. This isn't just a stated value – it's practiced through policies like unlimited vacation time and an expense policy that simply states, ‘Act in Netflix's best interests.’

Likewise, Atlassian has a culture of ‘Open company, no bullshit’ on its company values page. But this isn't simply stated in principle; the culture value is embodied in their practices, like internal blogging where any employee can write about anything, and all employees are encouraged to read and comment.

So, if you wish to practice what you preach, here is a non-negotiable foundational principle I've formulated over years of experience building and breaking companies.

Culture starts at the top but it's lived at all levels.

Founders and leaders play a key role in setting the tone for the culture, but if there's a disconnect between what the leaders say and what they do, it can undermine the culture.

Now, there are several reasons why, as a founder, you might struggle to put your stated principles or values into practice.

Sometimes, the values and principles that you espouse are too vague, making it difficult for your employees to understand what they mean in a practical sense. This can make it hard for those values to be effectively implemented in day-to-day operations. This is where the middle layer of the hierarchy helps.

Also, encouraging employees to ask questions like,

“I know our company values ‘innovation’, but what does that mean in practical terms?”

goes a long way.

Then there's the issue of a lack of embodiment. If you don't consistently model the company's values in your actions, it creates a disconnect between what you say you value and what you actually reward. This can undermine the credibility of those stated values and make it harder for employees to take them seriously.

Like I always say,

“Principles and values are only real when you're willing to pay a price for them.”

For a real-world example, look at this incident:

A lack of coherence kills trust, kills reputation, kills companies. But few realize this, let alone internalize this foundational principle.

It's easy to set strategies and goals for your team, but it's hard to then follow them up with actions that are coherent and aligned with those objectives in thought, speech, and action.

You may state an objective but your company might have systems in place that inhibit the pursuit of that objective. Or worse, incentive structures on the ground level may directly contradict your stated objective, leading to a culture of inconsistency.

Every strategy or directive worth its salt will come with its own costs and trade-offs. When you refuse to pay them, people lose trust in you. Implementing new values requires changes in behavior, which will likely be met with resistance if you don't manage them effectively. Imagine an employee gossiping around the proverbial water cooler, complaining to another:

“The company says it values ‘learning and development’, but we're so overloaded with our daily tasks that there's hardly any time left to attend training sessions or workshops.”

Even in the screenshot above, it's not about the 60 pounds. I'm pretty sure this SWE is earning enough that they could have spent them out of their own pocket. Not the point.

If, as a manager, you set an ambitious goal for someone in your team, it is now your responsibility to align other things in the company to help your teammate achieve that goal.

For example, if I have assigned something urgent and important to a teammate, it is my responsibility to shield them from other teams and from other work that might stop them from committing to the task.

I'm not only responsible for creating alignment with my team around objectives, I'm also responsible for aligning the larger org with my team, so that they are allowed all the freedom they need to achieve those objectives. In the absence of this effort, strategies and directives feel incoherent and I lose trust as a manager.

Or if I claim to value work-life balance but only reward employees who consistently work overtime, this sends mixed messages to my team.

“The company says it values work-life balance, but Priyanka got a promotion because she's always staying late and working weekends.”

“Yeah, it's giving mixed signals. Very inconsistent and unfair. They say one thing, but actually reward another.”

Sometimes, practicing stated cultural values is also hard for companies that focus too much on short-term results. They don't really invest in practices that align with their stated values, especially if those practices require a longer-term investment to bear fruit.

“Management says they're committed to maintaining a high bar for quality, but all their decisions are based on meeting sales targets for the next quarter and shipping stuff even if it leads to a broken experience for users. It's hard to believe they'll support initiatives that won't show results right away.”

These scenarios are a few generic examples that might serve to establish the point.

But practice goes deep. Culture is embedded in every interaction and decision the company takes. To be valuable and coherent, it needs to be embodied by every employee.

It is frankly hard for me to overstate the importance of coherence between stated and practiced culture.

Coherence breeds trust, and trust is the bedrock of any successful company.

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