The Hidden Cost of Culture Friction
I was on a call last week with Paula, our new SVP of Business Development, and we were talking to a possible client in Texas. During the conversation, the senior executive on the call asked us a fair and important question:
Why should we invest in culture work? How can I convince the other senior executives that we shouldn’t just add more sales people or invest in some other part of the business?
Part of our answer is about talent and competitiveness, and it’s pretty straightforward: top talent won’t tolerate a bad culture. They may stay for a while, hoping for a turnaround, but eventually your best people will end up working for one of your competitors. It’s inevitable, and it helps your competitors beat you. This is particularly true for your new hires. If you promise them a decent culture, but they experience something different—they’re gone. Paula saw this happen in real life. An organization did just what our prospect asked about: they invested in sales, hiring 20 sales people, but after a year, only 5 of them remained. She estimated that was about $500,000 down the drain.
But in addition to the talent issue, there is a huge issue that culture work addresses inside organizations that most people don’t see:
When your culture is misaligned with what makes you successful, it creates friction. You’re giving 100% of your effort, but the misalignment creates a drag, so you end up falling short of your potential. It’s like you’re walking forward on a moving sidewalk that’s going in the other direction. The sidewalk is pretty slow, so you still make plenty of forward progress—it’s just not as much as you could if your culture were better aligned. But because we’re moving forward, we tend not to notice it. It feels “normal.”
And that’s a huge part of the problem—this friction can be costing you as much as losing all those salespeople in the first year, yet it’s not visible like that, so it remains under the radar.
The good news is, our culture assessment can shine a light on these issues. Like maybe your culture supports people making small changes (hacking individual processes), but won’t support the effort or risk involved with running experiments or developing prototypes. We see this pattern in the culture data all the time. Organizations like that often feel like they are committed to innovation, yet because of this underlying pattern (stovepipes of small innovation efforts), they usually fall short.
Or maybe you feel like you are good at transparency because in your culture, people are happy to share information with anyone in the organization who needs it. But that’s just “reactive” transparency (sharing when people ask you). Are you being proactive? Are you creating mechanisms to let more information flow to more people so they have what they need BEFORE they have to ask? Think about the opportunities that are lost simply by waiting to have people ask for things, rather than enabling them to take action right away based on information they already have.
That’s friction, and that costs you a pretty penny without you even realizing it.
Organizations that design their culture to be more tightly aligned with what makes them successful tend to run circles around their competitors. Eliminating the friction unlocks new performance.