While the conversation about culture is now at its apex in the business world; there are still many who are uncertain of exactly what impact culture has on the organization’s ability to break through the performance ceiling. In our years of working with organizations at various stages of maturity, we have come across many who land in the “too much” or “too little” camp, and only a few who are progressively operating in the “just right” space. In this article, we will expose the challenges experienced by leaders of organizations who focus solely on culture as a competitive advantage, as well as those challenges faced by leaders who concentrate their organizations only on strategy execution. We will then take you on a journey with a company who has successfully integrated Culture and Strategy and broken through the performance ceiling.
Neuroscience is almost as popular as any other topic in leadership today; for this purpose, we will map out how leadership, strategy and culture are impacted by the intentional use of each of the two hemispheres. Beginning with the left side of the brain, which is the part of our pre-frontal cortex, (Executive Brain). The left hemisphere is where our structured thinking and ability to focus comes from. This includes sequencing, sorting, categorizing, analyzing, tallying results, positivity and resilience (recovering from emotion), clarity, ability to hone in on parts of the whole, direction, and logic. This part of the brain is responsible for the production of written and spoken language. A left hemisphere dominant leader operating under stress and pressure, who is also experiencing frustration or fear, often unintentionally denies evidence from his or her own senses.
This happens because everything new comes in through the right hemisphere, with the left hemisphere acting as an interpreter, not a direct experiencer. The left hemisphere is known for its capacity to reject that which does not make sense to its existing worldview. Due to the left hemisphere being concerned with utility, it often processes people as things to be used as the left hemisphere sees fit. Another constraint to our left hemisphere, when it comes to leading people, is the left needs to categorize failure and prevent it from happening again, so blame and finger pointing come from this part of our thinking. Often leaders whose thinking is dominated by the left, focus on competition and consider it a positive thing, however, competition turned inside the organization greatly diminishes collaboration and cooperation and inhibits innovation and teamwork. A left hemisphere under stress turns a leader into a rigid conformist who views people as cogs in the wheel of the business. In my three decades of leading organizational change and talent optimization, I have never met a leader who consciously chooses this. It is most often a habitual response to stress; the good news is integration allows for so much more.
The other side of the pre-frontal cortex is the right hemisphere. This is the place in our brain where our thinking gives us the capacity to see, experience and process a holistic view, to perceive and understand context and the broader meaning of life, of work and of culture. Everything comes into our awareness through the right hemisphere. The signals from our body tend to flow through the right hemisphere. Given the right side of the pre-frontal cortex enables us to process pictures and imagery, it is often easier to use metaphors and pictures to relate to and get a point across to people, as well as understand how one feels. It allows us to read emotions by looking into another’s eyes, “in to me see,” which makes it possible to access the empathy required to generate and nurture relationships.
The right hemisphere gives us access and prowess to see and feel all of it, so we can see the people, the work and the big picture. Lastly, part of the whole is also understanding that everyone and everything may have a valuable role to play, which leads to a right hemisphere focus on cooperation instead of competition. When a right hemisphere dominant leader is experiencing fear or hopelessness, they often go to a place of overwhelm. This happens because the right hemisphere processes the whole, all of it, and under pressure and stress this turns into chaos. Given the right hemisphere sees the forest, when operating in an ineffective state of mind, it is difficult to discern whether a stressful external stimuli is an actual or perceived threat. That lack of discernment makes it very challenging to exercise resiliency.
Utilizing and integrating the whole is what our Executive Brain function affords today’s leaders. Every leader of the 21st century has a mass amount of research available to them that scientifically proves the need for both hemisphere integration and the payoffs of training both hemispheres of the brain to fire in sync. The two most prominent competencies integration allows for is full access to both our logic (common sense) and intuition (ability to feel the space and understand the unsaid, listening to our innate wisdom).
Freedom, Inc. A technology company run by a female CEO, Erin, who is out to change the world. The CEO of this organization deeply wishes everyone in her organization to be happy all the time, to get along, and while she does not say it aloud, to like her. She has a big inspiring purpose, and eagerly shouts it from the mountain tops. She is an enrollment machine, people sign up to donate money to her causes, to volunteer for her and to take part in her vision. She is continuously taking on new and different projects, and making a lot of promises along the way. She deeply desires to please her partners, to make a difference, and help everyone that she can in the time that she has the ability to do so. She is often seen shaking hands with people, giving public presentations, and out in the community driving enthusiasm for her cause. She is on cloud 9 metaphorically and physically. She is not grounded in reality of budgetary constraints nor in her people’s capacities to take on more. While she wants to deliver and is eager to serve, she is out of touch and often resistant to the structures required to effectively deliver on promises. When her people share their concerns, she thanks them, gives her two or three cents on each of their ideas and concerns, and thanks them for caring enough to speak up. What Erin does not see is that her people walk away feeling undervalued and incompetent in their ability to be a part of the solution. The result: a lot of activity and little results. Burnt out people, a loss of innovation and creativity, bloated headcount, complacency, back channeling and undermining. While it is hard to get fired from Freedom, Inc., it is also hard for employees to take full ownership, and exercise leadership and accountability because everywhere they go, there is Erin.
RigidOps LLC, a US manufacturer, has been in business for over 10 years. Privately held, the two owners run the company. Brad, the founder, is an industry veteran and serial entrepreneur who has built and sold two businesses before this one. He is a visionary with the ability to create strong relationships and a following of loyal employees. Helen is a young and eager hard charging salesperson. Both have known each other for many years, as they worked together in one of Brad’s previous ventures before starting RigidOps.
The company has seen steep growth in the past years, and even made it through the 2008 financial recession relatively unscathed, when they were nimble enough to adopt a new, disruptive technology in their sector. A few years ago, Brad decided it was time to think about retirement and prepare for his exit, so he put Helen in charge as CEO. She is determined to put her own stamp on the company, modernize the company image, and use software and technology to lead the company into the 21st century. With little leadership experience, Helen’s comfort zone is sales and marketing, and even as the CEO, that remains her focus. Meanwhile, Brad continues to act as the CFO and takes care of product development and operations, but let’s Helen steer the ship.
Helen wants to grow this company at all costs. Decisions are being made top down and are disseminated on a need-to-know basis, often against Brad’s or employees’ judgment and suggestions. She’s a hard task-oriented worker, and everyone is expected to just “do their jobs.” The “vision” of the company is simple: Grow Revenue. And for the past 10 years they did.
Helen rules with an iron fist, pushing everyone to fulfill orders, with little empathy towards anyone, especially if they are not in sales. In the last year, the company has seen an increasing employee attrition rate, and concerns from employees over the ever-growing workload are being shut down, arguing they are just being lazy and inefficient, and all they have to do is to work faster.
Employees are left to their own devices when it comes to how to behave, internally and towards customers. Issues typically result in non-productive arguments, finger pointing and blame. When orders are delayed, the sales team blames customer service, customer service throws manufacturing under the bus and so it continues. Instead of focusing on solutions and results, everyone is focused on saving their own skin. More than one customer has already complained about the lack of customer service.
The low point is reached, when a customer service clerk is fired on the spot in front of his peers. The fear-based management style along with the expectation for employees to just work harder when demand picks up unexpectedly, has led to high turnover rates, particularly in customer service. This has led to missed delivery times, poor customer satisfaction, and stalled growth in an otherwise growing market. Besides a difficult year, there’s plenty of private equity money in the market, and being in a highly attractive niche, a PE firm makes an offer, which allows Brad to remove himself from the day-to-day business, while Helen continues to act as the CEO.
And things turn for the worse.
A new COO and CFO are being hired to support Helen, but besides efforts from both the COO and CFO to work closer together as a team, Helen doesn’t show any interests in regular meetings, sharing information, or any other attempts in creating a leadership team, further deepening the rift between the already siloed departments.
With PE at the helm, the focus is on numbers. Productivity and EBITDA. An array of operation KPIs are being analyzed weekly and monthly to show every decline or increase in efficiency, increasing the pressure on Helen, and sending her further down the spiral of an increasing command and control management style.
While investments are being made in new facilities and equipment, little attention is given to the lack of communication and cooperation at the leadership level, leaving the company utterly unprepared for tightening, unstable market conditions, caused by tariffs and increasing competition. After a year of declining sales, Helen was removed from her position by the board of investors, and it took over 2 years for the PE company to regain their investment.
Synchroni LLC, a software company, has seen rapid growth since inception 5 years ago. The company grew to over $25mm in revenue, and the team grew from the 3 founders to over 42 people. While focused on scaling, growing revenue and becoming profitable, the 3 founders never lost sight of their “why” they were in business, their vision. They created their core values: “Transformational Change,” “Service First” and “Do what you say,” the heart of their culture early in their journey, and used them intentionally to build out their team.
Aware of the fact that an organization’s success is largely determined by its employees’ ability to work together efficiently to achieve goals, they carefully connected their business strategy with their people strategy. Using their core values, as well as people data to build their growing team, they also ensured to equip their managers with the tools they need to be more self-aware and understand how to coach and develop their direct reports. They used many moments in their workdays to remind their employees about why they do what they do, and what their expectations were in regard to how to work together as a team and interact with customers and suppliers. Thus, creating a meaningful and inclusive employee experience that motivates and inspires.
They also didn’t shy away from conflict and owned their mistakes. In the early days of their product launch, they had a few missteps on launching additional features. It would have been easy to place the blame on the engineering team, but instead they got together as a team and went through a series of questions to help them understand what caused the issues, what worked, and what they will do differently the next time. They didn’t waste time on coming up with excuses, and rather focused their energy on learning from their mistakes, creating trust and accountability throughout the organization.
The meeting and quarterly planning rhythm they created throughout the organization, together with cascading goals, from the company to the leadership and every employee, created clarity and alignment, helping everyone to never lose sight of what the real priorities were they needed to work on and deliver that quarter.
This type of clarity, combined with a safe, trust-based environment, which allows for healthy and constructive conflict, swift decision making, and a culture of accountability that enables everyone in the organization to focus on collective results, is what differentiates Synchroni from their competition. Thereby, creating some of the highest customer subscription and retention rates in the market.
Synchroni is a prime example of integrated leadership at its best. From a brain science perspective, an integrated Executive Brain leading the business from a corporate culture perspective, creates a constructive culture where self-actualization, results orientation and humanity prevail. Leading an integrative, healthy culture is not a piece of cake. It takes intentionality, discipline and humanity; all in the same mix.