The 7 Corporate Culture Questions Every CEO Should Ask

Leadership and learning are indispensable from one another.  ~John F. Kennedy

I like questions.  Questions make people think.  Statements may go in one ear and out the other, but a good question will bounce around inside your head until you come up with an answer.  And good questions often breed even better questions.  And the outcome of all these questions is often a new insight.

Executives have been trained to make statements, to deliver facts and information via PowerPoint and to overwhelm others with massive spreadsheets no one can understand. It’s what I call “razzle – dazzle” management.  Energetic and impressive, but not really educational or insightful.

Education comes from the Latin word, “educo” which roughly translated means to draw out.  Real education then comes from the ability to draw out insights and answers from the student rather than pour in facts and data.  And one of the best ways to draw out new insights for the learner is to ask questions!

While must time is spent in senior team meetings talking about sales, products, costs and profits, little time is spent on corporate culture, even though culture directly impacts performance, and a recent survey of 1,900 CEOs and CFOs rated culture as the number one driver of business value.

7 Important Culture Questions:

  1. What is the business case for culture in our company?

Before you can really use the power of culture as a business value driver, it is important to try to understand the “cost of a poor culture” and the business benefit of a culture that is aligned with your business strategies.  One of the ways to get your team to understand the business case for culture is to talk about how cultural barriers such as poor cross functional handoffs, withholding information, not following up with teammates in a timely manner, and other dysfunctional behaviours get in the way of project delivery and execution on important strategic initiatives.

In the case of the recent incident at United Airlines where a passenger was forcibly removed due to overbooking, the day after the story broke the market value of the stock was reduced by $1.8 billion. That’s a big case for culture.

Another broad rule of thumb is to ask your team how much of a productive days work is wasted through blaming, finger-pointing, slow responses, lack of trust of other departments, poor teamwork, poor customer service, etc. Usually the number is around 30%.  Take your total employee cost figure and multiply it by that number (say 30%) and you get the cost of a poor culture.  It’s a staggering figure in most cases.

2.  Is our culture an asset or a liability? How would we know?

Does your team know the current strengths and weaknesses of your current culture?  Have they done a culture assessment?  Have they held conversations with their team about the culture. A strong culture can be a significant competitive advantage, since anyone will sooner or later copy your products and services, but they can’t copy your unique culture.

3.  Is building and sustaining a high-performance culture a part of our formal, written business strategy?

When an initiative shows up on the formal strategy document and specific accountabilities get assigned, more often than not those initiatives get funded and resourced.  Have you put a High-Performance Culture as one of your key business strategic initiatives?  Do you have specific plans with milestones and deliverables against it?  Is it properly funded or just a “hope to improve” item?  What gets measured and reported often gets done!

4. Is alignment with culture and values a part of performance reviews, bonuses and promotions?

In many companies, values and behaviours are just words on the wall or in the employee handbook and have little impact on the day-to-day work.  By putting culture and values as a significant part of performance reviews, promotional criteria and bonuses, they suddenly become more important. And if the scores are given through a 360-degree evaluation process, they have even more power to influence behaviour.

5.  Have we mapped the various subcultures and their alignment with the overall values and strategy of our business?

One of the major recent insights into corporate culture is that most companies are composed of numerous subcultures rather than one overall corporate culture. And these subcultures can be strong influencers of “how things get done around here”.  If you don’t understand the subcultures inside your company, then you really don’t understand your operational culture.  In some cases, subcultures are strongly aligned with the vision, values and business strategies.  And in other cases they present significant barriers to productivity and positive change.

6.  Do we as a senior team talk about culture as often as we talk about costs, profit and business performance?

Much of corporate culture is developed through stories and the things people talk about the most.  Stories of hight creative or accountable individuals are often told to new employees long after the individuals have retired or left. Stories contain the viral seeds of your culture.  If the senior team routinely talks about sales, costs and profits, but not about values and cultural behaviours, the few times culture is mentioned it will be discounted, because everyone “knows how important cost are to management, not culture”.

7.  Does our new employee hiring and on-boarding process help people understand our desired culture and why it is important?

When was the last time the senior team sat through a new employee indoctrination process? To often these are becoming menu driven and few put much emphasis on expected behaviours and culture. It is important to remember that if you don’t indoctrinate new employees, at all levels, in the company culture, they will bring their old company culture with them as the default.  And when many employees come on board without a good acculturation process, you will wind up with a very fragmented culture.

These 7 questions, as good as they are, often lead to even better questions being asked and explored by your leadership team and will undoubtedly spark a new focus in everyone’s part on the importance of culture to your business success.

And a bonus question:  How often do we have open debates and reviews of our culture and values?

Sometimes asking the right questions takes more courage than finding the answers!

Written and Posted by: John R. Childress

Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid

e: john@johnrchildress.com
Twitter @bizjrchildress

Read John’s blog,

On Amazon: LEVERAGE: The CEO’s Guide to Corporate Culture

Read  The Economist review of LEVERAGE
Also on Amazon:   FASTBREAK: The CEO’s Guide to Strategy Execution

About johnrchildress

John Childress is currently Visiting Professor in Strategy and Culture at IE Business School in Madrid and a pioneer in the field of strategy execution, culture change, executive leadership and organization effectiveness, author of several books and numerous articles on leadership, an effective public speaker and workshop facilitator for Boards and senior executive teams. In 1978 John co-founded The Senn-Delaney Leadership Consulting Group, the first international consulting firm to focus exclusively on culture change, leadership development and senior team alignment. Between 1978 and 2000 he served as its President and CEO and guided the international expansion of the company. His work with senior leadership teams has included companies in crisis (GPU Nuclear – owner of the Three Mile Island Nuclear Plants following the accident), deregulated industries (natural gas pipelines, telecommunications and the breakup of The Bell Telephone Companies), mergers and acquisitions and classic business turnaround scenarios with global organizations from the Fortune 500 and FTSE 250 ranks. He has designed and conducted consulting engagements in the US, UK, Europe, Middle East, Africa, China and Asia. Currently John is an independent advisor to CEO’s, Boards, management teams and organisations on strategy execution, corporate culture, leadership team effectiveness, business performance and executive development. John was born in the Cascade Mountains of Oregon and eventually moved to Carmel Highlands, California during most of his business career. John is a Phi Beta Kappa scholar with a BA degree (Magna cum Laude) from the University of California, a Masters Degree from Harvard University and was a PhD candidate at the University of Hawaii before deciding on a career as a business entrepreneur in the mid-70s. In 1968-69 he attended the American University of Beirut and it was there that his interest in cultures, leadership and group dynamics began to take shape. John Childress resides in London and the south of France with his family and is an avid flyfisherman, with recent trips to Alaska, the Amazon River, Tierra del Fuego, and Kamchatka in the far east of Russia. He is a trustee for Young Virtuosi, a foundation to support talented young musicians. You can reach John at john@johnrchildress.com or john.childress@theprincipiagroup.com
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