Can Your Culture Withstand an Economic Downturn?

There are two certainties about the next recession. 1) It will happen. 2) No one knows when. The good news? We can offer a few ideas to help you and your organization survive and thrive.

As background, let us take you back to the last economic downturn (from Dec. 2007 to June 2009). We were hard at work, partnering with a large research firm to conduct a 300,000-person study to understand what was helping some organizations achieve high-performance business results in the worst financial climate in decades. We published those findings in All In, a book with Simon & Schuster, showing a key differentiator for the best organizations was the strength of their cultures.

Specifically, if employees were engaged, enabled, and energized, a company had a much greater chance of success during hard times. In fact, cultures with high levels of engaged, enabled, and energized employees saw average annual operating margins of 27.4 percent for the three years from 2007 through 2009—twice as high as companies with just high employee engagement scores (but low enablement and energy) and three times higher than those with low engagement.

Our next step was to discover the steps a leader must take to create that kind of winning culture. That’s when things got really interesting. As we asked managers about their team cultures, we were often told they had a strong one, but it was hard to define. Sorry for being blunt, but that’s rubbish. If it’s so hard to describe your culture, then you don’t have a great one. Culture isn’t indefinable. When you walk into a great culture, it smacks you in the face with its concreteness. We knew there had to be very specific steps people must take to bring about a true cultural transformation; and we dug into the data to identify those that are the most crucial.

7 Most Powerful Steps to Strengthen Culture and Help it Survive a Downturn

Define your burning platform

Most leaders provide little or no justification as they introduce their ideas and strategies and ask their people for improved results. In the best workplaces, leaders define their purpose or mission with great clarity and instill a sense of urgency about it, making it clear that if everyone doesn’t do their utmost to carry it through, before long they will find themselves on the precipice of calamities.

Create a customer focus

In the highest-performing cultures, managers convey that employees must focus like lasers on customers, and they mandate a vigorous pro-customer orientation. This not only leads to exceptionally high client satisfaction and loyalty, but it provides moment-to-moment direction for all employees in making the right decisions and taking initiative on their own.

Develop agility

In a world of increasingly rapid change and uncertainty, our research shows that top-performing companies are seen by both their employees and their customers as much more able to deal with change. Employees are more insistent than ever that their managers see into the future and do a decent job of addressing the coming challenges and capitalizing on new opportunities.

Share everything

The best cultures are places of truth, of constant communication, and of marked transparency. Managers in these cultures share even the hard truths with their employees as soon as they can, and they encourage debate even if it rattles harmony. They leave the “pillows” at home; in other words, they don’t soften the blows. Employees know that their managers will be truthful and direct, and that builds trust and a larger culture of openness.

Partner with your talent

Great managers believe their success is a direct result of their peoples’ unique ingenuity and talent, not their own brilliance. As a result, they treat people like true partners and have a sincere desire to create opportunities for them to grow and develop—thereby retaining the best. This notion for some leaders is akin to fingernails on a chalkboard, but before employees will buy into a culture, they must be able to answer the WIIFM question: “What’s in it for me?”

Root for each other

Given our background in recognition, we were thrilled to find higher levels of appreciation and camaraderie in not only the innovative places we studied, but in cultures of great customer service, operational excellence, compassion, and ownership. In the best workplaces, teammates had much higher levels of goodwill and they spent much more time thanking each other peer-to-peer. These seemingly warm and fuzzy skills created tangible esprit de corps and a single-mindedness about living the right behaviors.

Establish clear accountability

As a capstone to this process, we found managers must learn how to hold employees accountable—and yet they must turn this idea from a negative into a positive. Employees want to be held accountable for hitting their goals, but they must be given the responsibility and tools to ensure their success, and then rewarded when they see a goal through to completion.

2 Comments

Robert Bird says:

February 8, 2019 at 10:43 am

Great article!!! Thank you so much for all the great information!

Mark Wearne says:

March 8, 2019 at 9:09 pm

Great findings. If only my employer had the mindset to want to change first in themselves and secondly to encourage a cultural change mindset in others around them. All one can do is to attempt to influence their ways by proving that gradual change works, and third that it is not one rule for them and another rule for everyone else.