Culture Club

T’S UNCLEAR WHO first said culture eats strategy for breakfast, but it’s one of the great truths of running a business. Without the right culture, not much positive can get done. And indeed, with the wrong culture, ruin awaits regardless of the business plan. Organizational cultures are tremendously powerful. From a pure business standpoint, they can raise standards, spur productivity and engagement, engender accountability, and boost employee retention and loyalty. They can ensure a customer’s welfare is paramount, or that every single worker is focused on the bottom line, or that they’re constantly looking for the next big idea. They can attract the right people and deter the wrong ones from applying. And when the culture is aligned with your own personality and beliefs in how a business should run, it just makes coming to work a win instead of a battle.

As Howard Schultz, the former CEO of Starbucks, has acknowledged, without its culture, his $125 billion company would be nothing: “The only competitive advantage we have is the culture and values of the company. Anyone can open up a coffee store. We have no technology; we have no patent. All we have is the relationship around the values of the company and what we bring to the customer every day. And we all have to own it.”

The power of culture is something that most business owners understand. More than 78 percent of the jewelers in our Brain Squad said they agreed that culture was critical to their company’s performance and success.

And yet culture is also something most small business owners don’t actively manage (only 39 percent of the jewelers in our survey said it was an active priority). This seems to be for two main reasons. First is the view of management that reflects the traditional theory that business is essentially contractual: Employees exchange their labor for money and are motivated by incentives and controlled by policies. But the second, probably bigger, reason is that culture is fiendishly hard to control. Unlike technology, inventory or physical environments, culture is “wet.” It’s human and involves emotions, social connections, ingrained behaviors, and psychology. And while culture is incredibly easy to spot — think of organizations like NASA, the U.S. Marines, the New York Ballet, Google or Trader Joe’s — it remains this nebulous, intangible thing that can be hard to corral.

It’s also one of the most difficult things to impose from the top down. This is partly because there is no one “best practice” model that can be implemented. Culture is inherently organic. It is made up of the unsaid stuff — shared values, expectations, social norms and pressures. It is the things people do when the boss is not around (which ultimately is probably the best definition of culture).

And annoyingly, it’s not like you can even ignore it. Even if you don’t try to manage it, a culture will take root. Every business has one. And it can change quickly.

“We discovered the hard way that our company culture changed for the worse when we expanded,” recalls Melissa Quick of Steve Quick Jeweler in Chicago. “It doesn’t matter if you have spiffs for PTO, contests for gift cards for the best restaurants, close stores to take everyone (22 people!) to the Vegas shows, give your staff Lollapalooza tickets … if you have a couple of negative people and don’t recognize it as a problem or take action, it will get out of hand quickly.”

To turn things around, the Quicks decided they had to do a complete reset, which included downsizing. “We realized we could have a better store culture and offer a better shopping experience by getting small, so we did.”

According to management theory, cultures can be plotted against two axes running from tight to loose and from permissive to ordered and hierarchical.

Writing in the Harvard Business Review (HBR), Harvard business professor Boris Groysberg and his team say cultures can be classified into eight types or styles.

Caring work environments are warm and collaborative, with a focus on relationships and mutual trust. This family-like setup is one a lot jewelers identify with.

Purpose is exemplified by shared ideals and contributing to a greater cause. Whole Foods before it was swallowed by Amazon was a good example.

• Learning is characterized by an emphasis on innovation and creativity. Work environments are open-minded places that spark new ideas and support the exploration of alternatives. Failure is not considered a bad thing. Think Tesla.
• Enjoyment is expressed through fun and excitement that is shared with customers. Zappos set the high bar for this kind of culture, again before it was consumed by Amazon.
• Results are characterized by achievement, performance and winning. Wall Street investment banks typify this approach.
• Authority is defined by strength, often reflected by the leader, along with decisiveness and boldness. Steve Jobs-era Apple is a great example.
• Safety is defined by planning, caution, and preparedness. Work environments are predictable places where people are risk-conscious and think things through carefully. Insurance companies and medical institutions often fit this model.
• Order is focused on respect, structure, and shared norms and traditions. The SEC would be an example of such a methodical place where people play by the rules, and leaders emphasize procedures and time-honored customs.

“Whereas some cultures emphasize stability — prioritizing consistency, predictability, and maintenance of the status quo — others emphasize flexibility, adaptability, and receptiveness to change,” Groysberg writes in HBR. “Those that favor stability tend to follow rules, use control structures such as seniority-based staffing, reinforce hierarchy, and strive for efficiency. Those that favor flexibility tend to prioritize innovation, openness, diversity, and a longer-term orientation.”

Most organizations are typically a mix of more than one style. Nearly all businesses — as commercial enterprises — are results-oriented to some degree, but a mom-and-pop business in a tight community will often be more focused on caring than, say, a Wall Street investment bank.

Although business cultures seem to rise and fall like fashion (the Silicon Valley model of smart failure, anti-hierarchy and innovation seems to be all the rage now), no one culture is inherently better or worse than another. For whatever problems the hyper-competitive, money-focused Wall Street model may impose, it also drives a tremendous work ethic and does what it is supposed to: attract bright young minds and bring in money. The key thing is that the culture is aligned with what the organization is trying to achieve.

As our chart shows, our Brain Squad jewelers ranked Caring as their No. 1 cultural value with Authority the least desired style.

The other thing about cultures is that they prevent behaviors as much as they promote them. As much as you may want to foster a cohesive culture, too much groupthink can be dangerous when times call for change.

When “it’s the way we’ve always done things” dominates, that can spell disaster for a commercial enterprise in a fast-changing world.

Turning a culture around takes time. In the following pages, we provide tips from jewelers and business experts on how to foster a driven, happy team whose goals and values are aligned with yours.

FIRST, LISTEN

Founders obviously play a significant role in setting company culture, but before too long, it takes on a life of its own and develops organically from the staff. Before you can change your store’s culture, you need to understand it and know how your staff views it. That requires spending time with them and discussing the issue. Form small groups — no more than four employees in each — and spend 60 to 90 minutes asking open-ended questions like:

• What 10 words would you use to describe our company?
• What advice would you give a friend if they came to work here?
• Around here, what’s considered really important?
• Around here, who fits in and who doesn’t?
• What does it take to succeed here? What behaviors get rewarded?

“Leaders tend to think employees won’t open up — but we’ve seen the opposite,” says Joseph Grenny, a social scientist and head of leadership training company VitalSmarts. “When an executive sits down and truly listens, employees will be surprisingly honest.”

Allison Leitzel-Williams has found that to be true at her family’s store, Leitzel’s Jewelry in Myerstown, PA. “Listen to your employees. Know there is more than one way to do something right and empower them. If you have a great culture, they will do great things for you.”

ESTABLISH YOUR PURPOSE

Nietzsche probably put it best: “He who has a why can bear with almost any how.”

Purpose may not be your No. 1 cultural priority, but it needs to be articulated clearly to new hires, in your written core values as well as modeled and celebrated to reinforce a positive company culture. “People who find meaning in their work don’t hoard their energy and dedication. They give them freely … Positive peer pressure kicks in, collaboration increases, learning accelerates, and performance climbs,” say business professors Robert E. Quinn and Anjan V. Thakor, writing in the Harvard Business Review. When your business involves some of the most important days in people’s lives, establishing purpose shouldn’t be difficult, but it can be overlooked in the day-to-day rush to get things done. Be sure to share the stories from appreciative customers.

ARTICULATE YOUR VALUES

In his book Delivering Happiness: A Path To Profits, Passion, And Purpose, which tells of online shoe company Zappos’ growth into a billion-dollar enterprise, late founder Tony Hsieh recounted how he resisted publishing formal core values – “essentially a definition of our culture” – during the first seven years because he had thought of it as a very “corporate” thing to do. The delay, he says, was one of his bigger management mistakes as the core values become central to hiring, the way staff interact with each other and customers, and the way the company does business. Rather than lofty sounding but meaningless verbiage, Hsieh said his goal was “a list of committable core values that we were willing to hire and fire on. If we weren’t willing to do that, then they weren’t really ‘values.’” The 10-point list, which includes values such as Deliver Wow Through Service, Embrace Change, Create Fun and a Little Weirdness, Do More With Less, and Be Humble, took a year to put together and was built on employee input. “Over time, our recruiting department developed interview questions for each and every one of the core values, and we tested our commitment during the hiring process,” wrote Hsieh. Christina Baribault-Ortiz says her store, Baribault Jewelers in Glastonbury, CT, has a similarly clear company mission that “any staff member could repeat at the drop of a dime.” She recommends framing your core values in a bright positive color and placing them on a shared wall.

FOCUS ON VITAL BEHAVIORS

When it comes to fostering cultural change, don’t worry about outcomes; focus on behaviors. Get those right and the outcomes will take care of themselves. Many managers understand this, but what most don’t appreciate is just how few high-leverage behaviors are needed to drive a lot of change, says BYU management studies professor Kerry Patterson in Influencer: The Power To Change Anything. Watch what your best performers are doing and try to determine the unique behaviors that make the difference. Run mini experiments to verify your hunches and then put your findings into practice. Patterson cites the case of a company that wanted to improve its service culture but had only one sales team that met its targets in terms of customer satisfaction. By observing them in action, it was found they did five things without fail: Smiled, made eye contact, identified themselves, let people know what they were doing and why, and ended every interaction by asking, “Is there anything else that you need?” Simple stuff, but when implemented without fail, the company got the results it was looking for. “Confusing outcomes with behaviors is no small matter — it’s behind most failed influence strategies,” says Patterson.

TELL STORIES

When trying to cajole workers to accept cultural change or new behaviors, it is easy to come off sounding like a nag, a manipulator or just an overly demanding business owner. As opposed to lectures or directives, stories are effective because they transport people out of the role of resistor/critic and into the role of participant in an emotionally charged drama. Stories help people view the world in new ways while giving them hope. They can show the consequences of mediocrity and connect people with the experiences, feelings, and impact of bad performance. Keep the issue alive by telling stories that illustrate work well done and the real human cost of shoddy work, such as lost diamonds, ruined weddings or customers who felt they weren’t listened to. In addition to having characters who are identifiable, “make sure that the narrative you’re implying contains a clear link between the current behaviors and existing or possibly future negative results,” says Patterson. Also be sure that the story includes positive replacement behaviors that yield new and better results. When you’re promoting change to the way people work, your stories need to deal with both the questions of “Will it be worth it?” and “Can I do it?”

According to studies, it takes an average of 10 to 20 exposures to an idea before it will be accepted. “It’s hard to remember that it takes soooo much time to shift culture. Stick with it! The reward is actually in the journey,” says Natasha Henderson, owner of Saxon’s Fine Jewelers, Bend, OR. Tom Duma, owner of Thom Duma Fine Jewelers, in Warren, OH, says his experience has been similar: “Company culture starts with the head (owner, management), then vision and core values. And then training, training and more training to get a staff of 10 or 50 to understand and function in your desired culture,” he says.

PROMOTE ACCOUNTABILITY

Defending the high standards of a culture requires peer accountability. Indeed, on high-performing teams, peers manage the bulk of the heavy lifting when it comes to maintaining standards. Almost counterintuitively, it is in weaker teams that bosses must enforce standards. Regular weekly reviews can provide opportunities for mutual feedback and establish peer-accountability as a norm, Grenny says in his book Crucial Accountability. It’s key that your store becomes an environment where everyone feels empowered to challenge anyone if it is in the best interest of the business. As the boss or manager, you must also be quick to defend the high standards. A chronic poor performer is a clear impediment to the goals you’ve set. How you handle this situation will let your team know whether your highest value is keeping the peace or pursuing performance. “When you ask a group to step up to high performance, you are inviting them to a place of stress — one where they must stretch, where failure is possible, where interpersonal conflicts must be addressed,” writes Grenny. “If you shrink from or delay in addressing this issue, you don’t just lose that person’s contribution — you send a message to everyone else about your values,” he says.

APP IT

Online reward programs based in psychological testing can make the implementation of reward programs easy. An example is Bonusly, a program that allows workers to recognize each other’s hard work and reward it. “We give all employees 150 points a month that they can give to co-workers for doing a great job,” Optima Office founder and CEO Jennifer Barnes told Inc. magazine. “It’s important because it shifts the company culture from just trying to impress the boss to working for the team.” Evidence highlights the importance of keeping incentives small, spontaneous and symbolic. If the rewards are too large, the focus on extrinsic rewards may undermine workers’ motivation to give their best effort, leading them to only provide help with the expectation of receiving a payoff.

HIRE TO BUILD CULTURE

Hire for culture not skills is a business truism. Or as the shorthand version puts it: A Good Hire = Skill + Will + Cultural Fit.

But what many managers look for and are acting on is more of “an intuitive sense of, ‘Would I get along with this person?’ and that often isn’t very reliable,” Kirsta Anderson, head of culture transformation for Korn Ferry, told the Wall Street Journal. Marc Majors, owner of Sam L. Majors in Midland, TX, says that was certainly the case with his hiring. “I used to hire people off of first impressions, and I’ve been fooled a time or two doing that. One time I hired a gal after interviewing her for about 30 minutes and got stuck with a morally drained individual. It caused a toxic workspace once her secrets got out,” he says. Now he tries to be much more methodical.

Anderson says hiring managers need to go deep and figure out whether applicants are in sync with more fundamental elements of their culture. “Are they excited about how the company innovates, serves customers or makes a social impact? Will they mesh with the way individuals and teams at the company work, by collaborating or competing? And will they naturally make decisions the way the employer wants — individually or as a group, embracing or avoiding risk?”

Keep in mind that culture is not someone who looks and talks like you and has had similar life experiences.

Here’s what it is:

• Shared enthusiasm about a company’s mission or purpose
• A common approach to working, together or individually
• A mutual understanding of how to make decisions and assess risk

Here’s what it’s not:

• A common educational, cultural or career background
• A sense of comfort and familiarity with co-workers
• Shared enjoyment of such perks as ping pong and craft beer

Dave Fadel of Fadel Enterprises in Bountiful, UT, says his approach to building a store culture is to “compliment staff on anything positive.” It’s a model many jewelers would be wise to follow. Praise is one of the best ways to guide behavior, and yet most managers are total misers, rationing it out as if there was a significant cost attached and then only for outstanding work. But according to Patterson, when polled, employees reveal that their No. 1 complaint is that they aren’t recognized for their notable performances. While a leader may shy away from sharing praise for efforts that are simply a part of an employee’s job description, people crave that sense of recognition and appreciation, Patterson says. He recommends giving each team member time during your Friday meeting to share not only their own experiences but a shout-out to someone who helped them during the previous days. When they know this is coming each week, they will be more inclined to stay connected and keep track of who they worked with and how they were able to help each other.

INSTITUTE A “NO ASSHOLE RULE”

Retail can be a high-pressure business at times, but that shouldn’t be allowed to excuse bad behavior. In The No Asshole Rule: Building A Civilized Workplace And Surviving One That Isn’t, Bob Sutton, a professor at Stanford Business School, makes a well-reasoned argument that assholes — who he defines as self-centered, abusive, toxic individuals — are not only bad for the people that work with them, but for the organizations that harbor them. And even if assholes are successful, life is too short and too precious to tolerate them, he says. “There’s all this negative carnage. The people around them, their physical and mental health and personal relationships, they all suffer. No positive culture can survive their corrosive influence. Show them the door,” he says. Michael Kanoff, owner of Michael’s Jewelers in Yardley, PA, concurs. “Team chemistry is everything to me. For years, I felt I always worked with someone who brought the entire company down. We no longer have that and we are doing better than we ever have.”

MAKE IT A GREAT PLACE TO WORK, BUT …

Culture is often the difference between your team waking up thinking, “I have to go to work” and “I get to go to work.” Happy hours, team lunches, birthday shout-outs, and company outings can help build a positive environment, and people generally do their jobs better when they trust and like their co-workers. But culture is not about providing a company keg or other frills. It’s hiring people who have meaningful shared values (and who actually want to have beers together). Celebrated business author Tom Peters says, “Give a lot, expect a lot, and if you don’t get it, prune.” That may sound glib, but each part of this advice — the setting of standards, the communicating of them and the systematic support to ensure they can be carried out — requires conscious effort on the part of the business owner. People want to work for a company that they can be proud of and that is going to bring out the best in them. It’s the serious stuff, not the frivolous, that matters.

MODEL THE CULTURE

“The greatest influence in the world is the influence of norms,” says Grenny. “When people see visual models of desirable behavior, and when that behavior becomes widespread, it also becomes self-sustaining.” However, few people understand that norms change one person at a time. When someone offers a living example of behavior that solves a problem, others can be powerfully influenced by that one person. “When we coach executives to inspire others, we tell them to find that one positive example — a person, a team, a unit that went the extra mile to help a customer, to help out a fellow employee, meet a particularly high standard — and make it evident these are your expectations and let it sink into the collective conscience of the entire organization,” says Grenny. It helps to keep your eyes open for such positive behaviors, says Dorothy Vodicka, owner of The Gem Collection in Tallahassee, FL: “Do the one-minute manager technique of catching employees doing the things you want them to do and rewarding that behavior.”

As the company leader, make sure your mission statement is enacted in the “micromoments” of daily organizational life. “These consist of small gestures rather than bold declarations of feeling,” write management professors Sigal Barsade of Wharton, and Olivia O’Neill of George Mason University in a column in HBR. “For example, little acts of kindness and support can add up to an emotional culture characterized by caring and compassion.” Such signaling happens at Sherries Jewelry Box in Tigard, OR, where owner Sherrie Schilling-Devaney cites Caring and Joy as their top priorities. “We try to have some fun and laugh every day, even if it is just at ourselves,” she says. The same goes for the less glamorous aspects of work, says Ralph Vandenberg, owner of Vandenberg’s Jewellers in Alberta, Canada. “It all starts with the boss. Do the dirty jobs. Don’t act like any job in the store is beneath you. Not much motivates like the staff coming in and seeing the boss vacuuming or cleaning the bathroom.”

ENLIST YOUR OPINION LEADERS

The people who make up our social networks are the key sources of persuasion in our lives. But some of those people are far more powerful than others. When it comes to adopting new ideas or behaviors, for example, it is estimated 85 percent of the population will not adopt a practice until they see these so-called opinion leaders or early adopters do it. These people represent only about 13.5 percent of the population. They are smarter than average and tend to be open to new ideas, but they are different from innovators (the other 1.5 percent of the population) in one critical way as they are socially connected and respected. When trying to improve your culture, you have to identify and win these people over to your cause. “Spend a disproportionate time with them, listen to their concerns, build trust with them, be open to their ideas, rely on them to share your ideas, and you’ll gain a source of influence unlike any other,” writes Patterson in Influencer.

SEEK ADAPTABILITY

There is a second danger in hiring for cohesion: Too much emphasis on cultural fit can stifle diversity and cause managers to overlook promising candidates with unique perspectives, an important attribute in our fast-changing world.

“Where everyone thinks in similar ways and sticks to the dominant norms, businesses are doomed to stagnate,” says Wharton organizational professor Adam Grant, urging that you hire for adaptability as well.

“In some environments, culture can be so cohesive and strong that groupthink can occur where management or staff teams are committed to a singular vision that crowds out any view on a more viable future alternative — organizations that have a very strong product identity and value prop are more susceptible to this than others,” he wrote in a 2019 paper. As advertising legend Walter Lippman put it: When all think alike, then no one is thinking.

Kim Hatchell, the manager at Galloway & Moseley in Sumter, SC, says that’s one of the things she’s learned in the business: “Do not be so rigid and stuck in the ‘we’ve always …’ mindset. Expand and include new ideas,” she urges.

STRUCTURE YOUR ONBOARDING

Get a robust onboarding plan in place, and you’ll allow new hires to navigate your company culture with confidence and quickly get up to speed. “Clearly defining organizational goals and explaining the ‘why’ behind them is essential during the onboarding process, when new employees are learning the ropes and grappling with what is expected of them. It also sets the scene for personal accountability,” former Intel CEO, Bob Swann, told the New York Times in a story about his efforts to change that company’s culture.

A successful onboarding program:

• Helps new hires understand how work is done in a company and addresses the details of the company’s daily operations.
• Outlines the organizational structure and explains where everyone fits in the framework.
• Reinforces the company brand and its values, mission, and vision.
• Acclimates new employees to their surroundings and environment, which helps them feel connected to others.

BUILD TRUST

To a lot of employers, culture means employees who will keep working hard even when no one is watching. Trust is thus central to culture. The research of neuroeconomist Paul Zak has identified the brain chemical oxytocin — shown to facilitate collaboration and teamwork — as a key player in this regard: The higher the levels, the more energetic and collaborative the workers. In Trust Factor: The Science Of Creating High-Performance Companies, he details a framework for creating a culture of trust and building a happier, more loyal and more productive workforce. The framework includes eight key management behaviors that stimulate oxytocin production and generate trust: 1) Recognize excellence; 2) Induce “challenge stress”; 3) Give people discretion in how they do their work; 4) Enable job crafting; 5) Share information broadly; 6) Intentionally build relationships; 7) Facilitate whole-person growth; and 8) Show vulnerability. Ultimately, Zak concludes, managers can cultivate trust by setting a clear direction, giving people what they need to see it through, and then getting out of their way.

TREAT PEOPLE LIKE ADULTS

Create policies for the many, not for the few. That allows you to design policies to bring out the best in people, not micromanage their every move or bind them in red tape. Yes, some people will try to take advantage of you sometimes, but treat everybody like an adult, make sure they understand what their responsibilities are and trust them to do the right thing — and most will respond in the right way. “People perform best when they are themselves. It is more relaxed and makes the client feel more relaxed,” notes Don Unwin of Sterling Jewelers in Wethersfield, CT.