Podcast May 3, 2022

E193 | What it Takes to Build an Organisation’s Culture with James L Heskett

Do your employees love your business? asks James L Heskett, UPS Foundation Professor Emeritus at Harvard Business School and author of Win from Within. Because if your employees don’t love your company, your customers won’t love it either.

In Win from Within, James argues about the importance of building organisational culture for competitive advantage. Having spent 30 years on this journey, his latest book is about busting myths and shattering beliefs around what it takes to build an organisation’s culture.

Why is your company culture so important? Because, argues James, if you need to attract customers, then you need to have great employees. And to attract great employees, you need to have a great environment that encourages them to come join you and to stay the course.

In fact, the most amazingly successful businesses, says James, are those who have at their heart the trifecta of employee engagement, customer engagement, and sales, growth and profit levels for the investor.

Does yours?

To find out more, download and listen to this episode today.

On today’s podcast:

The obsession with culture
Win from Within
The four steps to hiring great employees
It doesn’t take long to change culture
The problem with the hybrid work model

Links:

Article – Does Remote Work Mix with Organisational Culture?
Book – Win from Within: Build Organisational Culture for Competitive Advantage
Website – James L. Heskett

The Win from Within with James L Heskett

As they say, you learn by teaching, and such was the case for James Heskett, UPS Foundation Professor Emeritus at Harvard Business School, where he has taught for over 40 years in a variety of subjects. They initially hired him to teach business logistics, but he ended up teaching marketing and service management, entrepreneurial management, and general management. He was even head of the MBA programme at one point.

James has also consulted on several continents, been on more than a dozen for profit company boards, as well as not for profit boards and advisory committees as well as writing about 20 business books.

His latest book, Win from Within is all about how you can use organisational culture to gain a competitive advantage.

How? Let’s find out.

Entrepreneurial management

What is the difference between non-entrepreneurial managers and entrepreneurial managers?

“Would you rather be rich? Or would you rather be king? [This] is an important question that every entrepreneur has to ask him or herself. Do you want to get rich and bring in a professional manager? Or do you want to remain King and be carried out feet first?”

But says James, there are very few non-entrepreneurial managers left any more. In the current climate, it’s about agility and fast moving times.

There’s no point doing long range planning, you can’t with COVID, wars, and everything else that’s going on. To stay relevant, your organisation has to be agile and keep trying to figure out what it takes to keep everything working.

The obsession with culture

James wasn’t initially hired by Harvard Business School to teach marketing, but that’s where he ended up, and over time he developed a respect for and an interest in customers.

Along the way, he began thinking about what it takes to influence customers, and when he combined research with colleagues on service management, they found that it was employee engagement that drove customer engagement.

“Customers come second and the thesis was that employees come first, and the two of them will drive profit for the bottom line for investors.”

Which led James and his team to the understanding that the truly outstanding firms have at their heart a particular trifecta – that is, creating high levels of employee engagement, high levels of customer engagement that result from the high levels of employee engagement, which together result in high profit sales, growth and profit levels for the investor.

Win from Within

In Win from Within, James’ 20th book, he aims to bust the myths that people still carry around organisational culture.

For example:

“I think many of us hold either consciously or unconsciously [the idea] that culture somehow is really terrific, it’s important, it’s essential, but it’s kind of a soft concept. It’s touchy feely and you can’t quantify it. And that’s nonsense.”

Having studied organisational culture and the impact of corporate culture on performance for over 30 years, James has found time again that you can have strong cultures that produce outstanding results, but you can also have strong cultures that produce disastrous results.

To make culture work for you and gain a competitive advantage, you not only have to have a strong culture, says James, but one that is adaptable, that is built around values that are involved in learning, innovation, people and their progress.

“If you go into an organisation that has a lot of people in contact with customers, that’s my version of heaven on earth because that’s when you get the impact of the employee on the customer and be transferred directly.”

The four steps to hire great employees

One of the things that James has written about and studied at great length is the idea that first of all you hire people for attitude, you train people for skills, you provide them with great tech support to make them heroes and heroines, and then you can say to them, ‘you have latitude to deliver results to your customers’.

“And if you do that out of order, what you have is chaos. This is a recipe, you do it 1, 2, 3, 4. It’s not a cafeteria, we’re not going to go in and just choose three out of the whole list. You got to hire for attitude, train for skills, provide that technological support, and then let them go and boy, do they respond. You know, if you’ve hired the right people, they go.”

It doesn’t take long to change culture

One of the most persistent myths around culture, says James, is the idea that it takes a long time to do anything about it.

But, that couldn’t be further from the truth. Just look at Satya Nadella at Microsoft, for example, or CEO John Luxaire at T Mobile.

You have to establish trust, says James, without the trust, nothing else works. And it’s the leader that has to do that. Whether that leader is a frontline leader, or at the top of the organisation, or anywhere in the middle. If you want to bring about cultural change, it starts with trust from leadership.

The problem with the hybrid work model

The issue with the hybrid model, says James, is the impact it has on organisational culture – you can be a good organisation working in a hybrid fashion, but you will never be great.

If you insist on a hybrid work model the most you can hope for is to preserve the quality of the culture in a hybrid involved environment, says James. He doesn’t think you can improve culture in a hybrid model, the task therefore is to make sure you don’t destroy what culture you do have.

To do that, advises James, you need to have a minimum amount of face to face contact, you can’t build a culture on remote technology. We humans are social creatures, we can survive in isolation for a short period of time, but we achieve more when we work in teams than we do individually.

And for the organisations who think they’re going to save money working remotely, they’re in for a shock, says James. Productivity may improve slightly when you allow employees to WFH, but to keep productivity up, you need to spend money bringing people together frequently, because employees and teams need to connect face to face.

“I don’t think companies are going to save any money working in a hybrid fashion, and they’re going to be challenged to preserve their culture. I think it can be done, but only with a great deal of effort. And I’m not sure we’re there yet. We’re learning.”

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