Culture AND Performance, Why You Need Both for a Successful Organization

Explaining the boxes

Low Culture, Low Performance

The box in the lower left is labeled "Disaster". This should be self explanatory but may not be that obvious. Startups can start here but need to move quickly either up or sideways. Without a change to improve culture or performance the organization is doomed at the outset. When you are a startup you can create a culture out of nothing, no baggage. Existing companies have to contend with what is there and move to actively change it to succeed. See this article in the Harvard Business Review about a popular smoker company and how the culture affected its overall business. Some companies will eventually move here from the other boxes usually as a cascade of problems overwhelm management to solve.

In this group failure or success is highly dependent on the leader and the ability of that leader to keep the end goal in sight and be willing to shift people and resources around to achieve that end. More importantly, the goal is to get out of this box as quickly as possible.

Low Culture, High Performance

We have seen this in a dozen movies about Wall Street - the Wolf of Wall Street, Greed, also at internet startups, and more. This is the area of Short Term Success. Performance (meaning cash) is necessary to keep the doors open, pay the bills, pay the employees, but these tend to be more crash and burn types of organizations. They can achieve some initial success. Real life examples include Adam Neumann of WeWork and Elizabeth Holmes of Theranos. For those old enough, most of the internet bubble companies that are no longer around from the crash of 2000 fit this category.

In this group you will find employees who are protective of their work, not willing to share, quick to blame others. They bring in the money but the havoc and disruption eventually crumbles the company. It needs to be noted that the employees are following by example. Change the example, change the employee.

High Culture, Low Performance

There are a lot of companies of all sizes in this box. They make enough money to satisfy the owners and the employees, nice work environment, happy people. Companies can get stuck here for ages as well as employees. Companies that have strayed from their original purpose, have no specific visions for the company, loose on goals or no tangible goals and deadlines to achieve them. The value of the Moral Victory is high on the balance sheet.

In this group employees are not pushed to do bigger and greater things. Probably the owner is the same. Many original engineer founders are in this group. They are more happy to tinker than to set about making plans for growth. When the employees see that type of behavior they feel it is ok to be lax in how they operate.

High Culture, High Performance

This is the sweet spot of the chart. Long Term Success. But there is probably less than 10% of the companies in this box. You might put Delta Airlines, Amazon, Tesla or Zoom in this category. The owner/leader is driving a high culture of who they are but also keeping people accountable to improvement and advancements within the company and in the market.

Companies in this category generate sales, profits, bonuses, opportunities, development, and more. The trick is to figure how to stay here year after year after year. This is the most challenging, but the most rewarding balancing act for the leader.

Moving around the boxes

The demise of a High C, High P company usually starts with a decline in culture, cutting corners, bad decisions that are covered up, bad behavior that is covered up. Once you are on the downward slope it is extremely hard to regain the culture. From there you wind up in one of the other boxes. Or not in a box at all.

Culture is a top down thing not grassroots up. Some might call it tone of the owner or CEO. However he or she works is how the rest of the company will work. A team may have its own culture but when the team leader is promoted or leaves the culture will change. Similar to when one company is bought by another company. The company being bought will eventually need to follow the culture of the buyer.

While I appreciate culture and deem it a necessity to long term success, there always needs to be a component of striving to do better, striving to develop the owner and the employees, and striving to delight the customer.

As the leader, how do you see your culture and how you are leading by example?