Build a ‘Quick and Nimble’ Culture

20140108_4

by Dan McGinn  |   11:00 AM January 7, 2014

Since 2009, Adam Bryant has interviewed hundreds of CEOs for the “Corner Office” feature in The New York Times. This month he’s publishing his second book based on the interviews: “Quick and Nimble: Lessons from Leading CEOs on How to Create a Culture of Innovation.” He talked with HBR about why a company’s culture is more important than its strategy — and some of the innovative tactics that CEOs have used to help create a high-performing culture. Excerpts:

Culture is such an amorphous concept — if you and I stood at a whiteboard and tried to list elements of our companies’ cultures, we could come up with 100 things and they might all be true. A lot of managers just let culture happen — it becomes the sum of the personalities, good and bad, that work in an organization. While writing this book, I became convinced that culture really does drive everything. Managers do focus on results, but I think culture drives results. That’s the important equation.

It’s the creation of silos. As one CEO put it to me, “Silos are what topple great companies.” As human beings, we like to operate in small tribes. If there’s not someone creating and communicating an overarching, simple plan for the larger organization and getting everyone to pitch in, people start breaking down into small tribes and pursuing their own goals and agendas. That’s when you see a culture focusing inward, instead of outward on competition. That’s the fundamental problem that prompted Microsoft to announce its big restructuring last summer — it recognized it had too many separate divisions.

In thinking about how CEOs communicate, I’ve become a big believer in the power of the number three. I’ve come to admire the CEOs who can come up with three or fewer metrics for how they measure company performance. When I’m interviewing a CEO and ask about their values, if the CEO says the company has 7 or 8, I privately make a bet with myself that he won’t be able to remember them all. Very often, he can’t. If the CEO can’t remember the company values, how will anyone else? So keep things simple, and keep repeating it.

Many organizations have too many people who spend their days sitting behind their 30-inch monitors. These massive screens in our cubicles have become our new caves — it’s easy to stay in there. CEOs recognize email as a problem. They see the endless CC: loops. They see protracted arguments that could be settled in 30 seconds of face-to-face conversation. As one CEO told me, “Email taps into this bad part of our brain where everyone wants to have the last word.” Smart companies come up with very specific rules to try to uproot that email culture. They require people to pick up the phone or walk down the hall. Culture is built from relationships between people. Email does nothing to build relationships, and can actually damage relationships.

When I say “adult conversations,” I’m focusing on the kind of problem that a manager and an employee need to discuss candidly. The CEOs I interview say people will do everything they can to avoid those conversations. This is where the power of rationalization kicks in. Managers will say “I’m too busy,” or “Maybe it was just a one-time thing,” or “I’ll wait until the performance review next month.” People avoid these things because they’re difficult—there’s uncertainty and stress. I spoke with a neuroscientist who says that when a boss asks an employee into the office and closes the door, the same parts of the brain light up as if your life is in danger. But I do encounter companies that teach people rules for having these conversations, some of which are in the book. And in the management roles I’ve held at The New York Times, every time I have one of these conversations, I feel great afterward. You can feel the tension dissipate and the energy increase.

A few years ago I began managing a group of reporters at the Times, some of whom I didn’t know. In our first meeting, I tried to describe the important things they should know about me. One example is that I really hate errors in stories, particularly in the kinds of feature stories we produced. It’s probably the most important thing they needed to know about working with me. Sure enough, over the next 18 months, we had only two corrections as a team. Later I talked with a CEO named Ivar Kroghrud of QuestBack, who wrote a formal user manual of his own quirks and preferences. (One example: “I tend to shy away from conflict and confrontation. I sometimes accommodate easily to the needs of others when challenged. I am aware of this and am working on it.”) A user manual recognizes that we all have our idiosyncratic preferences, and people will work together more effectively if they get to know each other’s quirks quickly. As one CEO put it, “Why not tell people up front, and remove the mystery?” I really believe this is the kind of thing everyone will do 20 or 30 years from now.

I’ll focus on past employers, not my current one. But you are right — doing these interviews does make you see opportunities to improve and makes you more aware of untapped possibilities. I tend to think of organizations as eight-cylinder engines, and in every organization you ask: “How many cylinders are actually firing?” If the answer is five or six, then you think, “How awesome and powerful would it be if we could unlock those two or three extra cylinders?”

Dan McGinn is a senior editor at HBR.