Organizations that value their people and prioritize increasing their work engagement enjoy 81% lower absenteeism and 58% fewer safety incidents.
In a world where adapting the company’s strategy is crucial to its survival, employee engagement becomes increasingly important.
The organizations that have realized this don’t only care about the performance of their people but also about their feelings during the workday. Taking care of their employees is a high priority for leadership.
And the best among them are those that cultivate a growth culture. In a culture where the people feel safe and are allowed to learn through experimentation, there are strong bonds of trust between them and transparency prevails.
By the end of this article, we’ll have discussed in depth every one of the aspects of a growth culture and, through the success stories we’ve shared, you’ll find tips to apply and elevate your own culture.
These are the 4 most important actions to foster a growth culture:
- Fail, learn & adapt - fast
- Trust in your people
- Build on your values
- Develop transparency
Fail, learn & adapt - fast
Create a safe environment
Safety is the primary, the most important, aspect of a growth culture. Not physical safety, that’s usually easy to provide and necessary, but psychological safety.
It’s impossible to foster a growth culture when fear is a dominant feeling in your people’s working life.
When people are afraid, they don’t take risks. If they know that they will be punished for their mistakes or even lose their job, they’ll be reluctant to venture beyond their comfort zone.
Fear urges people to follow the rules. They care more about “getting caught” than “making it work.” They do what they’re told in a more literal sense without reading between the lines, becoming rigid and unable to maneuver through the obstacles.
If they don’t feel safe, they stop caring about the company and their survival becomes their priority. Therefore, people will seek refuge in the rules to justify their decisions and protect themselves.
The organization's progress becomes irrelevant in their daily work lives and people try to get on with their work, stay under the radar, and not call attention to themselves.
When fear dominates the workplace, people hide their mistakes and lie their way out of difficult situations or, even worse, they follow the rules indiscriminately, damaging the organization in cases where they don’t apply because they fear getting punished.
💡The lack of psychological safety is detrimental to an organization’s culture.
The most impactful leadership action
What if all of your people were comfortable with taking risks and felt safe to try new things?
Building a culture that values safety is not a herculean task. And the most straightforward action leadership can take is to normalize mistakes.
What better way to achieve this than for leadership to admit its own failures. Leaders that openly admit their weaknesses invite other people to do the same.
It’s hearing your leader say, “I don’t know,” or “I need help with this. What are your ideas?” or “This is on me. I made a mistake” that convinces people that these behaviors are not condemned.
People feel more comfortable sharing their mistakes and gaps when they see other people doing the same and receiving support instead of reproval.
In too many companies, making a mistake or failing at some task is treated as a major setback and is punished. It takes surprisingly few of such occurrences to send a message that failing is not permitted.
And when failure is forbidden, people won’t take any risks.
On the contrary, normalizing mistakes provides your employees the psychological safety to take calculated risks and initiatives that drive faster progress.
💡Normalize mistakes to encourage calculated risks.
Innovation happens after the failure
A mindset shift that cultivates innovation is to treat failure as a learning opportunity. Examine what went wrong and how the people involved could have acted differently.
Don’t focus or criticize previous wrong decisions; instead, focus on what went wrong with the decision-making process. Examine the assumptions and the information available at the time of the decision. That’s how you convert misplaced decisions to valuable insights.
Even if a mistake was costly, it should be treated like an expensive lesson. File it under the company’s training expenses, if you have to. When mistakes are viewed that way, it feels like a huge waste of resources to fire someone the company just spent so much money to train.
Besides, when people realize the gravity of their mistakes and understand their consequences, then they work hard not to repeat them.
However, allowing mistakes is not enough. In a truly growth-oriented culture, leadership not only permits but also urges a second attempt and a second experiment after the first failure.
And then another and then another until the goal is achieved.
Innovation is not efficient precisely because it requires a lot of failed attempts. Companies that don’t reward risk and new initiatives can’t innovate. Leaders must understand this.
You can’t order people to “innovate.” You can only enable them.
To enable innovation, go beyond offering permission for failure. The value of a growth culture is in the encouragement of attempting again.
Experimentation and resourcefulness drive the company’s growth. Because through them people develop their skills and improve their performance.
💡Treat mistakes as lessons to ignite innovation.
Costco is now famous for its unique culture. Its employees enjoy salaries and perks not easily found in other companies of the same industry and report higher work satisfaction.
A lesser-known fact about the company is its financial stability. Since it went public in 1986, the company has enjoyed a relatively stable increase in its share price. It has outperformed the S&P average since 2010.
James Sinegal, the co-founder of Costco and its first CEO, and his successor, Craig Jelinek, believe that taking care of their people first is the best long-term investment. Its extremely low turnover rate, less than 10%, feels like more than a strong indicator that they’re right.
In Cascade, managers have many opportunities to reinforce the notion that failure is not a career-ending event in the organization and boost its people’s morale.
Trust your people
Trust must be company-wide
Leadership is responsible for creating an environment where people feel safe to make mistakes and take calculated risks. Fear flows from top to bottom.
When, for example, a project manager fears for his performance and the impact of his mistakes, he transmits that fear to his team. And each person spreads it further downwards.
On the other hand, trust and safety flow both ways.
Managers can create a safe environment for their direct reports by encouraging them to share everything that’s not going as expected and then offering them support.
At the same time, every person can develop trust and a circle of safety laterally and with people above by providing support with as simple an action as asking, “How can I help?”
Although every employee can create a relatively safe circle around him, leadership must partake in this endeavor. Otherwise, those circles will only be isolated pockets of safety.
If people with authority mistrust their teams and create hostile conditions, then safety and trust will be impossible to form inside the organization.
💡Leaders must exhibit trust.
Empower your people by giving them authority
We mentioned earlier that fear leads people to use the rules as their only safety anchor. The antidote to that is empowerment because it helps people build a more healthy relationship with the rules.
Rules are not meant to be followed blindly. Otherwise, there wouldn’t be any need for human intervention and critical thinking.
Rules serve us well when operations run normally when there isn’t a crisis or an unforeseen occurrence. In those cases, it’s humans who exercise their extraordinary ability to decide that the rules are irrelevant and instead they do the right thing.
In those special cases, we don’t put our trust in the rules but in the people. In other words, leaders should trust their people to know when to break the rules.
People are capable of finding the exceptions and act for the benefit of their company and the customer as well.
Empowering your people to make decisions and take initiatives is a strong indication of trust. So give your people permission to make the right call and you’ll send the message that you trust them to know when to break the rules.
How to encourage decision-making
Empowerment and cultivating trust demand a lot of effort and require letting go of organizations' strict structure.
Traditionally, companies tried to find efficient ways to pass the information that the front-line employees have to the people who have the authority to make judgment calls.
That way, they could make informed decisions about the situation at hand.
The problem with this approach is that many situations a front-line employee faces are time-sensitive.
That means, by the time the situation has been communicated to the right person with the authority to make the call and then that decision has been communicated back to the employee, it is too late.
At the same time, the employee receives the message that the organization doesn’t trust him to make the right decision when the time arises and feels resentment.
What if you flip this concept on its head? Instead of trying to pull information upwards, you push authority downwards.
That’s what it means to give your people the power to make decisions, to own the situation, the problem, and its solution. Trust them to choose how to react when the unexpected happens and empower them to take matters into their own hands.
Instead of telling them how to do things, tell them what they need to accomplish and give them the freedom to choose their approach. When people have the freedom to take initiative, they become great problem solvers who develop creative solutions.
💡Give authority to your people and treat each rule violation individually.
Bob Chapman changed the trajectory of the HayssenSandiacre company by changing its culture. Though not big or fancy, the changes were very powerful at communicating one thing only to its people. That management trusts them.
Bells that informed when workers could take a break and when to return to their post went away. So did the time clocks that the workers had to punch. He even took down the cages that guarded the spare parts for the machinery from theft.
With continuous cues that the management trusted its workforce to do its job and be noble, they cured the company's culture. And with that cure, they also turned around its revenue, nearly doubling it over time.
The platform of Cascade has inherent benefits when it comes to communicating to employees that leadership indeed trusts them with, for example, the overall strategy of the organization.
Build on your values
Locate your cultural stars
Inside every organization, some people embody the values of the company in an exemplary way.
Discover your best people. Not the highest performing people, but those who have adopted and follow the company’s values in the most obvious and honest way.
They are your cultural stars. They are the ones that you want the rest of your people to emulate. Your cultural stars set the example for everyone on what behaviors are allowed inside the organization.
Your cultural stars are the advocates of your organization’s values.
Leadership needs to acknowledge those people and highlight their behaviors and actions to everyone. With this kind of exposure, the company creates models that other people can look up to and emulate in their behaviors.
How to instill your desired values
There are two ways to build a culture based on specific values. Both need to be present to achieve a cultural transformation.
The first is to reward the behaviors that you want people to adopt. Whenever someone demonstrates with her actions a specific value of the company, congratulate and reward her.
Offer incentives and communicate with more than words that performance is not the only thing that matters inside your organization. People who adopt the values of the organization will also get celebrated and compensated accordingly.
The second thing that leadership needs to do to cultivate the desired values is to condemn the behaviors that oppose those values.
This is crucial to a successful cultural transformation. Condemning bad behaviors swiftly maintains the necessary consistency. It indicates to every person that the company's values are taken seriously and opposing them is not tolerated.
💡Reward the behaviors you advocate and condemn the opposites fast.
Patagonia, an American clothing company, has publicly posted its values on its website. One of them is “Cause no unnecessary harm.” Their dedication to their values goes beyond the requirements of their corporate responsibilities.
For example, they uncovered significant violations, like human trafficking, in their second-tier supply chain level and worked towards improving the conditions in their suppliers.
If Patagonia goes so much out of their way to stay true to their core values outside of their company, you can bet they treat their people with the same integrity.
Every company has its values in a public and highly visible place in our platform, right at the start of its plan. The same goes for every team’s plan. Every user can view the values of its company or team at any time.
Growth cultures are transparent
Organizations that provide a safe environment where their people trust each other and adopt their organization’s values have one more common cultural trait: transparency.
They don’t hide their numbers, successes, or issues from their people with the excuse of them not being useful. Keeping people on a need-to-know basis isn’t a demonstration of trust.
Honesty is the basis of every successful long-term relationship, whether between people or between organizations and people. It is also the foundation of transparency.
In the absence of transparency, it is hard to build top-down trust and bottom-up accountability. That’s why it requires two-way communication practices.
If managers are not open about their mistakes with their teams or don’t provide proper or useful feedback, it’s hard to form trust. By withholding information because it’s “irrelevant” or “too sensitive,” managers indicate that they don’t trust their team.
On the other hand, when team members are not transparent about their goals, projects, and outcomes, they can’t be held accountable. Thus, without accountability, mistakes can’t be turned into lessons and teams can’t correct course.
💡Transparency and honesty must flow both ways.
Accountability vs Permission to fail
Many organizations are hesitant to be open and candid with their people, let alone with their customers. The same goes for a lot of employees, but for different reasons.
Employees fear transparency most when it comes to being perceived as incompetent when presenting their missteps or their biggest failures. In other words, they fear losing their job. That’s why it’s so important to have cultivated a culture where people are allowed to fail or come short on their goals.
There seem to be two conflicting ideas here. How can you hold people accountable when failure is so openly acceptable? The answer is with transparency.
Encourage your people to be open with their processes and the obstacles they meet along the way. Don’t micromanage, though, just keep the question about progress up.
Reinforce accountability and transparency regularly in meetings and people will demonstrate those values.
Reinforcement isn’t the same as reminders. For example, when people are open about the hardships they overcome, you should celebrate their wins and efficient problem-solving.
Hold your people accountable for their successes, as well as their failures.
💡Transparency solves the conflict between accountability and permission to fail.
When Allan Mulally became CEO of Ford in 2006, he found a culture overflowing with fear in a company inches away from bankruptcy. Nobody was admitting what was not going well for fear he might lose his job.
The only reason Mulally managed to save the company is that, when a senior manager presented the first red-flagged issue, instead of condemning him, he rewarded him for bringing it forth.
Over time he developed trust with his team and the senior management became more open about the issues that needed their attention and he managed to offer the necessary support.
One of the most celebrated benefits of the Cascade platform is the visibility of the current status of the goals. Easily and cleanly, one can view, update and report on the progress of his goals and/or team.
A quick summary
Organizations can’t have an iterative strategic process if a growth culture is not present. Below, we have collected our guidelines to cultivate inside your organization the fundamental traits of a growth culture:
- Create a safe environment by normalizing mistakes.
- Empower your people to breed trustworthy relationships
- Highlight your cultural stars and reject the behaviors you don’t tolerate quickly
- Balance accountability with permission to fail by developing transparency
In our next article, we’ll discuss how to make assessing and reporting on your strategy an organizational habit.
If you want to build a more transparent culture for your organization, book a demo with us.