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Culture Is How People Behave When No One Is Looking

Leadership actions matter more than words.

Key points

  • Company culture is defined by behaviors, not words.
  • An MIT Sloan study found no correlation between a company’s expressed values and how employees felt they lived up to them.
  • The behaviors that an organization rewards or punishes bring its values to life.
Unsplash/Nine Koepfer
Source: Unsplash/Nine Koepfer

Workplace culture is more than “the way we do things around here.” It’s the gap between what we say and what we do. It’s the behavior that is tolerated, not your words, that determines the real culture.

Your workplace culture is shaped by behaviors

“So what should I do to get ahead in your organization? What makes people successful here? What made you successful?”

Charles O’Reilly, co-director of the Stanford Graduate School of Business, posed that question and invited VMware’s employees to reflect on what the company rewarded.

Employees started filling the board with the usual suspects—innovate, work hard, be open, and be collaborative. But with prompting, more specific behaviors started to appear: “Be available on email 24x7,” “Sound smart,” and “Get consensus on your decisions.” Once the team had finished, professor O’Reilly pointed at the whiteboard and said, “That’s your culture. Your culture is the behaviors you reward and punish.”

The discussion about the behaviors that are rewarded and punished is much harder than it seems and leaders often struggle with this exercise. Listing values is easy; connecting them to actual behaviors is a different story.

Research indicates that stated values often don’t have a significant impact and can even have a negative effect. An MIT Sloan study found no correlation between a company’s expressed values and how employees felt they lived up to them. For example, promoting diversity but not supporting it with action can do more harm than good. Statements such as “We don’t discriminate” create an impression that the organization has achieved equity and fairness when, in fact, it hasn’t.

Behavioral cues, on the other hand, provide concrete guidance on how to translate values into actions. Leaders must clarify why they matter. According to the same study by MIT, less than one-quarter of companies connect values with behaviors, and a significant majority fail to link beliefs with business success.

You can’t call your culture “transparent” if people are afraid of speaking truth to power. You can’t say you have a “collaborative” workplace if you regularly promote selfish employees. You can’t pronounce your culture “innovative” if breakthrough ideas are often killed before they see the light of day.

It is also worth noting that it’s what employees think you punish and reward that matters. Emmett Shear, CEO of Twitch, tweeted: “Your culture is determined by what people perceive to be the behaviors you reward and punish. Note: Not what you actually reward and punish and also not what you say you reward and punish.”

Letting an underperforming employee go is difficult and painful. You invested a lot in hiring them and you want them to succeed. However, delaying the decision can send the wrong message. People could think that bad performance is okay.

Defining the behaviors you want to reward and punish is not about building consensus but about drawing a line. Choose what’s right, not what’s easy.

For example:

Amazon punishes “complacency” and having a “Day 2 mentality.” Mediocrity is not welcomed. The tech giant rewards speed, relentlessness, and intellectual autonomy. This is consistent with Amazon’s aggressive culture.

HubSpot punishes taking shortcuts to achieve short-term results. Conversely, it rewards simplicity, being a “culture-add” (someone who actively improves the company), work and life balance, and results delivered, not hours worked.

Slack punishes “brilliant jerks.” There’s no room for people who are disrespectful or not team players. Instead, Slack rewards empathy, a characteristic that’s crucial to getting a job at the tech company.

Culture is how people behave when no one is looking

Culture is not your company brand or the speech you give at an all-hands meeting. Your culture is actual day-to-day behavior. It’s the tough choices you make to stay true to your purpose and values, from dealing with mistakes or bad news to establishing why people get promoted or fired.

Purpose researcher Ozlem Brooke Erol told me: “Doing the right thing for the wrong reasons doesn’t work. People can tell the difference. A purpose is not a tagline—you can’t ask a marketing agency to develop it. You have to live your purpose.”

Erol shared the story of TRU Colors, whose purpose is to “Brew opportunity and end gang violence.” This brewing company from North Carolina is taking action for social change. Not only does it educate people through conversations, but it also provides job opportunities, mentoring, and educational programs.

TRU Colors was created by George Taylor after a 16-year-old boy was killed in a shooting near his office. Taylor built a business with a fully integrated social mission. The CEO is using beer as a conduit for social change. If beer brings people together, why not use it to create a community hub and social space?

Your true culture happens when no one is watching—it’s the result of what gets rewarded or punished.

Viisi is a Dutch mortgage advisory firm on a mission to change finance. Its purpose is to make the finance industry better, more sustainable, and more focused on the long-term. Tom van der Lubbe cofounded Viisi based on the idea that something was missing in his previous corporate job.

The financial industry is difficult, according to van der Lubbe—it doesn’t treat society well. He believes Viisi should advise people so that 25 years from now, their mortgage decisions will still make sense. The CEO decided to change the usual order, putting people first, clients second, and shareholders last.

This “people-first” standard works on the principle that if employees are motivated and happy, they will do their best for clients. And if clients are happy, the business will grow, thus delivering sustainable gains to stakeholders.

Viisi results show that being purpose-driven pays off. Not only the company has continued to grow, even during the pandemic, but its customers have given the company an average rating of 9.8 out of 10.

Model the right behavior and inspire others to follow suit. Walk the talk. Let your actions, not your words, define your culture. What you reward and punish requires drawing a line—how far are you willing to go to protect your culture?

The above is an excerpt from my upcoming book, Remote, Not Distant – How to Thrive in a Hybrid Workplace.